Friday, March 27, 2015

Central Banks Buying Stocks

The Bank of Japan (BoJ) has decided that printing money and buying every bond issued by the Japanese government isn't enough. Now it needs to print money and buy Japanese stocks. I don't have link in front of me, but according to a story in the Wall Street Journal, the BoJ is going to buy $3T Yen worth of Nikkei 225 stock funds this year. Let's use the US as a comparison to see what effect this will have on the market.

$3T Yen is $30B. The Japanese economy is 1/4 our size, so that's the same as the Fed buying $120B worth of, say, S&P 500 stocks. The S&P 500 daily volume is on the order of $94B. $120B of investment in a year would be buying $1B of stock every 3 days. Taking account of weekends, if you bought S&P 500, you'd bump $94B to $95B every other market trading day. That doesn't sound like it would have much of an effect on the market. It might not be a good thing for a central bank to have billions of dollars in volatile assets in its portfolio, but that's another story.

Thursday, March 26, 2015

You Go To War With You Army You've Got

... and in our case, it's the Iranian Army in Iraq and ISIS allies in Yemen.

That's the whole problem with not having boots on the ground. You don't get a say in what happens on the ground unless it's blowing things up. You can't capture, hold and pacify territory with an F-16. Consequently, in Iraq, we're providing air support for whoever is willing to take on ISIS. That turns out to be Iran. If it turns out that we don't like the results once the whole thing is over and Iran has annexed all or most of Iraq, what do we do then?

Be all that you can be in the (Iranian) Army!
Update: I might have been too harsh. The structure of our alliances is actually quite sensible.

Wednesday, March 25, 2015

Getting Out Of Prison

... you're given back whatever you came in with and are given a trolley ticket so you get away from the front door of the jail. At least that's how it works here in San Diego. I've got friends in the prison ministry who talk about inmates who are about to get out and want to escape the ghetto life.

Escaping is really hard if you have no contacts other than your old friends and you've got no money to get away. I've met some of the recently released inmates while working at Catholic Charities where they've come in for food, but it wasn't until I heard the stories from my friends that I understood how hard it is for these poor souls to get on the right track.

Other friends have started a business called Rise Up Industries designed to help ex-cons and gang members go straight. Here's a little more about Rise Up.

Monday, March 23, 2015

All For One!

... and that one is our Maximum Leader!

Whatever's in her dishes are hers. Whatever's in the Catican Guards' dishes are hers, too.

Sunday, March 22, 2015

Tax Cuts Are Irrelevant

Arguing politics on Facebook is usually a very bad idea, but I have one old friend who is an avowed socialist (probably more of a Peronist fascist in reality) with whom I engage. He recently posted some twaddle by Krugman about tax cuts for the wealthy and blah blah blah. I responded with this.
Guys, tax cuts are nothing compared to interest rates when it comes to enriching the wealthy. The Fed is holding rates low, allowing the 1% to borrow $$ at trivial rates and invest in the market where they make plenty. Borrow at 1%, invest at 10%. It's free money for wealthy people. Tax cuts may bring them a few million, but the low rates bring them tens or hundreds of millions.

The Fed has to keep rates low because the government has so much debt that they can't service it if rates were at historic levels, say 5% or so for long-term debt. If the government had to pay 5% on our treasuries, it would blow multi-hundred-billion-dollar holes in the budget. We've spent ourselves into a corner and now have no choice but to follow economic policies that serve the ultra-rich.

Hilariously, it's the fascist economics of people like Reich and Krugman that got us here. No surprise there as this is where fascist economics always leads. The government grows and grows and the wealthy and powerful take advantage of it. Then the lapdogs of the ultra-rich like Reich and Krugman weave fairy tales about how the massive government that they support (at great personal profit) is going to protect you, the little guy, so you keep voting the right way.
It reminded me of The Rise and Fall of Bear Stearns about which I previously said this.
Throughout the book, Greenberg proudly talks about his trading strategies. It's all about avoiding losses so he can maximize profits. He rarely talks about his investments in real terms. That is, the investments are just financial transactions where he scrapes off his fee, they aren't vehicles for helping companies build homes, factories, or consumer goods. It's all just a pile of poker chips and he'll dump you as fast as he picked you up.
Alan Greenberg, the author of that hideous tome, never sweats things as trivial as tax cuts. Making gobs and gobs of money is all about interest rates, leveraging and rates of return.

While they mattered in the past when government wasn't the leviathan it is today, right now, tax cuts and tax increases are just a ruse to keep voters in line while the government and the ultra-rich loot our children. That's true from Japan to Germany to France to the US as we've all borrowed and spent our way into having to do what makes the Alan Greenbergs of the world rich beyond the dreams of avarice.

Saturday, March 21, 2015

Yellow Flowers And Camera Quality

Over at Tim's excellent blog, I mentioned that the camera on my Galaxy S5 phone has, in some ways, surpassed my Nikon D60 artillery piece. Yesterday, I was visiting my parents where my mom's typically outstanding garden had yielded these beauties.

I left this quite large, so I think it's worth a click. Enjoy!
While the S5's camera gives more pixels in its shots, there's no question that the focusing, zoom and white balance on the Nikon are vastly superior. I took about 20 photos of my mom's flowers and many of them suffered from incorrect focal length or were overexposed.

The solution, of course, is to buy a new Nikon.