I’ve spend most of the past few weeks playing the market to the downside, and I got out right before the rally last week and did pretty well. I had a chance to speak with many people over the holiday about the current market, and it still amazes me how people can’t take off their rosy glasses and see the downside that’s still out there. It seems to me like some form of denial since acknowledgement of the risks would require acknowledging that our entire financial system, including the dollar, could collapse, and some people can’t fathom this and refuse to admit it’s possible.

Check out The Financial Ninja’s Scary Fed Charts if you don’t think it’s possible. He also has a great article on the failed economic policies of our current “leaders.” Ron Paul offers his thoughts about the Fed and its failed policies, and continues to push a bill for the abolition of the Fed. Maybe as this continues to play out people will start to listen.

Then there’s the issue of people continuing to look for a bottom in the market. This isn’t a normal bear market. There is serious downside potential still out there, and in my opinion it’s coming soon.

• The ’08 Campaign: Sea Change for Politics as We Know It - [NY Times]
• New Terrain for Panel on Bailout - [NY Times]
  
  The program that was supposed to be transparent and open is ending up opaque and muddy. Big surprise. Be sure to take a look at the graphic for a closer look at the five government officials running this program.
• Let It Bounce, So We Can Short Again - [Financial Ninja]
  
  Examining the case for further declines.
• Economic contractions AND rising prices, dare Reggie utter the “I” word - Enter a global phenomenon - [BoomBustBlog]
• Heh Barney Fife! - [Market Ticker]
  
  Another example of government hypocrisy and/or ignorance. Again, big surprise.

Stop Paying Your Mortgage Today - [The Market Ticker]

I love the subversiveness of this. Of course, just as Karl insists, you should only consider this if you have a “no-recourse” mortgage and can take a hit to your credit score, but it’s a great F-U to the perpetrators of this maliciousness if you can pull it off.

I think that exactly what is going on here is starting to dawn on people, especially those who pay a lot in taxes and do not receive significant handouts from the government. They’re realizing that they are paying for the mistakes of inept policy makers and corrupt businessmen who prey on the financial ignorance of the weak, that they are paying for luxurious expenses-paid retreats and “conferences” for AIG and others that needed to be bailed out.

Also, another article by Mr. Denninger on Bush and his trying to pull a fast one:

Bush - Caught Red-Handed In A Lie - [The Market Ticker]

Wake up people! The only way to stop this crap is to demand your current leaders stop allowing all of this, like when Congress initially listened to the uprising and said “No!” to the bailout, and to vote out those who do not listen. Spread the word.

• Sleepless in Iran - [NY Times]

  It will be interesting to see how the decline in oil prices plays out in countries that were depending on high prices to fuel their spending programs and anti-Western rhetoric, such as Iran, Russia, and Venezuela.

  “(Incidentally, this was exactly what happened to the shah of Iran: 1) Sudden surge in oil prices. 2) Delusions of grandeur. 3) Sudden contraction of oil prices. 4) Dramatic downfall. 5) You’re toast.)

  Under Ahmadinejad, Iran’s mullahs have gone on a domestic subsidy binge - using oil money to cushion the prices of food, gasoline, mortgages and to create jobs - to buy off the Iranian people. But the one thing Ahmadinejad couldn’t buy was real economic growth.”

  To me, this sounds awfully similar to speculative bubbles and the irrational exuberance they create. People get caught up in the effects of a temporary economic situation, thinking it’s a new economic reality, and forgetting that markets are dynamic and can go down as well as up. And the cycle repeats itself.

• Roubini Says U.S. Needs $400 Billion Stimulus Package - [RGE Monitor]

  I’m definitely dismayed to see such a sharp economic mind call for Keynsian “stimulus.”

• Pop Goes The Weasel - [Evil Speculator]

  A good analysis of the current state of the markets

]]> http://www.thetruthshallsetyoufree.net/?feed=rss2&p=51 http://www.thetruthshallsetyoufree.net/?p=49 http://www.thetruthshallsetyoufree.net/?p=49#comments Tue, 21 Oct 2008 22:15:06 +0000 truth08 http://www.thetruthshallsetyoufree.net/?p=49 NY Times has an article that illustrates the perils of oil dependence for countries other than the US, for a change:

3 Oil-Rich Countries Face a Reckoning - [NY Times]

The article examines the potential crises in Venezuela, Iran, and Russia, all three of which were empowered by the recent climb in oil prices and are now subsequently threatened by the more recent decline in oil prices. All three have been increasingly hostile toward the West, especially Chavez. It will be interesting to see what effect the decline in oil prices has on their ambitions.

