MSNBC distorts post-debate poll results to falsely depict Ron Paul as just barely winning | #youhavetobefckingkiddingme

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Hat tip to my buddy mike koss for sending me the link to vote.

A post-debate poll shown on MSNBC.com reveals Ron Paul to be the landslide winner of the internet survey, capturing 49.5% of the votes on the question, “Who do you think won the Republican debate at the Reagan library?” The next closest candidate, Mitt Romney, received just 17.5% of the votes, or almost exactly 1/3rd the number of votes received by Ron Paul. You might expect Mitt Romney’s graph bar, therefore, to be 1/3rd the size of Ron Paul’s right? Nope. These poll results, it turns out, have been radically distorted to diminish the apparent lead of Ron Paul in the poll. Look at the bar for Rick Perry(who assaulted Paul during the debate- scroll down for that) for fcking crying out loud. He got 14.6% of the votes and on the stupid graph makes him look like he got well over half as many votes as Paul and showed a close 3rd place. What a bunch of garbage.


Do these shenanigans really matter? Yes and No…..since most of America was catching up on their DVR and watching the two worst shows on TV last night Entourage and Jersey Shore instead of watching, I hardly expect that they even so much as cared to see how baseless, thoughtless and without substance all these other candidates were. Furthermore, it was quite obvious that the debate was focused solely on what Perry and Romney had to say as even more noticeably, Ron Paul was for the most part ignored last night, however when give a chance to talk, he absolutely provided clear and confident answers and the same consistent message. But the truth is, if mainstream media even gave this guy a decent chance of accurately being represented as credible he might just have a shot at not only securing the GOP nomination but easily routing the 2012 presidential election…but given the ridiculous lies, half truths and games they play, sadly we will most likely get another rich wall street prick or global elite as the great hope in replacing our lost cause for POTUS.

Oh and if you were wondering how Rick Perry felt about being absolutely crushed…scroll down.

http://firstread.msnbc.msn.com/_news/2011/09/07/7658608-who-do-you-think-won-the-republican-debate-at-the-reagan-library



During a commercial break at the NBC republican debate Rick Perry assaulted Ron Paul. Rumors at the debate centered around Ron Paul mentioning Perry’s previous support of “Hillary Care” and Pauls habit of calling out Perry’s democratic past…

If I know one thing, Ron Paul supporters will not let this go………..



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Bank of Lynching America Countrywide(BAC) below Buffett Rescue only 8 trading days ago; On way to $6.22 target I predicted

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Well, that didn’t take long. I mean this price action is almost making me look sage like, except I’m not. I’m just not stupid, that’s all….As I have used the term over and over, the half life of bailouts is getting shorter and shorter…It won’t be long until we are through the lows and hit my $6.22(down 30% from high print) target. For those that are so foolish to buy into these pathetic attempts to suck you in to believing all is well, please STOP. You are only going to lose money. And like today’s mysterious 150 basis point rally in the last 15 minutes on a day of virtually no volume, I would suggest you take advantage of the nice frothy positive open tomorrow morning that will be more than likely be engineered by the insanely desperate central bankers, who once again are caught on the short side trying to put downward pressure on Gold and silver and will need to ramp stocks to give them some cover ahead of the German Courts ruling on the constitutionality of the bailout programs put in place by Merkels coalition. While nothing is a certainty, it seems highly unlikely the US equity markets can maintain the 5-6% out performance they have enjoyed over German and European markets the past two days and teh 20% out peformance year to date. But I am told a few minutes ago that the sell side is telling accounts that since SPX held 1155 that we should be encouraged. SO if you want to take their advice read the following and be my guest.

In fact, here is some sage-like advice from another one of the leading parasites over at Citigroup, Mr. Tobias Levkovich, who earlier today SAYS MARKET INDICATES BUY STOCKS, SELL GOLD…For those of you who are unaware, Tobias is Citigroup’s Chief Equity Strategist and if anyone wanted a shining example of why Citi stock is $2.70 a share (adjusting for that ridiculous 10 for 1 reverse split), here you have it. Another bankrupt institution supported by taxpayers whose Chief Cheerleader makes far too much money for just saying buy stocks every day of his career.

From my 08/25 posting when the traitor swooped in from his bathtub:

Here is how things work. When a bank says they don’t need capital, it means they need capital. When they repeatedly go on record in the public saying, we don’t need capital, and take some you know they need a lot more. When they agree to take money from someone whose only worth is the credibility of his name which is now tainted like everything else related to the financial system, it means not only do they need $5bn but they will likely need a multiple more. This is the cheapest capital they will get because its a favor courtesy of everyone that could care less about you and I. BAC stock price zoomed up to $8.89 on this news. I can promise you whomever bought those shares will regret every dollar spent with 1 month as they will lock in at least a 25-30% loss in that time.

