Wednesday, January 20, 2016

HIGH FREQUENCY TRADING...(ORIGINAL POSTING 8/6/11)



When the housing boom was taking place it developed huge vested interest in the continuation of the housing bubble. A voice in the dark could point out the absurdities of what was happening but the enjoyment of inflated prices and profits overwhelmed sanity, logic, discipline and history.

In my opinion, we are now being faced with a "time bomb" that will far exceed long term capital management, the insurance protection decline of the 1980s and the financial collapse of 2008. This huge "Black Swan", huge beyond comprehension, will hit when least expected and we will wonder why it wasn't dealt with before. The answer will be found underneath the rubble of certain greedy Wall Street types and vested political interests.

We cannot permit automated machine type trading, with no relationship to companies outlook, etc. to dominate the volume of trades in the stock market. There is no excuse, none whatsoever, for creating a machine driven gambling casino mentality in order to justify the existence of capitalism.

Here is what's going to happen. A computer driven decline will occur and the brakes will fail due to human error or whatever causing the equity wealth of the country to be sharply cut again. Because there will be something happening in the world at that time, recovery will not be as fast as it was in the late 2000's. All computerized trading, of the type we are referring to, should be made illegal and stopped before its too late.

The vested interest will tell you otherwise and make their case. Just like in the long term capital case they are mostly using other people's money and are more concerned with their chance of winning than losing. The monies not theirs anyhow and there is no concern for the system, only their own profits.

Look at the erratic swings in the stock market that have occurred in the last few weeks. We draw this as a small example, a very small example, of what is coming if we don't stop this type of computerized trading.

CAPITALISM WILL FAIL IF THIS IS HOW IT'S CONDUCTED.
P.S. Please remember that I am a very strong supporter of capitalism and many of the activities that our financial firms participate in. The probably isn't a better system than ours.

Tuesday, December 8, 2015

PROFILING IS SMART...PREJUDICE IS DUMB...

Its obvious we can't live without profiling. Get over it.  Profiling is used in every aspect of our life from building an investment portfolio, to picking a mate, a car or anything else.  Prejudice is DUMB.  Profiling is SMART.

Wednesday, November 18, 2015

ISIS, AL QAEDA AND THE PLAN OF PHASES..(ORIG. PUBLISHED 7/11/14)

What looks like scattered chaos is really an expansion of the Arab "Plan of Phases" manifesto.

Knowing that it was unlikely than any coalition of  terrorist groups could militarily defeat democracy, the plan was expanded.

In essence it says that it will keep on attacking, through one means or another, for so  long a period of time as is necessary so that ultimately capitalism  would collapse from within, as the left and the right can no longer find common ground.

President Obama's appeasement policies have helped expand the "plan of phases" so that it will become worldwide.

It looks as if we just didn't provide enough help to Syria, Iraq, Afghanistan, Libya and our southern borders.  The reality is that a vast plan has been developing for years where a slow and steady encroachment of our preferred way of life would be under assault from an increasing number of directions.

We have had to create the transportation safety department, increase the NSA surveillance, face immense problems on our borders and are finding that every where we have left militarily the opportunity for the "bad guys" to annoy us has been increased.

It's unfortunate that we are in such a position.  Look at it this way.  Israel does not want to be in its continual state of military and security preparedness, but it is.  President Obama's policy of retreat has failed.  Every day that passes it's becoming more probable that the risk of reversing the plan of phases against us will be higher and higher.

This didn't start on 9/11, it's been in the planing stage for real long time.




Tuesday, September 22, 2015

ITS TOUGH AND EXPENSIVE TO CREATE NEW DRUGS...ORIGINALLY PUBLISHED 6/4/12

Three major drug companies spent $100 billion dollars on Research and devleopment in the last five years.

Three major generic drug companies spent under $10 billion on research and development in the last five years.

Since important new drugs are almost impossible to find the major drug companies are likely to find fewer new drugs over the next ten years as their cash flow will decline.

Since generic companies don't do much research or find too many new drugs, the net result will be less drugs, more illness and consequently, more expense.

Unless we get very lucky and the drug companies have a few more breakthroughs.

Furthermore, there is a strong likelihood of declining morale and a significant weakening of the talent who are able to find new drugs.

Wednesday, September 9, 2015

SYRIA, IRAN & RUSSIA - ANY PRESIDENT 'S NIGHTMARE ALLEGIANCE...(ORIGINALLY PUBLISHED 8/29/13)

When the Syrian insurgency began President Obama was given a "one time only" opportunity to quickly prevent escalation.  Inaction was followed by inaction and well over 100,000 people have been killed, wounded or misplaced.

The complexity of facilitating an end to the carnage now, creates a much more difficult, expensive. risky and limited set of options.

As we wrote in an earlier blog, the cost of ending atrocities early would have been much less than the cost is today and the longer term implications of inaction are not any clearer.

The character of any President is most tested when issues of life and death for many take over the landscape.


Thursday, August 27, 2015

SOLYNDRA SCANDAL - ORIG. PUBLISHED 9/26/11

We first published our blog below about the Solyndra scandal on September 26, 2011.
There's an incredibly misleading editorial about the Solyndra scandal in a leading New York newspaper. A simple review of the company's prospectus immediately highlights the following:

1. Several executives had compensation approaching a million dollars.
2. There were at least 25 million stock options made available to various parties.
3. Large hedge funds were significant owners of the company's shares.

The editorial blames the bankruptcy on a "stunning collapse in the price of solar panels".

It is obvious that before an investment of $500 million occurred analytical reports should have been written forecasting the trend of solar panel prices (if the company did not have enough big commercial customers that should have been easily detectable to anyone that took the time to review the company's position in the marketplace).

To compare the financial crises with the solar panel market is patently absurd. Home prices have risen for many years whereas solar panel prices were really a commodity product.

The idea that risking is what its all about is a joke on its face. Its easy to take risks that are totally wrong, but success is determined by wise decisions. The outlook for solar panel pricing in the United States was obviously negative since the number of companies that have been started in just a few years indicates relatively simple ease of entry and requires no particular technological advantages.

Another disadvantage the solar companies faced is the fact that oil producing countries want to keep any alternative sources of energy out of the picture even though most oil is used for cars and trucks, not power generation. Coal is the only true competitive alternative to solar energy and reducing the demand during the next decade would cause serious additions to unemployment. Unfortunately most of the coal miners could probably not be working in the solar industry.

The relationship between the hedge funds, all sorts of people in government and whether there were unions involved in the Solyandra workforce is only the tip of what seems to be a huge potential scandal of political power with our money.
 

Shepard Osherow. All Rights Reserved