Thursday, December 31, 2009

McAlavany Weekly Commentary, Dec 30, 2009

2009: The Year in Review Part 1

December 30th, 2009

Below is a list of the guests from the current show.
To listen to their entire interview, click on the link beside their name.

• An Interview With Marc Faber » Listen
• An Interview With Alan Abelson: Barrons Market Commentator for 57 Years » Listen
• Meltdown: An Interview With Thomas Woods Jr. » Listen
• An Interview with John Embry » Listen
• Hernando de Soto: Second Interview » Listen
• An Interview with Ambrose Evans-Pritchard » Listen
• An Interview With George Friedman of Stratfor Intelligence Service » Listen
• Bert Dohmen: Deflation Today, Hyperinflation Tomorrow » Listen

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Top 1 Percent Control 42 Percent of Financial Wealth in the U.S.

Many Americans are not buying the recent stock market rally. This is being reflected in multiple polls showing negative attitudes towards the economy and Wall Street. Wall Street is so disconnected from the average American that they fail to see the 27 million unemployed and underemployed Americans that now have a harder time believing the gospel of financial engineering prosperity. Americans have a reason to be dubious regarding the recovery because jobs are the main push for most Americans. A recent study shows that over 70 percent of Americans derive their monthly income from an actual W-2 job. In other words, working is the prime mover and source of their income. Yet the financial elite have very little understanding of this concept. Why? 42 percent of financial wealth is controlled by the top 1 percent. We would need to go back to the Great Depression to see such lopsided data.

Many Americans are still struggling at the depths of this recession. We have 37 million Americans on food stamps and many wait until midnight of the last day of the month so checks can clear to buy food at Wal-Mart. Do you think these people are starring at the stock market? The overall data is much worse: (more)

Money Managers: U.S. Debt Is Giant Ponzi Scheme

Eric Sprott and David Franklin, of Sprott Asset Management, say that government debt issuance is turning into an investment scam.

“Our concern is that this is all starting to resemble one giant Ponzi scheme,” the two write in a report to customers.

They note that the Federal Reserve bought $286 billion, or 15 percent, of the new Treasurys issued in fiscal 2009.

“We are now in a situation . . . where the Fed is printing dollars to buy Treasurys as a means of faking the Treasury’s ability to attract outside capital,” Sprott and Franklin write.

Meanwhile, buyers the Fed calls “The Household Sector” purchased $528 billion of Treasurys in the first three quarters of fiscal 2009. (more)

Chinese firm says won't pay Goldman on options losses

Goldman Sachs (GS.N) was one of the foreign banks, along with Citigroup (C.N), Merrill Lynch and Morgan Stanley (MS.N), blamed by the state assets watchdog for providing "extremely complicated" and difficult to understand derivatives products. [ID:nPEK242617]

Shenzhen Nanshan Power (000037.SZ) (200037.SZ) said in a statement that it received several notices from J. Aron & Company, a trading subsidiary of Goldman Sachs (GS.N), for at least $79.96 million as compensation for terminating oil option contracts.

"We will not accept the demand by J. Aron for all the losses and related interests," said Nanshan, in line with the stance it took last December. (more)

BNN Squeeze Play- Long Term Bear Market?

click here to watch

HuffPost says, "Move your money"

The folks at The Huffington Post have come up with a simple, novel idea that might help right some of the wrongs of the last year, a year that has seen Wall Street faring much better than Main Street since the economy hit bottom over the summer - move your money from a big bank to a small community bank. The video below was produced to help make their point.

Having just watched It's a Wonderful Life again last week, this message rings true - today, the big banks are a big part of our nation's problems and you can't count on Congress to fix this on their own. Go to to learn more.

Decade’s Worst Funds Never Recovered From Technology-Stock Bust

U.S. stock mutual funds with the biggest losses in the past 10 years, a list topped by Fidelity Growth Strategies and Vanguard U.S. Growth, were crushed by the market sell-off at the start of the decade and never recovered.

The Fidelity fund fell 67 percent and Vanguard’s lost 50 percent, according to data from Morningstar Inc. The 10 worst- performing diversified funds that still manage at least $1 billion tumbled an average of 43 percent in the decade through Dec. 28, about five times the decline of the Standard & Poor’s 500 Index, a benchmark for the biggest U.S. stocks.

The group’s performance underscores the lasting damage from the March 2000 to October 2002 bear market that followed the collapse of Internet stocks. Fidelity Growth Strategies, which oversees $1.93 billion, hadn’t recouped the 86 percent loss incurred during the technology bust when stocks started falling again in October 2007 amid the onset of the housing crisis. (more)

Peter Schiff On Liberty Fannie & Freddie, Fed and Housing

An Introspective Look at the Future of America

As we close out 2009 and look forward into 2010 and beyond, this has been a year of near financial catastrophe and monumental change, none of which benefited America or ordinary Americans. Late in 2008 and throughout 2009, events have happened in the US which would have been labeled unfathomable just a few short years ago, and yet already these monumental changes are expected to be filed into the memory hole and Americans are expected to believe nothing has changed.

As we exit the year, we are told the US is a laissez-faire free market economy and yet the US government is now the largest owner of housing in the US as well as the owner of last resort for some of the largest and completely insolvent US corporations. The Federal Reserve, a privately and anonymously owned and controlled corporation chartered with issuing the nations currency, were given the green light by themselves to transfer to themselves and their shareholders the people's wealth in the form of their future labor. The FED balance sheet has ballooned to become a junk bond warehouse as they overtly and covertly buy their own debt, immune from any sort of oversight, regulation or auditing and operating above the law. Along with that, increasingly coercive brute force measures are now routinely necessary to manage and manipulate so called "free market" asset prices which are cheerled by so called "financial news media" whose board members and management are all the same people who transferred the people's wealth to themselves. The corporate media party line idea of a "free market US economy" now seems like a distant memory and it all feels like systemic fraud, corruption, malfeasance and organized crime at the very highest levels. (more)