SO that’s my prediction. By September 25 BAC stock will be back to $6.22. Warren Buffett will have lost all credibility and Obama and his centrally planning team of thugs will be back in a corner trying to come up with every last piece of ammo to save this market and unfortunately they will have nothing.

Wall Street Enjoys Final Vacation as Global Banking Cartel enters End Game | the Bear leaves his cave

On a quick personal note. I was away on vacation for the past 11 days, decompressing and relaxing out in Malibu with a good friend who convinced me to bag a trip to Europe and just lay idle on the beach. I expected to be connected to the world, punching away on my iPad and cell phone, continuing my daily routine of talking to people, sifting through news and information and trading my PA. Instead I found myself almost instantaneously de-clawed from my natural weapon, instant access to knowledge and information. Instead of trying to fix the problem, I gave into it and just decided to go with it. I spent virtually every day staring and listening to the ocean(see pic below) while reviewing my young adult life and mapping out my future. I got my mind right and feel refreshed. The last 30 days have been the most defining of my life. Attempting to explain on paper would be pointless and saved for a personal conversation in person should anyone care. All that being said, I’m excited to be back in the real world; thinking, writing and planning for the next act. Because ladies in gentleman, we are entering end game. And everything we are used to and accustomed to will be changing dramatically very shortly.

Before I get started today, I would like to make something very clear. After spending my entire post graduate life working on Wall Street I have come to know some truly wonderful, smart and honest people. I have also come to know some deceitful, scummy and greedy motherfckers as well as some who are so blindfully warped from years of being served the kool-aid by their firms while just trying to do their job and get paid has left them in the most unlikely of positions; VICTIMS too. My colleagues that I have grown to know and love are not the problem, just like government workers who clock in and out every day are no more responsible for actions of the federal government. It’s the system that is corrupt, disgusting and rid with cancer that benefits the very few at the expense of ALL. We are entering end game. I’ve been watching this slow moving train since early 2007 and like the movie, Unstoppable about the runaway freight train that has left the yard, we have defaulted from a slow moving, perhaps fixable problem to one that is full throttle and speeding out of control. If you aren’t watching the European Crisis you should be. UBS just published a report titled“Euro Break-up- the Consequences”. I highly recommend you read this piece as its mere publication reflects the fact that the eventuality of this outcome is far more likely than anyone is considering. If you aren’t watching what is happening to our banking system you should be too. After trillions in fraudulent activity, trillions in bailouts, trillions in printed money, billions in political bribing and billions in bonuses, the criminal cartel members on Wall Street are beginning to get what they deserve. Between the massive litigation being unleashed against the banks, the exposing of the SEC(who is supposed to be protecting the little people from the corrupt) by Matt Taibbi of Rolling Stone on unlawful destruction of records detailing more than 9,000 information investigations, it is clear that there is no longer a practical solution that makes sense as every action needs to be upped by the N+100 power as the half life of said can kicking exercise dwindles to what is becoming only a reactionary and knee jerking reprieve.

FHA Files a $196 Billion Lawsuit Against 17 Banks

The Federal Housing Finance Agency (FHFA), as conservator for Fannie Mae and Freddie Mac (the Enterprises), today filed lawsuits against 17 financial institutions, certain of their officers and various unaffiliated lead underwriters. The suits allege violations of federal securities laws and common law in the sale of residential private-label mortgage-backed securities (PLS) to the Enterprises.

Complaints have been filed against the following lead defendants, in alphabetical order:

1. Ally Financial Inc. f/k/a GMAC, LLC – $6 billion
2. Bank of America Corporation – $6 billion
3. Barclays Bank PLC – $4.9 billion
4. Citigroup, Inc. – $3.5 billion
5. Countrywide Financial Corporation -$26.6 billion
6. Credit Suisse Holdings (USA), Inc. – $14.1 billion
7. Deutsche Bank AG – $14.2 billion
8. First Horizon National Corporation – $883 million
9. General Electric Company – $549 million
10. Goldman Sachs & Co. – $11.1 billion
11. HSBC North America Holdings, Inc. – $6.2 billion
12. JPMorgan Chase & Co. – $33 billion
13. Merrill Lynch & Co. / First Franklin Financial Corp. – $24.8 billion
14. Morgan Stanley – $10.6 billion
15. Nomura Holding America Inc. – $2 billion
16. The Royal Bank of Scotland Group PLC – $30.4 billion
17. Société Générale – $1.3 billion

These complaints were filed in federal or state court in New York or the federal court in Connecticut. The complaints seek damages and civil penalties under the Securities Act of 1933, similar in content to the complaint FHFA filed against UBS Americas, Inc. on July 27, 2011. In addition, each complaint seeks compensatory damages for negligent misrepresentation. Certain complaints also allege state securities law violations or common law fraud. [read full FHFA release
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Buffett Fundraiser for Obama | #doyoupeopleseetheshamthatisgoingonhere?

