Funny Satire

NORFOLK, VIRGINIA (The Borowitz Report) – Eleven indicted Somali pirates dropped a bombshell in a U.S. court today, revealing that their entire piracy operation is a subsidiary of banking giant Goldman Sachs.

There was an audible gasp in the courtroom when the leader of the pirates announced, “We are doing God’s work. We work for Lloyd Blankfein.”

The pirate, who said he earned a bonus of $48 million in dubloons last year, elaborated on the nature of the Somalis’ work for Goldman, explaining that the pirates forcibly attacked ships that Goldman had already shorted.

“We were functioning as investment bankers, only every day was casual Friday,” the pirate said.

The pirate acknowledged that they merged their operations with Goldman in late 2008 to take advantage of the more relaxed regulations governing bankers as opposed to pirates, “plus to get our share of the bailout money.”

In the aftermath of the shocking revelations, government prosecutors were scrambling to see if they still had a case against the Somali pirates, who would now be treated as bankers in the eyes of the law.

“There are lots of laws that could bring these guys down if they were, in fact, pirates,” one government source said. “But if they’re bankers, our hands are tied.”

Where is the bottom?

I get the question all the time. “When will the bear market bottom out” To help answer this we look to history (as always).
This is a picture of historical P/E’s. As you will note the two previous bear markets in ’29-’40 and ’66-’82 the P/E ratio bottomed out at around 5. The lowest being in 1920. Going by this we can expect the market to drop another 75% Why? We are at a P/E of around 20 now. So to get to 5 p/e we need a drop of 75%
Having come off the greatest bull ever with an astounding p/e/ of 44, we can expect much pain and it would not surprise me to see us set a new low p/e.

401 k's at risk

So the headline I read stated. The gov is contemplating forcing some sort of annuity for your 401 k. seems too many lost large sums therefore are not smart enough to manage their affairs. While I agree that most have no clue and rely on the same pious hucksters for their advice, the real issue (in my opinion) is that annuities are in general insurance companies buying treasuries and keeping them in a pool for annuity buyers.

It is no secret that foreign buying of our debt is in a free fall and domestic buyers are drying up as well, forcing 401k's to buy annuities will have more capital to buy the nations debt.

Call it a conspiracy, but reality is that there is not enough floating capital to buy the debt we have at auctions now. the banks are already borrowing from the feds at .25% and buying treasuries. (hence no lending, why should they) stay with me here. We all know (at least you should) that the banks leverage every dollar to 10 so the 2.75% off of the borrow/buy fed scam, it equates to 27%. Good work if you can get it.

The insanity keeps coming: SHORT TREASURIES it will be difficult to raise capital at the auctions unless the rates start up.

Later