Chavez has built a cult of personality based on his antogonizing of the United States. Some of his views, despite his grandstanding style, are justifiable, given our history of meddling in the region (all the more reason for us to pull out and stop meddling). But his economic policies and socialist tendencies are doomed to fail. The article cites their inflation rate of 36%, and this will only increase. What will his supporters say when the oil money dries up?

]]> http://www.thetruthshallsetyoufree.net/?feed=rss2&p=49 http://www.thetruthshallsetyoufree.net/?p=48 http://www.thetruthshallsetyoufree.net/?p=48#comments Tue, 21 Oct 2008 16:42:18 +0000 truth08 http://www.thetruthshallsetyoufree.net/?p=48 Two topics caught my eye this morning. The first is a piece from the NY Times on nepotism between Wall Street, especially Goldman Sachs, and Washington:

The Guys From ‘Government Sachs’ - [NY Times]

This of course is nothing new. There is a long history of incestuous relationships between lobbying, big businesses, Wall Street, and Washington. This just goes to show how difficult it can be to root out a lot of this corruption. Recently, I’ve begun thinking that I will still continue to fight and change the system, but I will also spend more energy learning how the system works and use it to my financial advantage in the markets. Not “if you can’t beat ‘em, join ‘em” but using a corrupt system against itself.

The second item is a very interesting article from Stratfor on Europe’s desire for Bretton Woods II. They argue that, instead of Bretton Woods being abandoned in 1971 after the US dropped the gold standard, it is actually still alive, with the US dollar simply taking the place of gold. And they do a good job of giving a historical perspective on the system. But most interesting is what they have to say about the proposed Bretton Woods II:

Ultimately, the Europeans would like to see a shift in focus in the world of international economic interactions from strengthening the international trading system to controlling the international financial system. In practical terms, they want an oversight body that can guarantee that there won’t be a repeat of the current crisis. This would involve everything from regulations on accounting methods, to restrictions on what can and cannot be traded and by whom (offshore financial havens and hedge funds would definitely find their worlds circumscribed), to frameworks for global interventions. The net effect would be to create an international bureaucracy to oversee global financial markets. [emphasis added]

I’ve read a lot of conspiracy theories about one world government, New World Order, and all that, and I’ve always considered such theories with a grain of salt. But it does make me wonder when I see things like this. I for one will be watching very carefully when the new administration comes in and begins to address this issue.

Full text of the Stratfor article after the jump.

The United States, Europe and Bretton Woods II
October 20, 2008

By George Friedman and Peter Zeihan

French President Nicolas Sarkozy and U.S. President George W. Bush met Oct. 18 to discuss the possibility of a global financial summit. The meeting ended with an American offer to host a global summit in December modeled on the 1944 Bretton Woods system that founded the modern economic system.

The Bretton Woods framework is one of the more misunderstood developments in human history. The conventional wisdom is that Bretton Woods crafted the modern international economic architecture, lashing the trading and currency systems to the gold standard to achieve global stability. To a certain degree, that is true. But the form that Bretton Woods took in the public mind is only a veneer. The real implications and meaning of Bretton Woods are a different story altogether.

Conventional Wisdom: The Depression and Bretton Woods
The origin of Bretton Woods lies in the Great Depression. As economic output dropped in the 1930s, governments worldwide adopted a swathe of protectionist, populist policies — import tariffs were particularly in vogue — that enervated international trade. In order to maintain employment, governments and firms alike encouraged ongoing production of goods even though mutual tariff walls prevented the sale of those goods abroad. As a result, prices for these goods dropped and deflation set in. Soon firms found that the prices they could reasonably charge for their goods had dropped below the costs of producing them.

