Sunday, November 21, 2010

Buy American? (How the hell are we supposed to do that?)

Greetings good citizen,

Your circumstances drive your actions. It is unlikely that you will be seeking ‘investment opportunities’ if you don’t have enough ‘capital’ to fill a thimble…which pretty much describes 97% of us.

However, as tonight’s second offering suggests, could the actions of a ‘few’ blast an irreparable hole in our already foundering economy?

Isn’t one of the key factors of the current crisis due to the ‘consolidation’ of much of the nation’s (as well s the world’s) wealth into the hands of those who need it least?

If we posit that commerce exists to serve the needs of society, a crime of stupendous proportions has been committed.

Worse, the (bought and paid for) US ‘Supreme Court’ invalidated itself by ruling that the ‘primary purpose’ of commerce was to generate profits for its shareowners and nothing else!

This decision, by itself, invalidates the entire purpose of government! (For that alone every one of the justices literally shredded their law degrees, never mind their right to practice law, anywhere!)

Does anyone else find it ‘odd’ that this decision has never been challenged?

If we consider that this, er, ‘judgement’ dovetails nicely with the agenda of our corporate overlords, it’s not surprising at all!

So we arrive at tonight’s first offering where the reporter to a very exclusive section of society ponders a pretty ‘bone-headed’ idea…

Buy American? Upscale Investors Look Abroad
Published: November 19, 2010

Well-heeled American investors have been doing something lately [Excuse me but how does the last four decades translate into ‘lately’?] that they resisted for decades — becoming more like their European, Asian and Latin American counterparts and substantially diversifying their portfolios outside their home country. [Obviously Bobo is referring to ‘small time’ investors…’simple millionaires’ who have, until recently, found ample ‘investment opportunities’ right here in their own back yard.]

Are overseas investments worth the risk? Which ones can be part of the mix for a prudent investor?

There are two reasons for this. The financial crisis and the slow recovery showed them that the United States was not immune to devastating crashes of the kind that wealthy people in emerging markets have tried to hedge against by investing abroad. And second, American investors are worried that their portfolios are going to suffer for the foreseeable future, given the size of the United States’ budget deficit, the weakness of the dollar and the uncertainty over the stock market.

“I’ve never seen a period in which clients have expressed such an interest in nondollar investments,” said Kent Lucken, managing director at Citi Private Bank. “People are spreading their chips around more prudently and I think more wisely.” [Could ‘quantative shredding, er, easing’, the ‘direct dilution’ of the US dollar be behind this sudden ‘rush for the exits’?]

What is different is how directly these investors are going into non-American markets. They are not content with buying international equities or going into an international bond fund. They are looking to invest directly in Chinese private equity, Indian real estate; Brazilian equities denominated in reals and Australian government bonds. They are also opening cash accounts in multiple currencies. [As you can see, the suggestion here is these particular investors aren’t very ‘sophisticated’ because they are only just now getting around to something they should have done years ago….]

“International clients understand the need to diversify currencies, but this is something new to U.S. clients,” said David Frame, global head of alternative investment at J. P. Morgan Private Bank.

The people putting as much as 40 percent of their portfolios into nondollar investments are quite wealthy. But consider it this way: What can investors of more modest means learn from what the wealthiest people in the country — with the best research and advice at their disposal — are doing with large portions of their fortunes? [What about you? If you don’t have a ‘fortune’ does this behavior have an ‘impact’ upon your future? It sure does. As the money ‘flees’ your future employment is likely fleeing with it.]

UPSIDE Investors who lived through the 1990s will remember the crises in Asia, Mexico and Russia that shook global capital markets. Investing internationally has always carried risks and it is by no means without perils today.

But many investors see a different trade-off, one based as much on a stagnant or declining United States as on certain international markets that are growing, if not booming. [If we keep in mind this article ‘assumes’ that the reader is, er, ‘wealthy enough’ to at least ponder the investment advice offered here, the same statement is ‘incendiary’ to those of us, er, ‘left behind’ by the investor class.]

“When you make an investment in nondollar currencies, you’re making two investments at once,” said Tony Roth, head of investment strategies at UBS Wealth Management. “You’re betting the dollar will go down, but you’re also buying another investment. You need to be compensated for that source of risk.”

He cited the example of buying a one-year Australian government bond, yielding 5.25 percent. He said he believed that the American dollar was going to lose value and the Australian dollar was going to gain it. That’s Part 1. Part 2 is that the Australian government is stable, so an investor can count on receiving that 5 percent annual return. The alternative is less than half of a percent if invested in United States Treasuries.

“I’m going to receive a return,” he said, “that more than compensates me for the marginal risk I’m taking.” [Notice the disturbingly ‘self-centered’ tone of this last paragraph. It’s not about the community you live in (being devastated) it’s all about making something for YOUR pocket! ‘Invisible hand’ my ass! It’s always been about ‘hooray for me and fuck the rest of you!’ It’s high time we put that kind of treasonous tyranny where it belongs, on the hangman’s platform!]

But there are far more risky investments. And the ones that are less liquid — infrastructure in China, say, or a private equity fund in Brazil — carry more uncertainty. But like their equivalents in the United States, they provide a higher return, in theory.

