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Petróleo Brasileiro S.A. - Petrobra Message Board

  • musketeernumberone musketeernumberone Nov 18, 2010 5:59 AM Flag

    Jim Chanos and the Attack on the Fed

    One of our pre-eminent bears, short-side investor Jim Chanos, signed the recent open letter to the Fed suggesting that it bail on QE2. Is there any clearer indication of what is good for the economy?

    Seriously, from what I have seen on TV, I like Jim Chanos. I think he is a smart guy. And I think what he does for a living serves a purpose. But I am not so foolish as to think that his interests as a short coincide with my, mostly long, position... nor with the needs and aspirations of the working stiffs of the USA.

    The other signers of this letter were mostly Republicans, business economists and academics, who clearly do not mind allowing the economy to choke and sputter for another 2 years of do-nothing obstructionism.

    But what really worries me is that, with its independence under attack, the Fed now has to waste its time playing politics. An independent Central Bank is a cornerstone of a modern, functional, democratic-capitalist economy. This is not Argentina, is it?

    Can you imagine Sara Palin winning the Presidency and having her pull the strings on the economy? She can*t even manage the door to her daughter*s bed-room.

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    • just for the record.

      <<1. Dollar is WAAAAY undervalued.
      <<Real are WAAAAY overvalued.>>

      3. Commodities, particularly oil, are way overvalued.

      4. Emerging markets are way overvalued.>>

      <<5. World expansion is still due for a pullback.>>

      So you're calling for global recession and shrinking of global GDP?

    • and it is hard to see shades of gray.

      <Non sequiter time again for docjoe (your specialty...one of them anyway). Contradicting yourself is another.>

      Like Crash Davis in Bull Durham I have to explain what I believe, "I believe there oughta be a constitutional amendment outlawing Astroturf and the designated hitter. I believe in the sweet spot, soft-core pornography, opening your presents Christmas morning rather than Christmas Eve, and I believe in long, slow, deep, soft, wet kisses that last three days."

      1. Dollar is WAAAAY undervalued.
      2. Euro and Real are WAAAAY overvalued.
      3. Commodities, particularly oil, are way overvalued.
      4. Emerging markets are way overvalued.

      Add up one through four, and you can see why PBR is a long term sell.

      5. World expansion is still due for a pullback. Consumer demand should drive supply not cheap money, i.e. expanding money supply.

      6. Because of reason 5, China, Canada, and Australia have housing bubbles, and the popping of these bubbles is going to be devastating.

      7. With the exception of small emerging markets small caps, putting money into growth companies for the most part is a sucker's bet.

      8. Dollar will remain the reserve currency for at least 20 years.

      9. In 20 years or less, the Euro in its current form will be no more.

      10. Dow will remain at 10,000 and NASDAQ at 2,000 for the next ten years.

      11. Just like in the last decade, bonds will outperform stocks in this one.

      12. The only money to be made in this market then will be with trading.

      Because of #12, there may be times I go short the dollar or long oil for a brief period. Because of their black and white type brain rigidity, there is no doubt that Ilap and his ilk will call me a hypocrite if I do so.

    • Worse yet, can you imagine Obama being re-elected????!!!!

    • i liked the Argentinian comment, but unfortunatly i think many of the actions taken remind me of the beggining (not the end)of the crisis i went through here.. The only difference is that everyone believes in America and it;s promises. IMO the debt is ridiculous and unpayable but so is greece, ireland , portugal ,spain ect. It took ten years here..

      Who can control the door to any child's treasure these days..
      I am republican even though i do not vote obviously , and i agree she doesn't have what it takes, not even close. But she is not a bad example as a mother.She will not be on the tickect as president anyway.. I will give you my call on that soon. THey call me Pulpo pat here but only soccer fans would understand that. I'm pretty good at getting outcomes right,,,besides stocks of course,,lol.

