A swarm of customers at the headquarters of Kabul Bank in the Afghan capital on Wednesday raised the prospect of a full-scale bank run that would further alienate dispirited Afghans from their government and imperil American efforts to contain the insurgency.
On Thursday morning, scores of Afghans again flooded the Kabul Bank offices to withdraw their savings. The scene was crowded but orderly. At one branch, where government employees were trying to cash their paychecks, the bank staff declared a limit of $1,000 per customer…
The tumult in Kabul suggested that a decision by the Central Bank to purge the management of Kabul Bank and rein in its freewheeling ways – which included disastrous property speculation in Dubai – could backfire and set off the very crisis officials hoped to avoid. Karzai’s brother Mahmoud, who used to run an Afghan restaurant in Maryland, owns 7 percent of Kabul Bank.
As depositors thronged branches of Afghanistan’s biggest bank, Mahmoud Karzai, the brother of the Afghan president and a major shareholder in the beleaguered Kabul Bank, called Thursday for intervention by the United States to head off a financial meltdown…
Banks had shorter hours Thursday due to Ramadan, the Islamic holy month, and Friday is a holiday, which will give authorities some respite and could help calm public alarm.
ICI reports we have just recorded the 17th consecutive weekly outflow from domestic equity mutual funds, and what’s worse for mutual funds’ depleted liquidity ratios, it is now accelerating, hitting a total of $4.3 billion, a more than 50% increase from last week’s $2.7 billion. YTD outflows have now hit $54 billion, as ever more capital is going into far safer fixed income instruments.
From bada boom in the comments on yesterday’s rise in the Dow:
I believe this was also an attempt to reverse the flow of retail out the market.
From the inimitable Turd Ferguson in the comments:
No, wait. I just heard two douchebags on CNBS say this was a terrific contrarian indicator. Investor bearishness lowest since Feb 2009. The perfect sign that the market was headed much higher. One of the douchebags said the S&P would trade through 1500 in 2012.
What these pricks don’t understand is that the jig is up. Their game is over. The “hoi polloi” is onto them and they are no longer willing to entrust them with what remains of their hard-earned dollars.
I think they are just trying to keep the basis up so when tomorrows number sucks wind and there is a sell off it doesn’t blow through 1040 like a hot knife through butter causing a fast and ferocious move to the downside. They all know it’s coming — they are just thinking they can soften the blow. If the job number was going to be ok to bullish do you really think Christina Roemer would have had her last day be yesterday? She would have stayed through the week to take credit for the great recovery.
Here’s how the numbers break down: total actively-managed mutual funds, both domestic and international, saw a net outflow of $37.7 billion in 2009, and of $24.1 billion in the first seven months of 2010. Meanwhile, passively-managed index funds saw a net inflow of $22.9 billion in 2009, and of $22.4 billion in 2010 so far. But get this: equity ETFs saw net inflows of $69.3 billion in 2009, and another $21.4 billion in 2010 to date.
Those numbers aren’t publicized by the ICI: I had to calculate them using their spreadsheet of monthly ETF data. But if you add it all together, there was a net inflow into equities of $60.5 billion in 2009, and another net inflow of $19.8 billion in the first seven months of 2010. People aren’t pulling their money out of the stock market, they’re just pulling their money out of actively-manged mutual funds in general, and actively-managed domestic mutual funds in particular…
So in terms of long-term investments, people are still massively overweight actively-managed strategies. But they’re sensibly rotating out of those funds, and into passive ETFs. As that trend continues, and I see no indication of it slowing down at all, one can only expect that correlations between different stocks will continue to rise. And as correlations rise, of course, it becomes increasingly difficult to justify an active strategy.
From TFF in the comments:
I suspect there are a small number of professionals who have the insight and discernment to consistently beat the market, however their rewards are far greater working at an investment desk or hedge fund than running a mutual fund. This is especially true because mutual fund investors punish a fund that underperforms its peers far more than they reward one that overperforms. The safest and most lucrative path is to simply track the market with 90% of the portfolio and play small games with the remaining 10%.
