Professor Elam

Tuesday April 2 2013

See http://www.themarketperspective.com

 I have been perusing the WSJ, well well well, I suspect that, like our gold miner bullish percent getting into higher gear, things we have mentioned for months and years are about to accelerate. 

Municipal Disasters on the Radar Screen

on the editorial page A 12, Bondholders Beware, the WSJ notes that Stockton CA is likely to favor workers over bond holders, Mert Whitney will be proved right, widen her definition of default to include all stakeholders, citizens, employees, bond holders, and the muni bond market itself

London Whales and other Frightening Sea Demons

In our previous post we noted potential weakness in the XLF, hmm, on page A 13 Shelia Blair notes 

Regulators Let  Big Banks Look Safer than They Are – the headline says just what the graph of XLF says, and as I mused, did anything really change, notable comment

Bet on it there will be future London Whale surprises, and the next one might not be so easy to harpoon

Chinese Capitalism on the March

In A Pacific island Prefers Chjinese Investment to US Welfare

Now a Chinese investor plans a 4000 room resort on the 39 square mile Micronisia Island of Yap, Japan wanted to establish what it termed the Greater East Asia Co Prosperity Sphere but failed losing WWW I, will the Chinese succeed without firinga  shot 

Leading from Behind

In Venus and Mars Revisited Kenneth Weinstein examines the US retreat from international leadership, from Poland missle defense to Afghanistan to Syria, now even the Europeans look bold by comparison, this parallels the US retreat leading to the fall of Viet Nam, a similar disaster during a similar 18  year period of stagnation. This led to the murderous rampage of the Khymer Rouge and the belief that the US would do nothing. 

Goldman Unit to Seek Risk

Goldman is launching a specialty finance company to invest in high risk debt primarily of midsize US companies with no credit rating. Hmm, have they retained Mike Miliken as an adviser? This reminds one of course of the rush to sub prime mortgages, leverage no less in this time frame five years ago. 

Periods of stagnation exhibit similar events, it is the job of the asocionomist to point them out, they are plain to see