The reduction in profitability led to layoffs, which reduced demand for products in general, further reducing prices. Firms went out of business en masse, workers in the millions lost their jobs, demand withered, and prices followed suit. An effort designed originally to protect jobs (the tariffs) resulted in a deep, self-reinforcing deflationary spiral, and the variety of measures adopted to combat it — the New Deal included — could not seem to right the system.

Economically, World War II was a godsend. The military effort generated demand for goods and labor. The goods part is pretty straightforward, but the labor issue is what really allowed the global economy to turn the corner. Obviously, the war effort required more workers to craft goods, whether bars of soap or aircraft carriers, but “workers” were also called upon to serve as soldiers. The war removed tens of millions of men from the labor force, shipping them off to — economically speaking — nonproductive endeavors. Sustained demand for goods combined with labor shortages raised prices, and as expectations for inflation rather than deflation set in, consumers became more willing to spend their money for fear it would be worth less in the future. The deflationary spiral was broken; supply and demand came back into balance.

Policymakers of the time realized that the prosecution of the war had suspended the depression, but few were confident that the war had actually ended the conditions that made the depression possible. So in July 1944, 730 representatives from 44 different countries converged on a small ski village in New Hampshire to cobble together a system that would prevent additional depressions and — were one to occur — come up with a means of ending it shy of depending upon a world war.

When all was said and done, the delegates agreed to a system of exchangeable currencies and broadly open rules of trade. The system would be based on the gold standard to prevent currency fluctuations, and a pair of institutions — what would become known as the International Monetary Fund (IMF) and the World Bank — would serve as guardians of the system’s financial and fiduciary particulars.

The conventional wisdom is that Bretton Woods worked for a time, but that since the entire system was linked to gold, the limited availability of gold put an upper limit on what the new system could handle. As postwar economic activity expanded — but the supply of gold did not — that problem became so mammoth that the United States abandoned the gold standard in 1971. Most point to that period as the end of the Bretton Woods system. In fact, we are still using Bretton Woods, and while nothing that has been discussed to this point is wrong exactly, it is only part of the story.

A Deeper Understanding: World War II and Bretton Woods
Think back to July 1944. The Normandy invasion was in its first month. The United Kingdom served as the staging ground, but with London exhausted, its military commitment to the operation was modest. While the tide of the war had clearly turned, there was much slogging ahead. It had become apparent that launching the invasion of Europe — much less sustaining it — was impossible without large-scale U.S. involvement. Similarly, the balance of forces on the Eastern Front radically favored the Soviets. While the particulars were, of course, open to debate, no one was so idealistic to think that after suffering at Nazi hands, the Soviets were simply going to withdraw from territory captured on their way to Berlin.

The shape of the Cold War was already beginning to unfold. Between the United States and the Soviet Union, the rest of the modern world — namely, Europe — was going to either experience Soviet occupation or become a U.S. protectorate.

At the core of that realization were twin challenges. For the Europeans, any hope they had of rebuilding was totally dependent upon U.S. willingness to remain engaged. Issues of Soviet attack aside, the war had decimated Europe, and the damage was only becoming worse with each inch of Nazi territory the Americans or Soviets conquered. The Continental states — and even the United Kingdom — were not simply economically spent and indebted but were, to be perfectly blunt, destitute. This was not World War I, where most of the fighting had occurred along a single series of trenches. This was blitzkrieg and saturation bombings, which left the Continent in ruins, and there was almost nothing left from which to rebuild. Simply avoiding mass starvation would be a challenge, and any rebuilding effort would be utterly dependent upon U.S. financing. The Europeans were willing to accept nearly whatever was on offer.

For the United States, the issue was one of seizing a historic opportunity. Historically, the United States thought of the United Kingdom and France — with their maritime traditions — as more of a threat to U.S. interests than the largely land-based Soviet Union and Germany. Even World War I did not fully dispel this concern. (Japan, for its part, was always viewed as a hostile power.) The United States entered World War II late and the war did not occur on U.S. soil. So — uniquely among all the world’s major powers of the day — U.S. infrastructure and industrial capacity would emerge from the war larger (far, far larger) than when it entered. With its traditional rivals either already greatly weakened or well on their way to being so, the United States had the opportunity to set itself up as the core of the new order.