The move to ETFs may partly stem from a disillusionment with mediocre money managers, but it also permits active investors greater control in managing their money. If they issue a sell at 10:00 it gets executed at 10:01, instead of six hours (and 600 points drop) later. Finally, the fee structure and freedom from account minimums are attractive.
Quant managers need to understand “that financial markets are better understood through the lenses of a biologist rather than a physicist,” says Andrew Lo, a finance professor at the Massachusetts Institute of Technology who also manages quant funds. That is, they need to focus on the adaptation to changing environments that characterizes the biological realm, rather than the sort of immutable laws that form the foundation of physics. While quant managers might like to think that three laws govern 99% of investor behavior and thereby drive securities prices, he says, “we’re lucky” if 99 laws explain even 3% of investor behavior…
Westpeak ActiveBeta Equity, launched in late July, chooses its investments by ranking each stock in the Standard & Poor’s 500-stock index by three value factors (price-to-cash-flow, price-to-sales and price-to-book-value ratios) and one momentum factor (12-month return).
The fund rebalances its holdings every month, and its allocations to individual stocks can differ only moderately from their weightings in the index.
“Investors know exactly what they’re buying,” says Khalid Ghayur, co-manager of the fund.
Since the beginning of 2008, stock mutual funds have suffered cash outflows totaling roughly $245 billion. In contrast, bond mutual funds have enjoyed inflows of close to $616 billion, according to data from the Investment Company Institute, a mutual fund industry trade group. Similarly, prior to the financial meltdown two years ago, 401(k) investors had seven of every 10 dollars of their retirement money invested in stocks, but that is back below 60%, according to Hewitt Associates.
To overtly purchase RE/CMBS/Stocks would probably force the Fed to induce the “exigent circumstances” clause, especially if Agency debt isn’t involved. While the Fed has already tested the legal bounds through the Agency purchases (don’t worry, they have government backing), they would be stretching their legal authority way over the line by owning stocks.
Michael Pento appearently doesn’t understand the covert role of primary dealers, and apparently who is operationally involved in the Working Group. As others have stated, the Fed is already endorsing the purchase of CRE and stocks. And I’m pretty sure those marching orders are coming directly out of a musty corner office at 33 Liberty. Bill Dudley… where art thou?
As for the overt purchases of Treasuries, the Fed already has its hands pretty full– and it WILL expand. Their central priorities are to: (a) ensure that the Treasury can meet all of its financial obligations; (b) minimize the cost of debt issuance for such obligations; and (c) push the principal as far out on the curve as entirely possible. As long as deficit spending is the norm, and China is out of the market buying Treasury debt, the Fed will be a major player here. Clearly, this is one area where “whatever it takes” does apply.
In the end, investors worldwide should be trashing the USD– and remarkably, they are not. The policies of monetizing debt and covering up the stench of the financial system are certainly well known. I just don’t think it’s sinking in that the Fed is choosing to strategically default by debasing its own currency. Well, except in China… they know full well the U.S. can’t possibly pay back all of its debt obligations, and are acting accordingly.
The next move to expand the Fed’s balance sheet via QE — whether it’s $1 trillion or $5 trillion– SHOULD be countered by currency dumping USD in the international markets. Domestically, people SHOULD rightly question the faith in their currency when a policy of strategic default though currency debasement is the central strategy. But it hasn’t happened yet… and it may not for quite some time. We can thank Greece… and most likely now, Hungary… for the temporary international diversion.
1. Banks which own the Fed printing press and chequing accounts.
2. The sleigh of hand which allows fiat money to be thought of as real.
3. A congress which gets bought-off, and expects it.
4. Banks which are too big to fail, and aren’t allowed to because they control/own #1, #3 & #5 in this list.
5. An election system which is more like sticking an employee in the White House.
Every one of these five will need to be liquidated in order to restore balance. Any one of them, in time, will restore the entire group in some shape or form.