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a hat tip and a fck you to mike krieger for pointing this out yet pissing me off even more today.

when everything is falling apart around us, at least we can turn to our teleprompter president to brighten our day by giving us a good laugh…and by good laugh, I mean taking your chair and throwing it across the room as you realize no matter how hard you try, no matter what you do, unless you are one of them, the system is failing you and turning on you every day. your president cares about one thing, which is being reelected by his fat cat banker buddies and when you hear him try to energize his voting base by blasting “those fat cat bankers” it means two things; 1) that he thinks you are stupid and you will never figure out his agenda and who he is loyal to and 2) like virtually everything in his presidency he has stood for, every promise he ran on and ever made, every speech he has ever given to try and rally the population by pretending to feel what they feel; it means absolutely NOTHING. as soon as this country begins to realize that, is when real change can begins….

Aug. 25 (Bloomberg) — Billionaire Warren Buffett plans to hold a Sept. 30 fundraiser in New York City to benefit President Barack Obama’s re-election bid, according to two Democratic officials not authorized to speak publicly about the event.

NYC how fitting.  Ground Zero for all the “fat cats” that fund his Presidency.  What a sham.

Guest Post | Michael Krieger: A Wolf in Sheep’s Clothing

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This is the first (of many)posts from a good friend of mine, Michael Krieger, who has agreed to allow me to share with you all his thoughts and writings on the markets and actions around us. Keep on the look out as I can assure you, these are posts you will want to make sure you read. 

From MK:

This really bothers me. You have to love that Warren Buffett, the richest man in the world, has deemed himself representative and ambassador for those making $250,000 and more…”People like myself” he says. People that take home $250,000 a year before taxes are somehow in the same category as the richest man in the world? I would say there is a fairly large gap between a $250,000 annual income and a $45 billion empire. And how did the powers that be arrive at this arbitrary yet significant figure of $250,000 as the line for dividing rich and poor?  Warren, why not donate your money to the government that you feel so strongly should be funded with more money from the “rich” that you have appointed yourself representative of?  I am beyond disgusted by these righteous “do as I say, not as I do folks that have already made a fortune and yet are lobbying for higher taxes as though they are elected representatives for the government’s definition of “rich”, meanwhile by and large their wealth has already been made and tax policy is immaterial to their incremental future wealth. If he feels so strongly about what people like him should be paying, WHAT’S STOPPING HIM? Pay more then, Warren, if it means so much to you. Nobody is stopping you and the government will gladly accept a larger check from you on April 15th. Meanwhile stop meddling in the business of people that are eons and light years away from you in wealth and are still working daily to achieve their own financial success and stability. And I’m not against paying more in taxes…I’m just against higher taxes as long as it’s being funneled to the reckless careless idiots in Washington DC currently in charge of spending it…but that’s subject for another conversation altogether. – Written by a friend of mine last November

A Wolf in Sheep’s Clothing

Anyone that has read these pieces for a while knows where I stand on Warren Buffett.  Namely I can’t stand him.  It has nothing to do with the fact that he has so much money.  I am not an envious person and moreover I think having wealth anywhere near his is more of a curse than a blessing.  The reason I can’t stand him is because he is a fraud.  While he may have been a great investor at one point, he is more of a great actor than anything else.  Here is one of the richest people in the world.  He sits there in Nebraska, chuckling, drinking his cherry coke and eating hamburgers in this pathetically obvious attempt to convince the masses he is “just like us.”  The term wolf in sheep’s clothing was invented for guys like this.  Like most people out there I don’t like bad guys.  The trick; however, is that the most dangerous bad guys don’t come out and tell you they are bad guys and how they are going to fleece you.  What they do is pretend they are the good guys.  Pretend that they are on the side of the little guy or working for the “collective good,” which is a preposterous statement because there is no such thing.  Human desires and notions of what is a good life are as varied as the stars in the sky.  Once we start allowing officials or rich people to define “collective good” you can be sure we are finished.

I am currently rereading Henry David Thoreau’s Walden.  Thoreau has been described as “an American author, poet, abolitionist, naturalist, tax resister, development critic, surveyor, historian, philosopher, and leading transcendentalist.”  In other words, in my mind a true American hero.  I was struck by this line as I was reading it the other day:

If I knew for a certainty that a man was coming to my house with the conscious design of doing me good, I should run for my life, as from that dry and parching wind of African deserts called the simoom, which fills the mouth and nose and ears and eyes with dust till you are suffocated, for fear that I should get some of his good done to me – some of its virus mingled with my blood.  No – in this case I would rather suffer evil the natural way.  A man is not a good man to me because he will feed me if I should be starving, or warm me if I should be freezing, or pull me out of a ditch if I should ever fall into one.  I can find you a Newfoundland dog that will do as much.  –Henry David Thoreau

Thank you sir.

