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Thread: weekend commentary - the Mighty Mogambo on Globalization

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    Default weekend commentary - the Mighty Mogambo on Globalization

    (snip)and how Bernanke is astonishingly reported to have said, of all the things he could possibly have said, "The challenge for policymakers is to ensure that the benefits of global economic integration are sufficiently widely shared." What? I can't believe my ears! What kind of commie/socialist crap is that from a banker? My hands are visibly shaking at the horror!

    The phrase "ensure that the benefits are shared" means, of course, "Have the government take money and power from somebody, and give it to me and my friends."

    And who are these "friends?" He quickly supplies an answer by saying, "For example, by helping displaced workers get the necessary training to take advantage of new opportunities." Hahahaha! Is this man personally aware of any real success in "training displaced workers" (who are fired only because they cost too much per hour) to take advantage of "new opportunities?" I'm not! Hahahaha!

    And the reason is that there are no "new opportunities" to enable the overpaid American worker to make more money per hour than some cheap foreign labor, dude! If there were, then foreign labor would be doing it already! Hahaha!

    So, believe me when I say that if there really were "new opportunities" against which foreigners could not compete, then wages would be rising in that industry, and money would be moving there, and there would be lots of shadowy people all over the damned place, furtively trying to get a little of that early action, legal or not. "(snip)

    ... and the Mogambo got rolling on the topic of inflation as well ...

    (snip)"But while we stand, united as a nation, aghast at the thought of inflation in the price of yummy tacos [referring to new demand for ethanol causing huge price increases for corn - sic], let's take a look at some other inflation, such as from John Hussman, of the Hussman Funds, who calculates, "Over the past year, consumer price inflation has clocked in at 4.15%. Producer price inflation (finished goods) has been a similar 4.12%. But if you look at intermediate goods, we're currently at an inflation rate of 8.83%. That's the most abrupt widening in the spread between intermediate and finished goods since the 1973-74 oil crisis."

    By this time, I am, of course, fixated on getting some tacos, and I am impatiently tapping my toe in my exasperation, as if to say, "Hey! John! I'm a busy guy here, so get to the punch line so we can get to the lunch line, OK? Will inflation go up, or down? Up or down? Up? Down?" But before I could even ask, he tells us. "Moreover," he says, "if we look at points in history when prices for intermediate goods have outpaced prices for finished goods over a six-month period, we've also seen, on average, an acceleration in the PPI finished goods inflation rate over the following six months."

    Here is where The Mogambo would have lost it, and started screaming in fear and panic about how "inflation is going to kill us and we're all freaking doomed!" Blah blah blah. But notice how classically understated and calmly he sums it up by saying, "So, if there is credible evidence to be found of weakening inflation pressures, it wasn't to be found in last week's CPI or PPI reports."

    But they will be, soon enough, and the lesson seems to be: "Buy corn."(snip)

    ... but perhaps of the most immediate interest ...

    (snip)"Now, if a depression in the second quarter of 2008 is too, too far away for you hotshot short-term traders, then how about the next couple of months? If so, then you should be interested in: "A History of Autumn Declines in the Dow Industrials from 1997 to 2005," by Robert McHugh, of Main Line Investors. He writes, "The Dow Industrials have declined sharply every Autumn for the past nine years in a row, from 1997 through 2005, reflecting an interesting market psychology, and it is setting up to do so again in 2006."

    I don’t know about you, but I am very impressed with "nine times is a row.” And more than that, he says that these were not just "declines," but that "Five of the nine declines were stock market crashes, with declines greater than 15 percent, and a sixth was nearly a crash, plunging 13.2 percent! The smallest decline was still a significant 4.7 percent."

    So, in summary, the Dow went down every autumn for the last nine years? And six times the decline was greater than 13%? Ugh."(snip)
    Last edited by Melonie; 09-03-2006 at 06:11 AM.

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