In this, the United States faced the challenges of defending against the Soviet Union. The United States could not occupy Western Europe as it expected the Soviets to occupy Eastern Europe; it lacked the troops and was on the wrong side of the ocean. The United States had to have not just the participation of the Western Europeans in holding back the Soviet tide, it needed the Europeans to defer to American political and military demands — and to do so willingly. Considering the desperation and destitution of the Europeans, and the unprecedented and unparalleled U.S. economic strength, economic carrots were the obvious way to go.

Put another way, Bretton Woods was part of a broader American effort to extend the wartime alliance — sans the Soviets — beyond Germany’s surrender. After all wars, there is the hope that alliances that have defeated a common enemy will continue to function to administer and maintain the peace. This happened at the Congress of Vienna and Versailles as well. Bretton Woods was more than an attempt to shape the global economic system, it was an effort to grow a military alliance into a broader U.S.-led and -dominated bloc to counter the Soviets.

At Bretton Woods, the United States made itself the core of the new system, agreeing to become the trading partner of first and last resort. The United States would allow Europe near tariff-free access to its markets, and turn a blind eye to Europe’s own tariffs so long as they did not become too egregious — something that at least in part flew in the face of the Great Depression’s lessons. The sale of European goods in the United States would help Europe develop economically, and, in exchange, the United States would receive deference on political and military matters: NATO — the ultimate hedge against Soviet invasion — was born.

The “free world” alliance would not consist of a series of equal states. Instead, it would consist of the United States and everyone else. The “everyone else” included shattered European economies, their impoverished colonies, independent successor states and so on. The truth was that Bretton Woods was less a compact of equals than a framework for economic relations within an unequal alliance against the Soviet Union. The foundation of Bretton Woods was American economic power — and the American interest in strengthening the economies of the rest of the world to immunize them from communism and build the containment of the Soviet Union.

Almost immediately after the war, the United States began acting in ways that indicated that Bretton Woods was not — for itself at least — an economic program. When loans to fund Western Europe’s redevelopment failed to stimulate growth, those loans became grants, aka the Marshall Plan. Shortly thereafter, the United States — certainly to its economic loss — almost absentmindedly extended the benefits of Bretton Woods to any state involved on the American side of the Cold War, with Japan, South Korea and Taiwan signing up as its most enthusiastic participants.

And fast-forwarding to when the world went off of the gold standard and Bretton Woods supposedly died, gold was actually replaced by the U.S. dollar. Far from dying, the political/military understanding that underpinned Bretton Woods had only become more entrenched. Whereas before, the greatest limiter was on the availability of gold, now it became — and remains — the whim of the U.S. government’s monetary authorities.

Toward Bretton Woods II
For many of the states that will be attending what is already being dubbed Bretton Woods II, having this American centrality as such a key pillar of the system is the core of the problem.

The fundamental principle of Bretton Woods was national sovereignty within a framework of relationships, ultimately guaranteed not just by American political power but by American economic power. Bretton Woods was not so much a system as a reality. American economic power dwarfed the rest of the noncommunist world, and guaranteed the stability of the international financial system.

What the September financial crisis has shown is not that the basic financial system has changed, but what happens when the guarantor of the financial system itself undergoes a crisis. When the economic bubble in Japan — the world’s second-largest economy — burst in 1990-1991, it did not infect the rest of the world. Neither did the East Asian crisis in 1997, nor the ruble crisis of 1998. A crisis in France or the United Kingdom would similarly remain a local one. But a crisis in the U.S. economy becomes global. The fundamental reality of Bretton Woods remains unchanged: The U.S. economy remains the largest, and dysfunctions there affect the world. That is the reality of the international system, and that is ultimately what the French call for a new Bretton Woods is about.

There has been talk of a meeting at which the United States gives up its place as the world’s reserve currency and primacy of the economic system. That is not what this meeting will be about, and certainly not what the French are after. The use of the dollar as world reserve currency is not based on an aggrandizing fiat, but the reality that the dollar alone has a global presence and trust. The euro, after all, is only a decade old, and is not backed either by sovereign taxing powers or by a central bank with vast authority. The European Central Bank (ECB) certainly steadies the European financial system, but it is the sovereign countries that define economic policies. As we have seen in the recent crisis, the ECB actually lacks the authority to regulate Europe’s banks. Relying on a currency that is not in the hands of a sovereign taxing power, but dependent on the political will of (so far) 15 countries with very different interests, does not make for a reliable reserve currency.