So back to Buffett.  The truth of the matter is, as I and other have exposed these last several years, is that he essentially runs a financial services company.  When the system itself was threatened the status quo was threatened.  Buffett stepped in and became a government agent once he saw the writing on the wall.  He did not step up for America.  He did not step up for the people.  He stepped up for himself and his legacy.  He stepped up to save the status quo because he is the status quo.  All of this raises a very serious issue in America right now and one that needs to be dealt with in the next crisis (which has arrived) or we will never be able to recover into the world’s most vibrant and dynamic economy again.  A lot of people lament the lack of upward mobility in the U.S. right now and I share those sentiments.  However, equally important is downward mobility.  What makes the concept of America unique is not merely the concept that the poor can become rich but that the rich can become poor.  It is this second part that is the most dangerous to social cohesion when it disappears.  Unfortunately, the system that we have today of an unholy alliance between Wall Street, Washington D.C. and the multi-national corporations (including the military industrial complex of course) stands there holding onto all the levers of power to serve as gatekeepers of their own empires.

I read a great article on a related topic recently.  It was called “Central Planning and The Fall of the US Empire.”  http://globalguerrillas.typepad.com/globalguerrillas/2011/07/journal-central-planning-and-the-fall-of-the-us-empire.html  One of the most significant conclusions in my opinion was the following:

The answer is that an extreme concentration of wealth at the center of our market economy has led to a form of central planning.   The concentration of wealth is now in so few hands and is so extreme in degree, that the combined liquid financial power of all of those not in this small group is inconsequential to determining the direction of the economy.   As a result, we now have the equivalent of centralized planning in global marketplaces.  A few thousand extremely wealthy people making decisions on the allocation of our collective wealth.  The result was inevitable:  gross misallocation across all facets of the private economy. 

To see what this extreme wealth concentration looks like as a distribution, we don’t have to look further than income distribution in the US (classic power law).   The liquid wealth of those on the extreme left of the curve completely outweighs the 99.5% of the population to the right (the distribution is FAR more skewed than most people even imagine — Republican or Democrat).  This graph would also be a good way to demonstrate how decision making in a bureaucratic dictatorship in a country like the Soviet Union looked like before it collapsed.
Once again this brings us back to good old Uncle Warren.  Have you noticed that Obama can’t make a speech these days without saying “Warren Buffett say this…or Warren Buffett says that.”  I mean give me a freaking break.  It seems that Buffett has been named head of the U.S. economy and basically Obama just picks up the phone and whatever uncle Warren says goes, despite the fact that the guy has a huge stake in one thing and one thing only.  Preserving the status quo and preserving his legacy.

The Wolf Invests in Bank of America

The interesting thing about today is that I had intended to write this piece on Warren Buffett all week.  It was just really fortuitous timing that this Bank of America news came out today.  Gosh where to start.  First of all, this $5 billion preferred investment by Uncle Warren in preferred stock is extremely bearish for the market, the economy and the financial system.  This is not an investment, it is political-economic strategy.  It tell us so many things that we probably already suspected.  It tells us that Bank of America did indeed need capital.  Even worse, they probably need so much that they went to Uncle Warren for five big ones so that people would just look the other way and gain “confidence.”  This is how out to lunch these guys are.  They don’t understand that the root of the lack of confidence is that the people see a country devolving into a Banana Republic led by greedy oligarchs and politicians stealing everything in sight as the ship sinks.  So then they roll out the number one crony capitalist in America, tell us he is investing in Bank of America and expect that to lead to confidence!!  What a bunch of maniacs run this nation.  This is 1789 France folks as I have said many times before.

Second, the fact that TPTB are resorting to Uncle Warren for everything now may mean the Fed is out of the game.  No one has confidence in the Fed to come save the day so they need the next thing.  That next thing is Uncle Warren.  Unfortunately it’s not working and it is not going to work.  You can see it in the market today.  People are waking up.  They are starting to see through the matrix.  Buffett is a fraud and a shill.  If you follow him it will be right over a cliff.

The Baby Boomer generation is getting old and their ideas about how political systems and economies operate are getting even older.  My generation is coming into its own and we will determine our own destinies. You can step aside gracefully or you can be pushed aside.  Either way your days of running the lives of this planet are numbered.  The Fourth Turning is here.

Peace and wisdom,

Mike

Guest Post | Ranting Andy: Warren Buffett Again, Traitor to America

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Back with some harsh words that I couldn’t agree with more!

Wow, there truly are no limits to how low this monster will stoop.

Who could’ve foreseen Warren Buffett, once known as much for his good nature as his investment prowess (aided, of course, by investing during the greatest bull market in U.S. history), would turn out to be among the most evil people in America?