In regards to the Fed consisting of “member banks”, which are “non-voting”; true, but have you ever pondered that the non-voting element might imply that there is already a control structure in place, therefore negating the need for operation input from the other 11 or so Fed centres and banks. This is like a silent investor. So who’s the franchise owner? There is an owner, you can bet on it.
The last list of member banks I saw had 3-4 banks which were originally set-up by JP Morgan…and his grandfather was given his money from the ‘House of Peabody’ (become Peabody & Morgan)…further back, and Peabody was a actually a non-disclosed trading house agent of the ‘House of Rothschild’. So 3-4, perhaps more, of the member banks, have always been agents for the Rothschilds. This is no secret, but it has always been down-played, and agents allow anonymity and conspiracy to mask or allow the average Joe to dismiss concealed intent.
Who controls the Fed…who stands to clean-sweep stocks and real estate across America (and maybe Europe later) as the Fed commences buying-up all the distressed real assets with nothing but ones and zeros in a big banks chequing account…who do you think?!
The very same family which clean sweeped the entire debt of Europe after the battle of Waterloo!
Unlike the real H.O. observation (which incidentally has now been experienced 5 times in the past three weeks) for stocks, the one relevant for sovereign bankruptcy has a much simpler gating threshold: 1,000 bps spread in credit risk. And just like in the Hindenburg Omen, this is a necessary (but not sufficient) condition for a crash: only in this case it is not the market that collapses, but a country’s solvency.
The IMF is the same crew of mental cases that sell gold bullion, just to go throw the the proceeding fiat onto the same pile that they got for nothing from banana ben the day before.
In 2008, I was hired by PTP to create a team of educators from the region’s colleges and universities to make an interactive training module for surgical technicians. That is, we were going to make a computer game, an otherwise expensive exercise no single institution could afford.
I knew what I was getting into. One teammate described my job as “herding cats.” A business colleague later confessed PTP would have had to pay her triple to do my job because it looked like “Mission: Impossible” through most of it. By the project’s end we had solid, notable successes and some mixed results — not enough to declare victory and start a game industry here in the Piedmont, a dubious PTP ambition, but more than enough to show what we needed to do if the region was serious about attracting and developing businesses that used high-tech skills like those found in the game industry. And more than enough to show what teachers needed to know to be more effective in the classroom.
I have searched in vain for Debbage and Bencinis’ articles. Perhaps I am mistaken.
Some local leaders blame the area’s poor showing, at least in part, on a redrawing of the nation’s metro areas early in the decade.
At that time, Guilford found itself separated from Forsyth County and joined with Rockingham and Randolph, two counties that have seen their unemployment rates soar past 15 percent and 12 percent respectively during the recession.
“Right now, we are half an apple,” said Keith Debbage, a professor of urban geography at UNCG. “No offense to our friends to the north and south, but we are stuck with Rockingham and Randolph.”
While I wait to be corrected, here is some of what Debbage had to say:
Not too long ago, I invited a senior staff member of the N.C. Department of Commerce to give a talk to my graduate class at UNCG. One of my students asked the state official to rank the Triad relative to the state’s other economic regions. His response: The Triad was without doubt the most dysfunctional region in the state, particularly regarding its inability to work together for the common good.
From Bencini:
And if Greensboro – which has an airport; is the largest city in the 36th-largest metro area in America; has a coliseum that routinely attracts big-time acts and sports; is home of the International Civil Rights Center & Museum and the historic 1960 sit-ins; is host city of a PGA tournament; and is home to five colleges and universities and a lawschool – can’t get enough name recognition to move the meter, how in the world can a blandly titled region have a chance in this world of gaining meaningful attention?
