US Treasury Bonds Soar on the News of Their Own Downgrade?

Anyone who’s been seriously securities pricing over the last several years has seen a series of bizarre pricing anomalies in securities as markets have gone from boom to bust- back and forth. Taken individually, any of these pricing anomalies as the market moves would be a challenge to Efficient Market Hypothesis (EMH) notion that the current price of a security reflects the most current analysis of information regarding that security. EMH proponents have a hard time explaining the internet bubble, or really any security that seems to defy rational explanation.

Still, people put stock in the pricing mechanism of the marketplace and see some wisdom in it. When gold was languishing in comparison to the US Dollar through the 1980s and 90s, the rational explanation was that people no longer felt it was a safe haven. Now, conspiracy minded Libertarians such as myself felt that there was a greater conspiracy at work on the part of the powers that be to get people to believe in the US Dollar as the ultimate safe haven rather than gold. There are certain strange coincidences, such as the decline of the spot price of gold in the wake of most major political news (such as the start of Desert Storm or 9/11) which would be occasions where you would thing it would go up.
Continue reading US Treasury Bonds Soar on the News of Their Own Downgrade?

Stock Alert: Time to Shove All-In on Barrick Gold

The Stock Market is full of strangely priced equities. The things that most often make the news are the stocks that are trading far above any rational price. With most banks offering interest rates on savings far less than the government’s own rate of inflation (with a “real” return of -4% or so) you would think that hot money would be flooding into the stock market in search of bargains. So stocks like Barrick Gold (ticker symbol: ABX) and the other gold miners has been an ever increasing mystery to me.
Continue reading Stock Alert: Time to Shove All-In on Barrick Gold

Paul Krugman: Raving Socialist Moron of the Day

If a Socialist raves in the woods, but there’s no one around to hear it, should the forest creatures still seek to dismantle their private enterprise activities in order to develop a strong public sector? Or, put another way, Kevin sent me another Krugman diatribe. Here he is decrying the debt limit “crisis.”

Krugman’s rantings are rather formulaic. As he is Keynesian Socialist, you know exactly where he stands on all issues before he even opens his mouth. In fact, I’d say you can make you own Krugman rants by simply mixing and matching the following arguments:

  • The free market is an unstable system that will tear itself apart without strong government intervention
  • Depression is the logical result of an unregulated free market, and the private sector could never get out of a depression on it’s own.
  • Instead, the government must spend money counter cyclically to “stimulate” the economy
  • Private enterprise harkens back to our more primitive natures when it was a dog-eat-dog and we had to fight each other over scare resources. Bureaucratic action tends to be far superior because it is arrived as through consensus and often developed with the benefit of more enlightened minds like… well, him!

That last point is not really overtly stated as implied. But keep in mind, he’s got an Economic prize issued in Memorial of Alfred Nobel. As I’ve said in a prior post, Mr. Krugman has been the recipient of a funny kind of prize. Suffice it to say that Alfred Nobel never established a Nobel prize for Economics.

At any rate, let’s check Krugman’s latest rant and see how we did here. Hmm, well this one’s about how the terrible Republicans have sabotaged the Democratic process by demanding the government spend less money. With all the Republican bashing, I guess we can safely establish that Krugman is a Democrat. Oh wait, I already said that. See earlier where I said he was a Socialist. Continue reading Paul Krugman: Raving Socialist Moron of the Day