Some might say the government has a gun to his head, in the same way they likely did when his former AIG dealings allegedly cost him his physical silver, but I think not.  I believe this man simply realized the easiest way to FREE MONEY is to be a paid cheerleader and (covertly backed) “investor of last resort” for the U.S. government.

I have written about this topic extensively, particularly in my April 4th RANT, “Warren Buffett is S—M, and I Cannot Let This Opportunity Pass Me By”, and will not let up one iota after this latest, contrived revelation that he miraculously invested in $5 billion in Bank of America (once again, in an embarrassingly sweetheart deal), just as it was about to go bankrupt.

http://babybulltwits.wordpress.com/2011/04/04/ranting-andy-warren-buffett-is-s-m-and-i-cannot-let-this-opoportunity-pass-me-by/

Here’s the man who, in 2003, termed derivatives “Weapons of Mass Financial Destruction”…

http://news.bbc.co.uk/2/hi/2817995.stm

…and in 2007 reiterated this stance…

http://seekingalpha.com/article/34606-buffett-on-derivatives-a-fool-s-game

…amazingly stepping in during the height of the 2008 financial crisis to buy big stakes in both Goldman Sachs AND General Electric, perhaps the two most derivatives-leveraged firms in the world at the time, at least on a pound for pound basis…

http://articles.latimes.com/2008/sep/24/business/fi-goldman24

http://articles.latimes.com/2008/oct/02/business/fi-ge2

…which were followed in both cases by IMMEDIATE secondary offerings (likely heavily subscribed to by government offshore accounts, by the way)…

http://www2.goldmansachs.com/our-firm/press/press-releases/archived/2008/public-offering-announcement.html

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ad8yiWhz2ryc&refer=home

…and, by the way, notice that he even admits to investing in Goldman Sachs with essentially ZERO due diligence (of course, I’d deem a covert, explicit government guarantee as due diligence any day)…

http://capitalobserver.blogspot.com/2008/09/buffett-breakfast.html

…and now, of course, his miraculous decision to invest that same magic number, $5 billion, in the dying Bank of America, once again in just a day’s time as he just admitted that he contacted B of A for the first time YESTERDAY, and closed the deal within the same day!

http://dealbook.nytimes.com/2011/08/25/buffett-to-invest-5-billion-in-bank-of-america/

During his one-day due diligence of Bank of America, I wonder if he read this analysis about its balance sheet…

http://finance.yahoo.com/blogs/daily-ticker/henry-blodget-vs-bank-america-rotted-core-164854408.html

…nah, no need, when the U.S. GOVERNMENT is your backer!

And no, this article is not sour grapes on my part, as I covered my BAC short yesterday (after holding it for a whopping two days) at breakeven.  In fact, I only brought that trade up, a measly 600 shares, to represent the fact that it was my first non-Precious Metals investment since May 2000, more than eleven years ago.  The two reasons I have avoided the broad stock and bond markets have been 1) the superior returns offered by Precious Metals and 2) the explosive acceleration of market manipulation in ALL financial markets over this period.

Given where the world is today, and where it is heading, I don’t believe the TBTF banks will survive through the upcoming MELTDOWN II, and as Bank of America is clearly the weakest link right now, has virtually no chance of building stockholders’ equity any time soon, if ever.  I believe BAC will be bankrupt in short order, however the “Buffett investment” might buy it a few more months, until the system is so wrecked that the market is forced to realize this “investment” is a government-sponsored sham, not to mention FAR SHORT of the required funds to save this Titanic ship.

But as you can see, taking either long OR short positions in the broad U.S. stock or bond markets can be dangerous to your health due to all the overt AND covert manipulative forces out there, starting with the HFT algorithms all the way up to the Buffett investment scams.

That is why Precious Metals is the ONLY way to protect your wealth over the long-term, first in foremost in the metals themselves and secondarily with carefully vetted out investments in quality gold and silver mining companies!

Fasten your seat belts, if you thought that AUGUST was crazy, just wait until the “Summer Doldrums” end after Labor Day!

PROTECT YOURSELF, and do it NOW!

Andrew C. Hoffman, CFA
Managing Director
San Diego Torrey Hills Capital
B (720) 350-4130
C (917) 324-7602
ahoffman@torreyhillscapital.comwww.babybulls.com

Buffet and Obama Eat Ice Cream Cones Together, Oracle Agrees to invest in Bank of America for lifetime supply of Cherry coke and a Medal of Honor

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Warren Buffett rides in to town and invests $5bn into a black hole. This is not positive news I assure you, this is an act of utter desperation from your CENTRALLY PLANNED government. Between the all out raiding of GOLD & SILVER the past few days to the mysterious run up in stocks pre Jackson Hole speech by Helicopter Ben which will only disappoint, we are entering the late innings which is surely going to be nothing less than an utter blood bath and spectacle post labor day.