It’s not just that 46 percent of Republicans believe the lie that Obama is a Muslim, or that 27 percent in the party doubt that the president of the United States is a citizen. But fully half of them believe falsely that the big bailout of banks and insurance companies under TARP was enacted by Obama, and not by President Bush…
A few quick examples of the Limbaugh method:
“Tomorrow is Obama’s birthday — not that we’ve seen any proof of that,” he said on Aug. 3. “They tell us Aug. 4 is the birthday; we haven’t seen any proof of that…”
On the Muslim deception, Limbaugh has sprinkled lie dust all over the place. “Obama says he’s a Christian, but where’s the evidence?” he said on Aug. 19. He has repeatedly called the president “imam Obama,” and said, “I’m just throwing things out there, folks, because people are questioning his Christianity…”
Finally, there is Fox News, whose parent company has given $1 million to Republican causes this year but still masquerades as a legitimate source of news. Their chat and opinion programs spread innuendo daily. The founder of Politifact, another nonpartisan referee to the daily rumble, said two of the site’s five most popular items on its Truth-o-meter are corrections of Glenn Beck.
h/t to Abner Doon. I used to run a lot more troll bait.
But since Roger (Mr. Fair and Balanced) Ailes and Lee Atwater developed their scorched-earth-no-lie-is-too big policy for getting Republicans like George H.W. Bush elected, the GOP has succumbed to the allure of the lie. It’s custom made for incurious, petulant, intellectually challenged types such as Bush 43, Sarah Palin, John Boehner, Limbaugh, Beck, Hannity, O’Reilly, and Coulter. No need for research, no need to read, to think carefully. Decide on the outcome you want and make up whatever you need to get you there.
Commenter Lynn quotes Kennedy (the POTUS and not the VJ):
The great enemy of the truth is very often not the lie — deliberate, contrived and dishonest, but the myth, persistent, persuasive, and unrealistic. Belief in myths allows the comfort of opinion without the discomfort of thought.
With the benefit of hindsight, it seems that the rot really started in 1980, when the Reagan campaign made a conscious effort to recruit the nascent religious right as a GOP voting bloc. This involved the kind of compromise that everyone condemns but that all politicians practice.
As with so many things that turn out badly, it seemed like a good idea at the time. It would scarcely have seemed possible that a bunch of Bible beating nuts could actually take over the party of Teddy Roosevelt, Nelson Rockefeller, and Barry Goldwater. They could help us at the polls, though, and with grassroots activism (a traditional weakness of the GOP), so compromise we did.
Our creation has devoured us now, and Republican conservatism as I knew it has not so much changed as ceased to exist. This process has accelerated with astonishing speed since the 2008 election, with the nuts now fully in charge and the adults either marginalized or driven completely out of the party.
I persisted as long as I did because I thought the nuts would fall flat on their faces and the rest of us could re-build the movement along rational lines. That is impossible now, we are past the point of no return.
“These decisions expand and reinforce the IMF’s crisis-prevention toolkit and mark an important step in our ongoing work with our membership to strengthen the global financial safety net. The enhanced Flexible Credit Line and new Precautionary Credit Line will enable the Fund to help its members protect themselves against excessive market volatility,” said IMF Managing Director Dominique Strauss-Kahn. What DSK did not mention is that it is precisely the mechanisms used by the Central Banking Cartel to rise the markets ever higher in light of increasingly deteriorating fundamentals, that are precisely what makes the markets excessively volatile, primary culprit of course being HFT, which is nothing but a government endorsed positive feedback loop…
So as the world drowns under trillions of excess debt, the IMF’s solution is to throw quadrillions (or, technically, “as much as necessary”) of new debt at the problem.
Good on them. I was sorta hoping the dollar would outlive the Euro by a few months, but all the fiat currencies have to die someday I guess. It’s not like we are going to pay it back, it just further rockets us to publicly acknowledged insolvency. Can’t wait till the IMF has to borrow from the US, to bail out the US.
One month after its release, he told an interviewer, “I couldn’t stand to listen to it. I thought it was the worst piece of garbage I’d ever heard…”
Personally, Springsteen was cracking up. Staying at a Holiday Inn on Manhattan’s West Side with a girlfriend, she would ask every day if the record was finished, and he would suppress tears — or, occasionally, shed them — in saying that it wasn’t…
when Springsteen received the test pressings, he not only rejected them, he threw them into a swimming pool. He was so unhappy that he considered scrapping the album entirely and starting over.
