How much of what goes on is just blah...blah...blah...just people talking?
Probably 90%. People come to think what they must think when they must think it. Then they blah...blah...blah to convince each other that they're right.
But what really matters are the deep, long patterns...patterns of history that no one can control and few take the trouble to try to understand.
Bill Gross: "I think it is important to recognize that General Motors is a canary in this country's economic coal mine; a forerunner for what's to come for the broader economy. Their mistakes have resembled this nation's mistakes; their problems will be our future problems. If the US and General Motors have similar flaws and indeed symbiotic fates, they appear to be conjoined primarily by the un-competitiveness of their existing labor cost structures and the onerous burden of their future healthcare and pension liabilities. Perhaps the most significant comparison between GM and the US economy lies in the recognition of enormous unfunded liabilities in healthcare and pensions. Reportedly $1,500 of every GM car sold in the dealer showrooms goes to pay for current and future health benefits of existing and retired workers, a sum totaling nearly $60 billion. The total future healthcare liability for all US citizens can be measured in the tens of trillions."
Bill Bonner
for The Daily Reckoning Australia
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About the Author
Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.
Comment by Dan on 5 June 2009:
I read somewhere that companies like Fiat are going to buy up the useful left overs from the GM break-up. But I wonder who will buy up the left overs of the USA break up ... will it be that simple?
Comment by Smack MacDougal on 6 June 2009:
Bill Gross of PIMPco, the U.S. junk bond dealer, is a consummate insider.
This guy shall say anything to keep cash flowing to PIMPco.
Most of what he says publicly amounts to useless rhetoric.
Comment by Michael on 9 June 2009:
Economic commentators, including some of the big names of the last few decades are calling the recession as largely defunct. There do seem to be 'green shoots' emerging, or is this simply selective reporting and framing of the economic data?
Sentiment is certainly growingly optimistic. Have we seen the bottom in equity markets, seems so. This bounce, if it is a bull market bounce, seems very resilient.
Comment by Michael on 9 June 2009:
did I say "bull market" bounce? You know what I mean ...
Comment by Dan on 10 June 2009:
Michael, people don't like having money lying around uninvested - it makes them nervous. The rally might be partly because people are just glad to have gotten back into it after staying out so long. Also, Obama is popular, and China is building roads and stuff (in China).
But are the fundamental flaws of the economy anywhere closer to being fixed? Russia is on the verge of going for a metals based currency (Palladium, perhaps), and China is thinking of going Gold based. America's economy has proven to be based on a pack of lies, and it's still unwinding.
Given all this, and more, would you be confident in a sustained rally? Is the ASX200 going to be at 5000 points by December? I think the rally is fine if you can make money off it, but as it was mentioned on DR some time back (I think), the market is likely to remain like a shark infested pool for some time to come.