Here is how things work. When a bank says they don’t need capital, it means they need capital. When they repeatedly go on record in the public saying, we don’t need capital, and take some you know they need a lot more. When they agree to take money from someone whose only worth is the credibility of his name which is now tainted like everything else related to the financial system, it means not only do they need $5bn but they will likely need a multiple more. This is the cheapest capital they will get because its a favor courtesy of everyone that could care less about you and I. BAC stock price zoomed up to $8.89 on this news. I can promise you whomever bought those shares will regret every dollar spent with 1 month as they will lock in at least a 25-30% loss in that time.

SO that’s my prediction. By September 25 BAC stock will be back to $6.22. Warren Buffett will have lost all credibility and Obama and his centrally planning team of thugs will be back in a corner trying to come up with every last piece of ammo to save this market and unfortunately they will have nothing.

What happened this morning is a pure disgrace to the free markets and I promise will turn in to nothing short of utter chaos. Its disgusting, perverse and it shows the desperation involved in propping up too big too fail banks. Warren Buffett is private money with implicit federal backstop. Remember that at the end of the day. This is nothing short of a smoke and mirrors like maneuver and if you have money in the market, use todays move to reduce your risk.

We are embarking on end game. Get your seatbelts on.

Buffett Rides to BofA’s Rescue With $5 Billion


Bank of America Corporation (NYSE: BAC) has just scored its saving grace.  Berkshire Hathaway Inc. (NYSE: BRK-A) is investing $5 billion in 6% preferred shares and warrants.  What makes this different from other bank investments is that Buffett actually approached Brian Moynihan for this one.

BofA is selling 50,000 shares of Cumulative Perpetual Preferred Stock at $100,000 per share to Berkshire Hathaway in a private offering with a 6% dividend payable quarterly.  These shares are also redeemable by the company at any time at a 5% premium.

Berkshire Hathaway will also receive warrants to purchase 700,000,000 shares of Bank of America common stock at an exercise price of $7.142857 per share.   Mr. Buffett is already profitable on these this morning now.  The warrants can be exercised in whole or in part at any time during the 10-year period following the closing date of the transaction.

Brian Moynihan was quoted, “We are building the best franchise in financial services and we have laid out a clear plan to deliver long-term shareholder value. I remain confident that we have the capital and liquidity we need to run our business. At the same time, I also recognize that a large investment by Warren Buffett is a strong endorsement in our vision and our strategy.”

Here is where Buffett takes the claim… “Bank of America is a strong, well-led company, and I called Brian to tell him I wanted to invest in it.  I am impressed with the profit-generating abilities of this franchise, and that they are acting aggressively to put their challenges behind them. Bank of America is focused on their customers and on serving them well. That’s what customers want, and that’s the company’s strategy.”

If you recall, Buffett also invested in General Electric Co. (NYSE: GE) and in Goldman Sachs Group Inc. (NYSE: GS) during times of need.  The difference is that Buffett got 10% preferred shares then.  This is a 6% preferred share.

The big question is simple… Does this mean that Buffett is changing his tune on increasing his Wells Fargo & Co. (NYSE: WFC) super-investment?  That is one of his largest holdings.

BofA shares are soaring on the news.  Right before the open we have shares up 21% at $8.47 after a $6.99 close.  The 52-week range is $6.01 to $15.51.

Buffett may have just put a $1 billion paper gain on the balance sheet of Berkshire Hathaway.

JON C. OG

Don’t Quote Me on That | v.2.11

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I’ve decided to add a weekly quote drop to the blog that I’ll post every Wednesday morning(yes I know today is thurs)…It will be tagged under “QUOTE” if you want to ever go back to the archives and find stuff. The idea here is simple, historical or current quotes will be have some sort of relevance or significance to what I am trying to get across…I can’t possibly try to explain each one individually but hopefully if you are reading me consistently enough the tie-in of the quotes to the direction of this blog will all make perfect sense…ENJOY!!!

Our lives begin to end the day we become silent about things that matter”

-MLK

 

“Those few who can understand the system (check book money and credit) will either be so interested in its profits, or so dependent on it favors, that there will be little opposition from that class, while on the other hand, the great body of people mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear it burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests.”

