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Listen, I’m willing to give just about anybody the benefit of the doubt. There are tonnes (sic) of confused posters on this site, as evidenced by the jumbled and disjointed list of demands, points of order and general temper tantrums archived on Monsieur Le Fly’s two “discussion posts” this weekend. Some of them offer contradictory recommendations, seeming to hate the government-banking cabal that’s all but run this country since the turn of the 20th century, but then recommending an even stronger government regime to take it’s place.
Folks, this is replacing the loan shark with the prison warden. I agree that we need to break the cycle of supported failure that crescendoed upon us in late 2008, but 2000 page bills from “friendly” members of Congress do nothing but cement that cycle. The first thing you need to do is force the banks to stand on their own. If that means forcing a complete separation from the Fed– which was the original intent — then so be it. If the Fed wants to “rescue” one of its lender institutions, let it do so without our tax dollar.
I am convinced, as you know, that we did nothing but “kick the can down the road” in 2008, and that TARP and all of these other remedies are doing nothing but setting us up for another voluminous group of failures. This is because we let the same cronies that supported the massively corrupt Fannie Mae and Freddie Mac write the “reform” bills that instituted a system where mega-banks, those egregious leviathans, can be bailed out, ad infinitum, by you and I, rather than allowed to fail or break up as normal businesses that fail must do.
There were many silly (and frankly, Marxist) definitions of capitalism promulgated on these board this weekend, but the worst were those that associated capitalism with this recent spate of bailouts. If capitalism is about anything, it’s about the creative destruction of old forms in order to allow innovation to drive progress forward.
This betrayal of true capitalism is why the recent bailouts of dinosaurs like AIG and GM and Chrysler were so pernicious. The breakup of GM would have freed billions of dollars in contract-bound assets and quite possibly sparked a whole new revolution in disaggregated auto manufacturing. Allowing AIG to dispense its well-deserved CDS losses to Goldman Sachs may have hurt Uncle Warren a bit in his pinchy pockets, but think of the logjam in the wealth managment business such action would have broken up.
Think about it — AB Bernstein is probably one of the most respected names in money managment. They are also the chief competitor in private banking to Goldman Sachs, in terms of research and institutional managment. Why should they be penalized because they did the right thing?
It’s the wrong thing that it worked out that way, and one need not be a hippy despoiling a small park to realize that.
My argument with (many of) the hippies is that asking for more government to “regulate” such nonsense is just asking for more trouble. Believe the fact that the large banks own Congress right now, and there single aim is to be dominant to the point where smaller banks are irrelevant annoyances. Believe also that this aligns with Congress’s aims as well. Why have to stretch your hand out to thousands of contributors when you can keep it to a neat and tidy ten or so?
Think about it. The only way to break the cycle is to take the power to “Stick-Save” out of Congress’s hands. Allow businesses to fail and you will create a stronger business arena from which to compete. That’s real capitalism, and that’s what’s best for everyone — to whatever percentage they might subscribe.
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I’m thinking the hippies may be buying gold here, however because I’m seeing some interesting formations in the weekly charts. Take a look at our friend the double gold bull ETF, DGP:
Note how our price maintained support at those two key support lines over the last three weeks? That’s a good sign. The amount of room left in the stochastics also tells me that this run is not over. What’s more, our stop loss line is pretty clearly demarcated here.
You can see the same action in a more exacting stand alone stock, the famous ANVil of ANV. As capricious as this stock is known to be, it also seems to be adhering to the same rule of law that DGP has been.
My best to you all in these harrowing times.
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