The Europeans are not looking to challenge the reality of American power, they are looking to increase the degree to which the rest of the world can influence the dynamics of the American economy, with an eye toward limiting the ability of the Americans to accidentally destabilize the international financial system again. The French in particular look at the current crisis as the result of a failure in the U.S. regulatory system.

And the Europeans certainly have a point. If fault is to be pinned, it is on the United States for letting the problem grow and grow until it triggered a liquidity crisis. The Bretton Woods institutions — specifically the IMF, which is supposed to serve the role of financial lighthouse and crisis manager — proved irrelevant to the problems the world is currently passing through. Indeed, all multinational institutions failed or, more precisely, have little to do with the financial system that was operating in 2008. The 64-year-old Bretton Woods agreement simply didn’t have anything to do with the current reality.

Ultimately, the Europeans would like to see a shift in focus in the world of international economic interactions from strengthening the international trading system to controlling the international financial system. In practical terms, they want an oversight body that can guarantee that there won’t be a repeat of the current crisis. This would involve everything from regulations on accounting methods, to restrictions on what can and cannot be traded and by whom (offshore financial havens and hedge funds would definitely find their worlds circumscribed), to frameworks for global interventions. The net effect would be to create an international bureaucracy to oversee global financial markets.

Fundamentally, the Europeans are not simply hoping to modernize Bretton Woods, but instead to Europeanize the American financial markets. This is ultimately not a financial question, but a political one. The French are trying to flip Bretton Woods from a system where the United States is the buttress of the international system to a situation where the United States remains the buttress but is more constrained by the broader international system. The European view is that this will help everybody. The American position is not yet framed and won’t be until the new president is in office.

But it will be a very tough sell. For one, at its core the American problem is “simply” a liquidity freeze and one that is already thawing. Europe’s and East Asia’s recessions are bound to be deeper and longer lasting. So the United States is sure — no matter who takes over in January — to be less than keen about revamps of international processes in general. Far more important, any international system that oversees aspects of American finance would, by definition, not be under full American control, but under some sort of quasi-Brussels-like organization. And no American president is going to engage gleefully on that sort of topic.

Unless something else is on offer.

Bretton Woods was ultimately about the United States trading access to its economic might for political and military deference. The reality of American economic might remains. The question, then, is simple: What will the Europeans bring to the table with which to bargain?

This report may be forwarded or republished on your website with attribution to www.stratfor.com

]]> http://www.thetruthshallsetyoufree.net/?feed=rss2&p=48 http://www.thetruthshallsetyoufree.net/?p=47 http://www.thetruthshallsetyoufree.net/?p=47#comments Sat, 18 Oct 2008 20:49:40 +0000 truth08 http://www.thetruthshallsetyoufree.net/?p=47 People want to know what caused this crisis, and more importantly, how to fix it. Everything we’ve heard from our leaders in Washington has been wrong, and that is why the market is not responding to the “rescue package” (read: Wall Street bailout) and to the billions of new dollars being pumped into the system. Most in the media are more clueless than the leaders in Washington. What we’re seeing is a failure of the conventional wisdom of this country for the past century, and especially since 1971.

Other voices are out there, such as Ron Paul and Jim Rogers. They have an answer. My only hope is that people listen.

Ron Paul in 2012? - [Salon]

An excerpt:

That’s what this whole story is about, the end of a monetary system that we’ve had since 1971. And something has to give. You just can’t create more money out of thin air and propping up everybody.

It’s an immoral system. You’re asking the poor people to bail out the rich. You’re asking the innocent people to bail out the guilty. You’re asking people to just totally defy the Constitution because there’s no place in the Constitution that says that we can do these things.

And, besides, economically, it’s a disaster. This is going to cause a great deal of harm. It’s like a drug addict taking a strong fix, and he feels better for a day or two. But believe me, we’re going to kill the patient. And the patient here is the dollar system and our entire world economy.