Mr. Frame said clients were investing in Asian infrastructure and Asian private equity by pooling their money with other investors. “There is a lot going on when a country is growing and developing that is hard to address through the public markets,” he said.

While there’s an obvious "pull" to international investments, there is also a bit of a "push" out of the United States: investors who are making their portfolios more international are doing so because they believe that the role of the United States in the global economy is shrinking.

Mr. Roth said the United States contributed 40 percent of global gross domestic product 15 years ago and now contributed 21 percent. He predicted that that figure would fall to 12 percent in another 15 years. Going along with this is the shrinking market capitalization of American stocks compared with global stocks.

“We have the U.S. experiencing flat to 2 percent G.D.P. growth, but you have Brazil, India and China with substantially higher rates,” Mr. Lucken said. “Equity investors are investing abroad to capture higher returns and invest ahead of higher growth rates.” [snip]

Do not fail to recognize this for what it is, it is nothing short of treason! These traitors are putting their own financial interests ahead of the interests of the rest of the nation. Until we regain control of the government, these worthless slimeballs will continue to literally bleed the rest of us to death…because in case you haven’t noticed, you are a ‘captive audience’, you have no place to go!

Unlike the three characters in tonight’s second offering

If you have enough money YOU CAN ‘buy your way out’ of the sinking US economy…

Could Millionaires Fleeing the U.S. Cause a Wildcard Economic Event?

November 21st, 2010

For years, I’ve received emails from people who want to move to New Zealand. Some young, some old. Some well off, some not so well off.

Over the last month or so, three millionaires have emailed me about moving to New Zealand. [Truth be told good citizen, if I had the money, I’d be looking for a ‘safer’ place to be myself…]

The three people who emailed me were all going to invest their way into New Zealand. In case you don’t know, millionaires can make “investments” in New Zealand to, in effect, buy different types of residence visas. New Zealand Immigration calls these “Business Visas.” Depending on the type of arrangement and the age of the applicant, between NZ$750,000 and NZ$10 million is required. [So plans to open a Pez dispenser sales booth isn’t good enough to buy you entry into a, er, ‘safer’ environment.]

It’s one thing for me to leave the U.S., with my meager savings, boxes of books and already old clothes (not much, in other words), but what happens if large numbers these wealthy people leave the U.S., pulling millions of dollars out of U.S. banks and moving it… elsewhere? [I think Kevin has the wrong ‘take’ on this, these people are fleeing the growing ‘economic desert’ where ‘lack of funds’ is increasing the incidence of ‘lawlessness’. There are still roughly 750 US Billionaires so a few, er, ‘multi-millionaires’ isn’t about to cause a financial panic…especially when we consider ‘what’ it is that makes most of these ‘refugees’ rich…stocks! These people AREN’T going to liquidate their holdings just to move to a different economy.]

It worries me that I heard from three of these people in such a short period of time. What does that mean, in terms of the bigger picture? Might this be a leading indicator of something to come? I started to wonder if this flow of wealthy people out of the U.S. represents a sort of wildcard threat to the U.S. economy. Is there a way to know how much money is leaving the U.S., and at what point it places the system in jeopardy?

I know, many of you are thinking, “Who cares if a few fat cats flee the U.S.?”

Well, in case you haven’t noticed, a tiny number people have most of the money in the U.S. The absurd U.S. ponzi scheme depends on these wealthy people leaving their funds in U.S. institutions. One of these people leaving the U.S. (and taking their money with them) would be like thousands or tens of thousands of “normal” people pulling their money out of the banks. [Still, the ‘percentages’ aren’t there…most of us don’t have a pot to piss in, never mind a window to throw it out of!]

Anyway, if little-old-Kevin on his backwater conspiracy blog heard from three millionaires who want to flee the U.S., what might we be able to extrapolate from that in terms of the bigger picture, if anything? Has some kind of tipping point occurred? Or, is this not that big of a deal?

Um, I’d be inclined to say ‘no biggie’, there’s aren’t ‘millions’ of millionaires and a lot of people who are so fortunate CAN’T liquidate their holdings because they’re locked up in a trust!

There are only a couple of hundred thousand ‘households’ with networth in excess of seven figures. Of those ‘couple of hundred thousand’, only one percent of them control 85% of that wealth! This brings us to our handful of billionaires, with a large percentage of members having a single billion and change.

Worse is how much of this exists only ‘on paper’. You can be fabulously wealthy ‘on paper’ but ‘penniless’ in fact. We are extremely fortunate that most of the ‘quadrillion dollars’ worth of CDS debt exists only ‘on paper’ because push come to shove, there isn’t a ‘quadrillion dollars’ in the whole fucking world!

Sort of like ‘old times’ where instead of ranting for three or four pages, I provide you with half dozen pages of somebody else’s stuff!

Then I’d worry that I’ve taxed your patience and sign off real quick

Leaving my opening comment unexplained…actually, half the time, I leave a lot of topics open for interpretation…

I guess I’m just no good at pinning something down and beating it to death. If I get bored writing it, you MUST get bored reading about it!

One last comment before I do close this out. Didn’t Mr. Rich focus this week’s piece on the potential for a Palin presidential bid?

Ironically, ol’ Hil has just gone ‘on record’ as stating she ‘isn’t interested’ in making another run at the White House.

Naturally, politicians seldom say what they mean…

Thanks for letting me inside your head,


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