Springsteen had been inspired to take up music at the age of seven after seeing Elvis Presley on The Ed Sullivan Show. At 13, he bought his first guitar for $18; later, his mother took out a loan to buy the 16-year-old Springsteen a $60 Kent guitar, as he later memorialized in his song “The Wish”.
I once owned a Kent guitar and amp, but by high school had traded up to a blonde Don Miller copy of a Gibson SG and a Fender Vibrolux Reverb.
I have refrained from titling this post with another variant of “porn” after receiving excellent advice that frequent use might cause this ancient and venerable blog to become blacklisted.
My first memory was of a boobie. My second was of my mother’s face, with a cigarette hanging from her lips. Strangely, I’ve always loved to look at boobies, but never had any use for cigs. When I can’t find boobies to look at, I am awfully fond of looking at ham.
Boobies are among a class of internet content including pornography, which is broadly considered objectionable. I consign Glenn Beck to this area, whereas boobies are just fine with me. Likewise, I am offended by the unhinged attacks of The Evil Dr. Guarino against city staff, the local media and area churches.
It is obvious that what is considered objectionable is entirely subjective. If we consider the great masters of art in history, boobies and giblets were considered natural and there seems to have been little religious objection. Indeed, were The Evil Dr. Guarino to honestly argue the merits of a student accessing the Statue of David at the public library, he would be in agreement. But as with all his arguments, the demented doctor covets other base motives having little to do with the subject at hand.
No, Guarino and his band of neanderthals are using the issue of library porn to paint the opposition as immoral. Worse, the racist carpetbagger has attacked a veteran employee of the public library over slights occurring years ago. That discredited bomb thrower, Jerry Bledsoe, has them carrying his water.
The opposition, like me, is calling Guarino out on their blogs, and rightly so. But let us make this important distinction: it is not because of disagreement of library policy, but the manner in which Joe goes about making his argument.
Greensboro conservatives deserve a more articulate leader than dumb old Joe. The man doesn’t know the meaning of “nuance.” He’s never had a bad idea that didn’t get posted. In short, he’s a menace running amok. In all the years Blogsboro has existed, no one else has exhibited the extreme bad judgment to attack elected officials and local media persons for the churches they choose to attend.
We get that Tea Party conservatives are angry. We understand that pornography is a core issue. Our local progressives argue their positions with fact, logic and reason. The torch and pitchfork crowd respond from the supposed moral high ground with outrage. The fact remains that so long as Guilford County conservatives hide behind lunatics such as The Evil Dr. Guarino and his trolls, their arguments will never be made effectively, and their interests never served as a consequence.
Let me put it more plainly. So long as Joe Guarino leads the argument, Guilford County conservatives are dead-enders, politically.
I am totally shredded. The Wife and her mom drove down to Atlanta and ordered more clothes. As they say, “You can’t sell ‘em if you ain’t got ‘em.” Therefore, endeavoring to stay out of trouble, I spent the weekend in the yard. Saturday, I drained the hot tub, cleaned and re-filled it. I found no red wasp nests, but I did see one nosing around.
The zucchini are done, but we continue to get cucumbers and tomatoes. The upside down tomato vines lost their impediments to gravity and fell to the ground. It’s a stupid notion. I currently have a cantaloupe and a honeydew growing on scaffolds. The first watermelon rotted, as did a cantaloupe.
My mom gave us a little garden fountain, which I finally set up against the house beside the planter I’d recently built. The Wife wants a lilly pond with Koi and a waterfall. This is a start.
Yesterday, I dropped by HD and picked up a big yellow mum for $5. I got some mulch and plant food. I wanted some Cutter for the back yard, but they were out, so I tried the “natural” version.
OMFG! I didn’t realize until too late that this stuff stinks to high heaven. I think at least two of the neighbors called in reports of a gas leak. Not only do we not have mosquitoes, there are no birds or squirrels. It’s like Rachel Carson‘s Silent Spring in the backyard right now. Hell, I think we’re even missing a cat. Hopefully, it will dissipate soon.
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