And a great interview with Jim Rogers (hat tip Campaign for Liberty):

]]> http://www.thetruthshallsetyoufree.net/?feed=rss2&p=47 http://www.thetruthshallsetyoufree.net/?p=46 http://www.thetruthshallsetyoufree.net/?p=46#comments Sat, 18 Oct 2008 00:01:18 +0000 truth08 http://www.thetruthshallsetyoufree.net/?p=46 I started getting interested in the stock market back in 2000, when people were still making millions in tech stocks and the mania was close to its apex. I decided to open a brokerage account, and promptly lost $800. So I pulled my money out, and decided to learn what I was doing before I lost what little money I had. I’ve read a lot of books since then, learning about as many aspects of markets, investing, finance, and economics as I could. Here are the books that have had the biggest effect on me and that I have enjoyed the most. Let me know if you disagree or if you think there should be some added.
1. Trader Vic

   The Trader Vic books by Victor Sperandeo completely changed my way of thinking about investing and the markets. He describes his approach to trading from all angles, including fundamental, technical, and psychological. He gives a good breakdown of technical analysis, including the definition of a trend and determining when a trend begins and when it ends. His writings on fundamentals, including the market distortions created when interest rates are manipulated by a central banking instead of being determined by natural market forces, is actually a great primer for Austrian economics. It’s a little hard to get through, but once you begin to understand what he’s talking about, you’ll never look at what happens in this country the same way again. In the second book, he describes how call and put options can give you tremendous leverage without significantly increasing your risk, and I’ve been using some of these strategies in my own trading since reading this.

   I cannot recommend these books enough.

2. Reminiscences of a Stock Operator

   This book is a true classic. I can’t even remember how many interviews I’ve read of successful traders that mention this book. Not only is it a great story following his ups and downs, but his descriptions of his trading strategies are particularly illuminating, especially the idea that markets will always follow the path of least resistance.

3. Jim Rogers

   I haven’t had the chance to read the book on China yet, but the other two are great reads on how an astute, former professional investor views what is happening in the world. Adventure Capitalism is the story of his trip driving around the world, and his thoughts on each place he visits from an investor’s point of view. Great stuff for someone who invests in international markets. In regards to our own country, he also describes the perils of fiat currency, and how actual inflation rates are much higher than what the government reports. His book on commodities called the great bull run that has been happening in commodities markets right as it was beginning. I inquired into his commodity fund after reading this book, but did not have the $10,000 minimum investment. I wish I had, because it’s gone up significantly since then.

4. Creature from Jekyll Island

   I loved a comment I read about this book: if you want to take the red pill when it comes to what is going on in this country, read this book. You’ll learn about the nefarious beginning of the Federal Reserve, how fractional reserve banking and fiat currency has always resulted in economic collapse and ruin throughout history without exception, how central banks benefit the financial elite, and how the system is rigged to privatize gains and socialize losses (sounds familiar, doesn’t it?). I’ll have a lot more to say about this book when I write up a full review in the near future. This book will blow your mind.

5. Market Wizards

   These books are also classics in the investing world. They provide a great way to gain insight into the minds of those who are truly successful in the investing world. What struck me after reading these books is that there are a multitude of ways to make money in the markets, as each of these investors has their own personal strategy, but the one common denominator among them all is discipline. It’s the one thing that they all mention as to why they’ve been so successful. Very insightful.

6. When Genius Failed

   Those who remember the meltdown of Long Term Capital Management in 1998, and even those who don’t, will be fascinated by this story. He describes how this group of truly brilliant traders and academics came together to create a financial juggernaut that was wildly successful. He gives great detail on their strategies and how they’re trading methodologies actually work, without getting too bogged down in arcane finance. This story shows once again how dangerous it is to put so much faith in computer models based on the unlikelihood of 100 year events when these market-swinging events actually happen in rapid succession. Most importantly, this book describes the precursor to the current financial crisis, and how dangerous and poorly understood these derivatives are, and how destructive they can be.

7. FIASCO by Frank Partnoy

   These books are the reason I get angry when people say that no one saw the current financial crisis coming. Frank Partnoy was talking about how dangerous derivates are and how poorly they are understood years ago. He does a good job of describing how these derivative contracts actually work, and why Wall Street was so successful in selling them. If you read these books, you’ll be miles ahead of everyone else when it comes to understanding how we got into this mess.