-Rothschild’s Bros. of London

Majority of Congress with no education in business | #ifeelsomuchbetternow

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So this is who is in charge of fixing our economy? I mean I knew we had a bunch of monkeys and puppets in Washington BUT are you telling me that a country facing its worst financial crisis since the great depression is relying on a bunch of idealistic political science experts to make the right decision to get us back on track. FCCCKKKKKKKKKKKKKKKKKKK. So really what we have here is a two pronged problem. Current Economic status quo in Washington is based on Keynesian based economics…for those who don’t it’s the most common economic theory applied by most western governments because its foundation is formed by the belief that creating aggregate demand even if artificial, creates economic activity. SO basically, give a politician a blank check and let them go to work has been our policy for just about ever. As you can see this is a politician’s wet dream. Tell your constituents you’ll do this, this, this and voila!! THEY WILL LOVE YOU and VOTE for you. Be forced to restrain spending and VOILA!!! They will hate and replace you….anyone see the flaw here given our precarious times? From wiki:

According to Keynesian theory, some microeconomic-level actions — if taken collectively by a large proportion of individuals and firms — can lead to inefficient aggregate macroeconomic outcomes, wherein the economy operates below its potential output and growth rate. Such a situation had previously been referred to by classical economists as a general glut. There was disagreement among classical economists (some of whom believed in Say’s Law—that “supply creates its own demand“), on whether a general glut was possible. Keynes contended that a general glut would occur when aggregate demand for goods was insufficient, leading to an economic downturn resulting in losses of potential output due to unnecessarily high unemployment, which results from the defensive (or reactive) decisions of the producers. In such a situation, government policies could be used to increase aggregate demand, thus increasing economic activity and reducing unemployment and deflation. Most Keynesians advocate an activist stabilization policy to reduce the amplitude of the business cycle, which they rank among the most serious of economic problems. For example, when the unemployment rate is very high, a government can use a dose of expansionary monetary policy.

On the direct opposite side of the equation is the Austrian School of Economics which I have been following for the past 8 years or so and is the foundation from which I form my collective opinion on economics and which should be no shock to the readers of this blog, is the economic principle followed by Ron Paul and why I support him. Our government is incapable of spending and incapable of making hard choices. The idea behind the Austrian is take those choices away from the government and let the private sector and allow people decide what they want and what is best for society. Austrians argue against centrally planned societies which is what our country and Europe has become.

Austrian economist Friedrich Hayek criticized Keynesian economic policies for what he called their fundamentally collectivist approach, arguing that such theories encourage centralized planning, which leads to malinvestment of capital, which is the cause of business cycles.[24] Hayek also argued that Keynes’ study of the aggregate relations in an economy is fallacious, as recessions are caused by micro-economic factors. Hayek claimed that what starts as temporary governmental fixes usually become permanent and expanding government programs, which stifle the private sector and civil society.

Austrian economists reject empirical statistical methods, natural experiments and constructed experiments as tools applicable to economics, saying that while it is appropriate in the natural sciences where factors can be isolated in laboratory conditions, the actions of human beings are too complex for this “numerical” treatment as passive non-adaptive subjects. Instead one should isolate the logical processes of human action. Mises called this discipline “praxeology” – a term he adapted from Alfred Espinas (but which had been in use by others

Other Austrian school economists have also attacked Keynesian economics. Henry Hazlitt criticized, paragraph by paragraph, Keynes’ General Theory in The Failure of the New Economics.[25]
Murray Rothbard accuses Keynesianism of having “its roots deep in medieval and mercantilist thought.”

Having no business background, no understanding on economic theories and principles it makes sense as to what the de facto school of thought all the sharks in the capitol hill fish tank would swarm to. Having a blank checks for years to make promises and rain gifts on everyone regardless of societal benefit, the ability to grab more and more power and the hubris to believe that one knows what is best for all makes it easy to pray on the weak and powerless. When you are a politician, as long as you spend and hop of board the spend and extend train makes it easy to be well liked and re-elected…but folks that era is coming to an end as this country is broke. Shaping a government that is formed by the right leaders is going to be hard and most likely impossible….but there are leaders out there who can get the job done…and I believe in one. And I think you all know by now who that is.

From The Hill:

Report: Majority of Congress with no education in business

Almost 80 percent of lawmakers have no academic background in business or economics, even as Congress grapples with deficits, unemployment and other economic issues of tremendous complexity, according to an independent analysis released Tuesday.

The Employment Policies Institute (EPI) found that only 8.4 percent of lawmakers majored in economics or a related field, while just 13.7 percent studied topics related to business or accounting.

“This research suggests that our elected Representatives may want to dust off their Econ 101 textbook (if they have one) before trying to tackle weighty questions about the impact of taxes, spending, and debt on our economy and the labor market,” EPI’s release warns.

Most Capitol Hill lawmakers (55.7 percent) focused their studies on government, law or the humanities, EPI found, while 11.5 percent majored in science- or technology-related fields.

The report arrives as Congress continues to joust over deficit reduction, spending cuts, tax reform, and the role of the federal government in pulling the country out of a prolonged jobs crisis.

Republicans argue that the size of government – combined with enormous levels of federal spending – have contributed both to the recent recession and the slow pace in pulling out of it. They want to cut taxes, slash spending and scale back regulations they say are strangling private sector job creators.