      • 1 Reply to arwen_imaginary
      • It's not that these people don't know any better, it's because the agenda is not always about what's best for the country. Too many conflicts of interests and friends being looked after. JMO

        “Some intriguing research in the contrary vein is worth considering,” writes James Grant, taking the baton from his colleague. “‘A Decade Lost and Found: Mexico and Chile in the 1980s,’ by Raphael Bergoeing, Patrick J. Kehoe et al., published in 2002, might serve as a parable for these interventionist times. The paper contrasts the response of Mexico and Chile to the seemingly intractable difficulties each faced in the 1980s.

        “Despite a similar starting point, the authors write, ‘Chile returned to trend in about a decade and since then has grown even faster than trend. In contrast, output in Mexico has never fully recovered, and even two decades later is still 30% below trend.’

        “The difference? Chile let companies fail and markets clear. Mexico, anticipating certain features of the contemporary United States, allowed its archaic bankruptcy system to perpetuate the lives of money-losing businesses and allocated credit by government directive.

        “The sharp recession that Chile suffered in consequence of its seemingly harsh policies,” Grant continues, “merely proved the preface to a superb recovery. In comparative terms, Mexico stagnated. Washington, DC, please copy.”



        Read more: Quantitative Easing and the Importance of Job Growth http://dailyreckoning.com/quantitative-easing-and-the-importance-of-job-growth/#ixzz168fB074P

    • *HC legislation* -- my understanding, admittedly from afar, is that this legislation provides/requires healthcare for a huge proportion of the population that has gone un-insured, and restricts the excesses of the insurance industry. Both a net positive.

      *Elections are meaningless* -- Wins I mean this sincerely: It is a shame you feel this way considering the thousands and millions who have died seeking and defending this small privilege which is so fundamental to the western way of life. Maybe you should consider spending some time as a community or political organizer... you could end up feeling empowered by the experience...

      *The country needs to do some things that ensure that the politicians are working for the people* -- Yes. The first step is electing the right people, with the right values and the right political philosophy.* (see below) Term limits make some sense but the cost is ending up with politicians who know nothing about governing. Closing the revolving door between government and industry would be good, but impractical in a *free* country.

      What is *the right political philosophy*? IMHO this means

      - centrism,
      - balance between labor, capital and government,
      - checks and balances,
      - applying human intelligence to human problems,
      - majority rule and respect for minorities,
      - freedom, but not the freedom to abuse the privileges of wealth and power
      - respect

    • <<We defer to their wisdom, experience and expertise.. and these guys can*t even get accurate documentation of the loans they write.>>

      Yes.

      And if you would look at the process that was used to pass HC legislation, that alone should make you wonder how accountable the US govt has become to the people.

      The lack of transparency might be OK if we trusted the people in power but given what we've seen over the last number of years, I fail to see how you might see how that trust is earned.

      <<You and I run the show, not the bankers>>

      If you say so. I sure don't see it that way.

      Elections are meaningless.

      Lobbyists ensure legislation gets done their way.

      doesn't matter who's in power just a slightly different group with influence but the bankers are always in the front row.

      As an aside some good arguments here as to why QE won't work.

      http://dailyreckoning.com/band-aid-solutions/


      As to the solution politically?

      The country needs to do some things that ensure that the politicians are working for the people, not lobbyist interests.

      term limits might help but there also needs to be severe consequences for politicians that are caught doing the work of special interests.

      To know that so much legislation gets passed without being read (much less properly debated) is a huge hole that needs filling and unless you have 100% faith in those writing the legislation, it's crazy to allow this sort of governance to continue no matter which party occupies the WH.

      Standards of governance are getting worse and it's not an accident that legislation lacks coherence (and consistency)simply because legislation is not what is always best for the country but instead is more about catering to what the special interests want.

    • Chanos is a fool who took the wrong trade and now whats Gov't intervetion to save him from his massive losses. Shorting china? Come on Jim...

    • You and I run the show, not the bankers. We have ceded power to their lobbyists and politicians by accepting the illusion that what is good for them is good for us, too. We defer to their wisdom, experience and expertise.. and these guys can*t even get accurate documentation of the loans they write.