8. Trend Following

   Learn the story of the Turtles and how trends can be one of the most powerful investment strategies out there.

9. Cramer

   While I am reluctant to put Jim Cramer on this list because I would never recommend following his investment advice, I have to admit that I was entertained by this book. Unlike his recent Mad Money books, this book is the story of how he rose to run a large hedge fund. Living vicariously through his insane, violent blowups is actually kind of fun, and this book certainly explains how stressful being a hedge fund manager can be. I definitely wouldn’t recommend this for investment advice, but it is entertaining.

10. Ayn Rand

    OK, so this isn’t explicitly related to finance or investing, but Ayn Rand has had a much bigger effect on my thinking toward the markets than any book on this list. From her books, I’ve learned the importance of individual responsibility and creativity and the damage caused by self-sacrifice for the “greater good” and corrupt leaders with poorly defined beliefs and a reliance on pragmatism. Atlas Shrugged was especially world-changing. Behavior by people in the media and people in charge of the country, and people in general, that used to baffle me know makes sense. This can be difficult reading, but is well worth it. In my mind, she continues to prove herself true every day.

]]> http://www.thetruthshallsetyoufree.net/?feed=rss2&p=46 http://www.thetruthshallsetyoufree.net/?p=45 http://www.thetruthshallsetyoufree.net/?p=45#comments Fri, 17 Oct 2008 21:17:55 +0000 truth08 http://www.thetruthshallsetyoufree.net/?p=45 Mr. Rithotlz at The Big Picture brings us the story of Andrew Lahde, a manager of a small California hedge fund that returned 866% betting on declines brought about by the sub-prime crisis, and his resignation letter with a big F-U to those who deserve it. “May meritocracy be part of a new form of government, which needs to be established.” Amen brother.

Andrew Lahde: Goodbye! - [The Big Picture]

]]> http://www.thetruthshallsetyoufree.net/?feed=rss2&p=45 http://www.thetruthshallsetyoufree.net/?p=44 http://www.thetruthshallsetyoufree.net/?p=44#comments Fri, 17 Oct 2008 17:43:45 +0000 truth08 http://www.thetruthshallsetyoufree.net/?p=44 Karl Denninger has a great post on the fraud being presented as a bailout or “rescue package” and the level of corruption involved:

The Fraudacity Of American Finance - [The Market Ticker]

Some points:

• Banks are not going to use the government-injected money to lend out. They are going to hoard it to “improve their capital ratios.”
• Executive compensation limits “mean little or nothing.”
• The outright fraud of the CDS market

How long are we going to put up with this? When the $700 billion bailout package was first put before Congress, thousands of people flooded the offices of their representatives with their disproval of this fleecing of the taxpayer, and Congress buckled and actually listened for once.

This shocked the world, especially the money powers. But they recovered quickly, and put their flunkies in the media into action saying how this bailout was necessary for “Main Street” and how the economy would collapse, and stuffed a bunch of pork into the new bailout plan, and forced this down our throat. We’re seeing now their disingenuousness and corruption.

Are you willing to keep paying the salaries and paying for the mistakes of these corrupt, clueless executives, and paying for executive retreats at AIG, and allowing these corrupt officials to continute to run roughshod over our rights as citizens of this country and to squander our tax dollars? I know I’m not.

Campaign for Liberty sent out an email yesterday asking for donations. They are planning a large drive to increase voter awareness of this corruption. I’m going to make a donation today, and will continue to let my representatives know what I think of this bailout, and I urge you to do the same. The full text of the Campaign for Liberty email is after the jump.

Let’s take our country back. Let’s put a stop to the fraud and corruption.

October 17, 2008

Dear Friend of Liberty,

It is time to hold the politicians accountable!

As you well know, the unconstitutional “bailout” of failed lenders that became law earlier this month has, as Dr. Paul predicted, thrown the economy into even more turmoil.

As Dr. Paul said, the free market did not cause this problem and only the free market can fix it.

But even as I write this, Big Government insiders from both parties are frantically working to design even worse legislation for the next Congress.

