Heyer Capital, LLC

investment management and timely advice from a local CPA (Fox Valley, Wisc.)

Archive for November 2009

Happy talk

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I think it was the movie “Demolition Man” with Stallone describing a future dystopic society the prohibited speaking negatively about conditions.  Certainly the movie was more about explosions and Rambo’s positively unVictorian courting of the female lead character than a thorough discussion of why we, as humans, always want to hear the good news affirming that we are right and correct in our decisions, instead of being correctly told we’ve made incorrect decisions.

I think there’s an inverse economy of scale in telling people they’ve screwed up their financial lives.  If I’m talking with a man, one-on-one, over a cup of coffee, we can constructively discuss the errors he’s made and encourage positive actions.  If the man brings his wife (or vice versa) the conversation must include many points of justification as to why mistakes were made, and how it was a good idea at the time, or gulp, my broker told me he sold that to everyone. Emotionally, we don’t want to be wrong in front of a crowd.

How does one warn an entire nation that the path is wrong?  Our government has destroyed the value of our currency by 99% since the Federal Reserve was created by the banking interests. Our future obligations for Social Security and Medi-welfare will require Soviet level tax policies.  Financial asset bubbles have been popped, yet the same failed actions that extended the Great Depression have to be experienced by another generation.

I encourage you, dear reader, to unplug your TV. Stop being told what news means. Start using the internet selectively to read the news yourself and discern meaning yourself.  Broadcast information has to be made happy and unoffensive enough to placate the masses. Narrow-cast information, as in the internet and blogosphere, by the nature of its creation and necessity of avoiding dilution, is direct and poignant.  Stick with the new media.

T-bills are trading at a yield of nearly nothing, the same prices at the depth of the financial crises in the past year. (Perhaps I should add, the crisis has not gone away or been papered over, instead, it is just part of people’s awareness.)  The weak Greeks have screwed something up overnight, and the Dubai petro-princes have discovered that even foolish loans have to be repaid.  The risks of the world haven’t gone away, and the Congress’ Federal Reserve continues its war on savers at a time when we need savings.

 

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Written by heyercapital

November 27, 2009 at 7:06 am

Posted in Austrian Econ, Econ

CEO: I’m not going to hire anybody in the US

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This is largely a repost from Jeff Matthew’s “Is Not Making It Up” blog.

Comments from Emerson Electric CEO David Farr.

“I’m Not Going to Hire Anybody in the United States”

“Now, to tell you how bad this is and tell you what I think Washington is doing right now, Washington is doing everything in their manpower capability to destroy US manufacturers, fundamentally destroy US manufacturers.

“Cap and trade, medical reform, labor rules, whatever they want to do, raise taxes. They’re just going to destroyed jobs. We have already reached 7.3 million jobs in this downturn. We’re going to 8. That is a summation of the last four downturns.

“So what do you think the recovery is going to be in jobs? It ain’t going to be very good. I listen to everything Washington is doing — wasting money, raising the deficit to 10, $12 trillion — the debt level to 10, $12 trillion, going to $23 trillion; raising taxes; putting regulations and requirements on me as a manufacturing company.

“What do you think I’m going to do? I’m not going to hire anybody in the United States. I’m moving. So they’re doing everything possible to destroy jobs, in my opinion. That’s my opinion as a manufacturer and we employ 125,000 people worldwide. So I do know what the (expletive) I’m talking about.

“We used to employ a lot more in the United States and we will continue to move [all this]. When I see guys like this, Wall Street bailouts, car bailouts, I’m looking — what are these guys doing with our money? They’re wasting trillions of dollars, trillions of dollars.

“So what they are going to do, they’re going to pass a new medical healthcare, raise my costs, jobs will go. Cap and trade, tax me, jobs will go. It’s pretty straightforward. What they’re doing right now ain’t working. 8 million jobs, summation of the last four downturns….

Written by heyercapital

November 23, 2009 at 8:49 am

Posted in Uncategorized

inflation vs deflation

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Estimates are that global government banks and agencies have shoveled against the bubble upwards of $30 Trillion (that’s a ” T “) in direct aid and indirect guarantees.  Does that mean we’re facing a hyperinflationary hell?

Not necessarily.  If the trillions upon trillions were in the form of currency, then we’d be on a direct path through Thermopylae. Instead, the vast vast majority of the aid is in the form of credit reserves and contingent taxpayer guarantees.  So long as the reserves remain just that — reserves — and are not put into general use, then their effects on the system are limited only to keep zombie banks (and their creditors & establishment owners) above ground.

Behind the curtain — think Wizard of Oz — the central banks are trying to figure out the best way to remove these reserves from the system.  And government/central banks have never been able to time that shift correctly.  Fortunately, the public’s unwillingness to borrow and the bank’s unwillingness to lend keep the reserves out of reach.

(BTW, I facilitate the local Dave Ramsey Financial Peace University course. Believe me, people are increasingly very unwilling to borrow.  I mean not a thin dime  ever, ever again.  And we’re teaching our children that too. There are inter-generational consequences to this extended crisis.)

 

Written by heyercapital

November 16, 2009 at 9:25 am

market trend line

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The general market (summarized here with the S&P500 ETF) has had a powerful up trend the past eight months. A peculiarity of it is the major trendline connecting the price action in March, July and early October.  To make it to new high ground (toward “Point A“), the market will have to pass through not only the natural doubting resistance of new highs but also up through the strong trendline.

 

S&P5 chart trend 6 3

Failure to press through toward “Point A” possibly sets us up for a head and shoulders reversal.

Written by heyercapital

November 6, 2009 at 4:25 pm

Posted in stock ideas

Democracy has been diluted

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Linked here is an extraordinarily interesting CSPAN commentary & Q&A with Janet Tavakoli.

Written by heyercapital

November 3, 2009 at 11:09 am

Posted in Business/Econ