It’s a throwdown… a feud at Taipan Daily… Lass is long and Litle is short…
Both of our esteemed editors see pretty much the same root causes, both for the economy’s current woeful state and the market’s gassy little rally. And they both suspect that in the end, unwary investors will most definitely lose some coin.
But while Adam is tempted by the opportunity to ride along with Washington’s rigged bet, Justice wants to get as far away as possible from what will eventually be ground zero.
Both state their cases – and also discuss the AIG debacle, rising gold prices, and the latest trouble for U.S. banks – below…
What’s $182 Billion Between Friends?
AIG underwrote the risk of Wall Street’s mortgage bond speculations. And when it all hit the fan, Washington stepped in with some 182.5 billion of your dollars to back up those policies. Sound risky? Perhaps even fiscally irresponsible? You bet it was!
So far this August, these hollow assurances have caused AIG shares to rise from $12.97 to $55.90, an astounding gain of 331%. In one day last week, investors traded 149 million shares in a stock that may, at any moment, be revalued to zero.
Now why would such a “zombie stock” be allowed to roam free like this? Adam Lass offers his insight on this frankenstock right here…
All Aboard the Fail Train
Why are bear market swings so violent? In part because financial markets are structurally naïve. It’s very easy to take a handful of short-term data points and fashion them into a trend without considering the realities of the bigger picture. Investors have shown a remarkable tendency to do this over and over again without fail. As a number of men have observed in one form or another, “What we learn from history is that we don’t learn from history.”
Justice explains why September is great for gold stocks… why drunken gamblers are buying AIG… explores why there are more bank failures… and shares some choice reader opinions on the Fed right here…
Is the U.S. on the Road to Oligarchy?
Historically, the U.S. has not been a jealous country when it comes to wealth – except in cases of blatant fraud and deceit.
The emergence of a two-track economy, then, is a real threat to American ideals. To the degree that hard-working individuals look around and say no, the system is NOT fair... that yes, the system IS rigged against me... the rugged individualism and dynamic spirit that long set the country apart comes under threat.
Can we really be recovering nicely when so much power, money and influence is being concentrated in such a small space? Can the country really be “okay” when the very backbone of the U.S. economy (small business) has been left to starve, pressed on all sides by creeping taxation, withheld credit, lower consumer spending and higher raw materials prices? Justice explores here…
Biblical Plagues, Government Mischief and 194% Gains
School has started early in a fair number of southern towns and counties because system administrators are worried about H1N1 preventing the kids from logging in the required number of days.
The schools are not the only ones fretting about potential disruptions. Homeland Security Secretary Janet Napolitano is warning that we should expect “a big influx” of flu cases this fall, and ought to prepare as best we can. She specifically advises that we wash our hands and cough into our sleeves: “We’re in all likelihood going to have them before the vaccine is available.”
According to Adam, there are three very worrisome things about this statement… and also three ways to profit from it. Read his take here…
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The Latest Trouble for Banks… and U.S. Taxpayers
Did you know that the IRS (U.S. Internal Revenue Service) considers all U.S. assets subject to a possible inheritance tax, almost regardless of who holds them or why? The IRS also enforces an extremely vague and cloudy set of guidelines as to what circumstances make an individual a “U.S. person,” and thus subject to U.S. tax.
Based on murky IRS precedent, there is a risk of a non-U.S. investor accidentally stumbling into legal taxation treatment as a “U.S. person” – regardless of whether said investor has a U.S. passport or has even ever set foot in the United States.
Justice explores America’s “iron tax curtain” and what it means for you right here…
Global Hopes Burst by China Bubble
With global economies pinning their hopes on China to pull us into a recovery, what does a plummeting Chinese exchange mean? And what do investors do about it? Read on for more details.
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