This legislation may even be presented in the upcoming lame duck session of Congress to take place after the November elections.

They just don’t get it!

And unless you and I, and tens of thousands of other Liberty-minded Americans act now, they will continue us down the road of socialism.

That’s why I am asking for your help right away.

Will you make a special contribution of $500, $250, $100, $50, or $25 today by contributing at www.campaignforliberty.com/donate.php ?

You see, your Campaign for Liberty staff is putting the finishing touches on a hard-hitting program to take place over the next 15 days in key districts and states letting concerned Americans know just how their representatives voted on the bailout.

The goal of this effort is two-fold.

First, we want to make sure as many people as possible in key states and districts know whether or not their Congressmen and Senators stood with the Constitution and voted against the bailout, or sold out the American people for this socialist power grab.

Second, we want to let those Congressmen and Senators who voted for the bailout know that the American people have taken notice.

And we want to let ALL the candidates know that this is a defining issue both now and in the future.

We plan to go into as many districts and states as possible, like North Carolina’s 4th Congressional District, where incumbent David Price (D) voted for the bailout and is being challenged by strong bailout opponent B.J. Lawson.

To do this, Campaign for Liberty plans to:

Produce and distribute slim jims specifically tailored to districts/states that tell how each Congressman and Senator voted. These will be available soon on the Campaign for Liberty web site for every district and state in the country.

And we will also print and distribute these pieces in as many of the key districts as funds allow.

Send a series of email blasts into many key districts and states, urging our members and supporters to contact the candidates and demand they oppose any further “bailouts.”

Run hard-hitting newspaper ads in as many places as funds allow.

Run radio ads and hold news conferences announcing the votes cast on the bailout.

Flood key districts with tens of thousands of phone calls letting people know where their Congressmen and Senators stood on this very important issue.

Of course, carrying out this plan will cost money. That is why your Campaign for Liberty must raise $325,000 in the next few days.

I hope you will make a special contribution today of $500, $250, $100, $50, or $25 right away.

As you know, this bailout—which its supporters tried to rename a “rescue package” in order to make it more palatable to Americans—allows the federal government to “purchase” (with fiat and borrowed money) $700 billion in bad mortgage-related assets, putting the taxpayer on the hook for the mistakes of the Federal Reserve, Congress, and Wall Street.

Despite the rhetoric used by the bill’s proponents, this bailout will only prolong and worsen the economic consequences we must endure while the market purges itself of these bad assets.

And though this bailout passed, the battle is not over.

Matter of fact, the fight has intensified, as the Treasury Secretary is now using the powers granted under the bailout to “inject capital” into our nation’s banks—essentially nationalizing them.

To get the message out to hundreds of thousands of Americans in the next 15 days so they can hold their politicians accountable, Campaign for Liberty must raise $325,000.

For this effort to have the intended effect, we will need sufficient funding. As one of my mentors has always said, “You can’t save the world, if you can’t pay the rent.”

That’s why I hope you will agree to a special contribution of $500, $250, $100, $50, or $25 to help out in this important fight by going to www.campaignforliberty.com/donate.php

All of the funds raised in the next week will go toward this effort to make those responsible—regardless of party or position—pay a price with the American people for their abuse of government, tax revenue, and our nation’s future.

With your support, I want to keep up the fight and expand it to more and more Americans—launching a tidal wave of phone calls, emails, and faxes to the politicians of both parties, letting them know we will accept NO more bailouts and will remember their votes.

Thanks for all you have done, and I ask for your crucial continued support of Campaign for Liberty and the cause of Freedom.

In Liberty,

John Tate

President

Campaign for Liberty

P.S. Time is very short. There is one time politicians may listen to the people – right before the election.

If at all possible, please make that special contribution at www.campaignforliberty.com/donate.php so we can contact tens of thousands of Americans over the next few days.

Because of Campaign for Liberty’s pending tax-exempt status under IRC Sec. 501 (C) (4) and its state and federal legislative activities, contributions are not tax deductible as charitable contributions (IRC § 170) or as a business deduction (IRC § 162(e)(1)).

]]> http://www.thetruthshallsetyoufree.net/?feed=rss2&p=44