Wednesday, September 23, 2009

Banana Anyone?

"Because the end of inflation automatically triggers an immediate depression, there's always pressure on politicians to inflate too far. Since no one can identify the point of no return precisely, it's easy enough for those in power to convince themselves that the next dose of inflation won't be too much."

You Can Profit From a Monetary Crisis, Harry Browne 1974

Personally, I love bananas. Bananas in my cereal, just ripe bananas, grilled bananas, and of course, bananas and peanut butter. I've even stolen my children's Gerber bananas to dip a big spoonful of peanut butter in. But a banana republic I could do without. When our government agencies just do whatever the hell they want, that's what you got. I believe we've already discussed what the Fed and the Treasury have been up to, with no legal or Congressional backing for much of their money printing and acronym creating actions over the last year. And they're not alone.

The SEC is a sham. In her scathing Bloomberg article yesterday, Susan Antilla references the recent settlement with BAC for a whopping $33 million. "Such outcomes are possible only in the bizarre place known as SEC-land, where financial firms or employees get accused of breaking the rules but almost never have to admit it. Settlements get signed, skimpy nuisance fines get paid, and the accuser and the accused pat themselves on the back for a job well done. To round out the absurdity, some of those at the agency doing the accusing land jobs at firms they once attacked. This time, a judge has called the agency on the farce of bringing a case in which no names were named (let’s have some actual people pay these fines, shall we?) and shareholders, not management, were expected to pay fines for the alleged cover-up of $3.6 billion in bonuses to Merrill employees."

She goes on to reference a report from David Kotz, the Inspector General, that 'calls into question the agency’s ability to fulfill its basic functions,' which sounds to me like a pretty good reason to put it out of its misery."

How's about the FDA? Yesterday I received a forwarded email prefaced with "my friend's a doctor" (I'm loath to believe these as your friend may be a dentist, a podiatrist, a Ph.D.) stating there had been a Children's Tylenol recall. So I went to the website today, no mention of a recall anywhere. But when I called Johnson and Johnson, I was informed, oh yes, there's a recall, you just have to go to the website. Really? A product that millions of people take on a daily basis in this country and you can't list the recall or are not required to list on your main website? That is scary.

The Business Insider put out a list this weekend of our "most" corrupt Congressmen. Reps such as Vern Buchanan (R-FL), a two-term member of Congress representing Florida’s 13th district, "who pressured his employees to make contributions to his campaign committee. Rep. Buchanan owns several car dealerships in Florida and after he began his congressional campaign in 2005, in one seven-day period, he raised $110,000 from employees of his numerous car dealerships. Several employees have since alleged that Rep. Buchanan pressured them to make contributions to his campaign committee." See the rest of the list here:

These are our leaders, we elected them. And with the market heading to ear-popping levels, they hope that we'll forget the damage they've wrought.

1-1 last week. The Packers got pounded. Will post new picks on BOD today or tomorrow.

Got into SPY Dec. 115s this week, looking to add way OOM GS calls as well. Couldn't get filled on Monday and paid for it yesterday. Don't know if GS can be stopped.


BrandYou said...

We may have elected them, however I believe the more accurate description here is "criminals" rather than "leaders"...

HKraig said...

The problems that we face now will not be solved until the people demand a system that does not allow corporations to dictate how the government runs through the distribution of campaign contributions. We need publicly funded campaign finance reform and until that happens you will continue to get politics that serves the money and not the people. A pretty simple solution to a huge problem but until there is civil unrest our corrupt leaders will keep leading the sheep to the slaughterhouse.

AX said...

HK, thanks for the input. How bad do things need to get before there's civil unrest is the question. If we hit real inflation prior to next year's elections, we could see some change but the administration is hoping that the market will rise even if the economy doesn't prior to then.