Democrats, on the other hand, see the government playing an active role in bolstering the economy. They’re pushing proposals designed to create jobs by increasing infrastructure spending, lending a lifeline to states and hiking taxes on corporations that outsource jobs.

Michael Saltsman, a researcher at EPI, was quick to concede that the lack a formal background in economics or business does not automatically preclude lawmakers from making informed choices about economic policy.

“There are plenty of people who have done it well,” Saltsman said.

But given the intricacy of the economic issues lawmakers are tackling this year, a formal introduction to those topics “would certainly help them to evaluate these things better,” Saltsman added.

In crunching its figures, EPI excluded nonvoting members, such as those representing Guam and the District of Columbia. The group also did not take into account those lawmakers without business or economic degrees who nonetheless launched business careers.

Central Planning and The Fall of the US Empire.

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Thanks to MK for sending this my way….

Fascinating article below…. A point MK made in his email to me is that a key to this distribution of wealth is the fact much of this concentrated wealth occurred in the financial services area, a lot of which was achieved via dubious method and financial alchemy at the expense of everyone else and then secured by taxpayer bailouts when their ponzi scheme blew up.  Nothing short of a banana republic.

Central Planning and The Fall of the US Empire.

By: John Robb

One of the most interesting underlying reasons for the decline of the Soviet Union, and soon the US, is
misallocation of resources due to a reliance on central planning.

Misallocation in this context means that year after year, decade after decade, the wealth of a nation is spent on the wrong things.  The wrong projects are funded.  The wrong infrastructure is built (or not built — the US is 38th in the world in Internet connectivity and falling).  The wrong things were bought and so on.  Eventually, the accumulation of bad investment made the USSR so fragile that even the smallest shock could topple them.

The reason for this failure was that the Soviets relied on central planning.  A system of economic governance where small group of people — in the Soviet Unions case bureaucrats — had all the decision making power.  They decided what was spent and where.  Even with copious amount of information, they decided badly.

Why did they decide badly?  The massive economy of a modern superstate is too complex for a small group of people to manage. Too much data. Too many uncertainties. Too many moving parts.

The only way to manage an economy as complex as this is to allow massively parallel decision making.  A huge number of economically empowered people making small decisions, that in aggregate, are able to process more data, get better data (by being closer to the problem), and apply more brainpower to weighing alternatives than any centralized decision making group.

Of course, the misallocation due to centralized decision making wasn’t supposed to be a vulnerability of the West.  To allocate resources in our economy, we had a conceptually more efficient mechanism: markets.  Markets are supposed to be a mechanism that allows massively parallel decision making.

Those assumptions are proving false. The succession of market bubbles, the global financial collpse of 2008, and the recent US debt problem is prima facie evidence that gross misallocation has occurred for decades.  The wealth of the West, particularly the US, is being spent on the wrong things year after year, decade after decade.   We are now as fragile as the Soviet Union in the late 80’s.

What happened?

Central planning took over the decision making process in the US, both through the growth of government and through an unparalleled concentration of wealth.

The parallels between the rapid growth of US government bureaucracy and the Soviet bureaucracy is straight forward.  As more and more of US economy was controlled by a narrow group of decision makers allocating government resources, the more sluggish the entire economy became (most of this was due to massive growth and mis-allocation in entitlements and defense).

Further, the ability of government bureaucracies to extend their decision making to remaining majority of the economy through regulatory action, is also a form of centralization.  However, even with all of this government growth, it’s is still not enough to account for the level of misallocation we are seeing.

There’s is something else at work.

The answer is that an extreme concentration of wealth at the center of our market economy has led to a form of central planning.   The concentration of wealth is now in so few hands and is so extreme in degree, that the combined liquid financial power of all of those not in this small group is inconsequential to determining the direction of the economy.   As a result, we now have the equivalent of centralized planning in global marketplaces.  A few thousand extremely wealthy people making decisions on the allocation of our collective wealth.  The result was inevitable:  gross misallocation across all facets of the private economy.

To see what this extreme wealth concentration looks like as a distribution, we don’t have to look further than income distribution in the US (classic power law).   The liquid wealth of those on the extreme left of the curve completely outweighs the 99.5% of the population to the right (the distribution is FAR more skewed than most people even imagine — Republican or Democrat).  This graph would also be a good way to demonstrate how decision making in a bureaucratic dictatorship in a country like the Soviet Union looked like before it collapsed.


The result of central planning in the US has finally hit the wall.  The list of problems is endless. The misallocations range from the dangerous $600 trillion derivatives market to the destruction of the US middle class (by exporting jobs and the substitution of income with debt).

The end result is that our economic and political system has become very fragile.  All it will take is is one extremely bad decision and the cascade of failure that follows will catch everyone off guard.