      As for Democrat vs. Republican: This idea that they *are all the same* is part of the problem. They are not all the same. Which is not to say that any of them are any good. LOL

      Some differences...

      DEMOCRAT REPUBLICAN

      Barack Obama G.W. Bush
      Hillary Clinton Sarah Palin
      Unions Oil Companies
      Tax the wealthy Tax breaks for the wealthy
      Regulate Look the other way, Blame the victim
      Do Something Do Nothing
      Pro-Choice Pro-Life
      Gays Closeted Gays
      Inclusivity Exclusivity
      Look Forward Look Back
      Jon Stewart Rush Limbaugh
      George Clooney Charlton Heston

      See some differences?

    • << This is still a democracy and we cannot blame the bankers for the pathetic state of our polity and our economy>>

      Huh? What planet you been on these last few years?

      The bankers run the show.

      Policy always seems to favor them. You think that an accident?

      Sheesh..

      <<There are real and philosophical differences beween Democrats and Republicans. Since LBJ, we have had 28 years of Republican leadership and 16 years of Democratic leadership >>

      If you think a (real) difference in ideology between parties, the party in leadership is not as important as who controls Congress and if I'm not mistaken, the Dems have had control for the majority of the time.

      This has repercussions for both policy and spending.

      If you really think a big difference in the parties in recent history, that's up to you to decide...personally I don't much difference.

      But I wish there was otherwise I might support an ideology of smaller but more effective govt.

      But enough about that.

      Here's some background about the former car czar and what he was a willing to do to get his hands on pension money.

      Any American that thinks their pension money is always invested with their best interests at heart had better think again.

      << The attorney general of New York filed two lawsuits today against Steven Rattner, the Quadrangle Group co-founder and former head of the White House auto-industry bailout team.

      The attorney general says Rattner influenced Quadrangle to pay kickbacks to land $150 million in investment money from the New York State Common Retirement Fund, a pension system
      for the state and many local government employees.

      http://blogs.wsj.com/deals/2010/11/18/explaining-the-charges-against-steven-rattner/


      "Steve Rattner was willing to do whatever it took to get his hands on pension fund money including paying kickbacks, orchestrating a movie deal, and funneling campaign contributions," Cuomo said in a statement. "Through these lawsuits, we will recover his ill gotten gains and hold Rattner accountable."

      http://finance.fortune.cnn.com/2010/11/18/about-time-cuomo-finally-sues-steve-rattner/?section=magazines_fortune

      Rattner and the Pension Kickbacks Probe: In His Own Words

      Financier and former “car czar” Steven Rattner so far has kept mum about plans to settle an SEC investigation into his role in a pension-fund kickback scheme–a deal that grows stranger by the moment

      http://blogs.wsj.com/deals/2010/10/14/rattner-and-the-pension-kickbacks-probe-in-his-own-words/


      Anyone think this is an isolated event?

      with bankers having control of trillions of investors' money and a fiduciry duty to invest it on behalf of citizens, I would be VERY surprised that this isn't a fairly common practice.

      We all know (or should) how much charity money gets misdirected and ends up supporting lavish lifestyles rather than a cause or raison d'etre for a good number of charities.

      My guess is that the misdirection of individual American's money from their retirement accounts in return for kickbacks dwarfs that which is misdirected by charities.

      potential kickbacks for investing in sure-to-fail hairbrained schemes are much more lucrative than trying to earn an honest living and I'd be amazed if this practice wasn't widespread simply because no one polices this sort of thing.

      Heck, a lot of these folks associate with each other socially. JMO.

    • CPX has good market penetration in N.A., especially in the shale plays, helping the E&P co's produce from their wells (frac svcs). HP leases the rigs and personnel that do the drilling for the E&P co's. Both oilfield svcs, but different segments.

      CPX mgt is well respected, led by a CEO with a strong finance (read m&a) background. I can see CPX being a target by one of the big 3 (SLB, HAL, BHI). All speculation, though.

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