Call for Support Against the ALS Disease

Fellow blogger and friend of mine, Mish, is raising funds to fight ALS.

What is ALS?
Amyotrophic lateral sclerosis (ALS), also referred to as Lou Gehrig's disease in American English and motor neurone disease in British English, is a form of motor neurone disease caused by the degeneration of upper and lower neurons, located in the ventral horn of the spinal cord and the cortical neurons that provide their efferent input. The condition is often called Lou Gehrig's disease in North America, after the New York Yankees baseball player who was diagnosed with the disease in 1939. The disorder is characterized by rapidly progressive weakness, muscle atrophy and fasciculations, spasticity, dysarthria, dysphagia, and respiratory compromise. Sensory function generally is spared, as is autonomic and oculomotor activity.

ALS is a progressive, fatal, neurodegenerative disease with most affected patients dying of respiratory compromise and pneumonia after 2 to 3 years; although some perish within a year from the onset of symptoms, and occasional individuals have a more indolent course and survive for many years.


How you can help?
Mish's sponsoring a raffle for the benefit of ALS research. 50% of the proceeds will go to the Les Turner Foundation, with the money specifically earmarked for ALS research. And the lucky winners can win up to $1,000,000.

You can support this action by participating in the raffle Mish has set up. All details are available on Mish's post.

Should you want to simply donate, and not participate in the raffle (50% of the money is dedicated to the raffle, and only the remaining 50% to ALS research), or provide corporate sponsorship please get in touch directly with Mike "Mish" Shedlock.

Why Mish is doing this?
Mish's wife, Joanne, has Progressive Bulbar Palsy a particularly aggressive form of the disease.

Why am I getting involved?
I was among the close circle of friends aware of this, and have been deeply empathizing since I heard about it. Unfortunately, 2011 and 2012 have been bearing many such news to me. This is just one more, and it seems to us to be a very cruel one.

I hope I won't offend anyone, and actually help people cope with such situations by taking a buddhistic approach, on empathy and compassion, but also on detachment. With this in mind, I would like to quote Richard Dawkins:

"Nature is not cruel, pitilessly, indifferent. This is one of the hardest lessons for humans to learn. We cannot admit that things might be neither good nor evil, neither cruel nor kind, but simply callous -- indifferent to all suffering, lacking all purpose."

Richard Dawkins 

The buddhists have a different way of approaching life, in which dying is an integral part of.

A great introductory text is Meditations on Living, Dying, and Loss: Ancient Knowledge for a Modern World from the First Complete Translation of the Tibetan Book of the Dead.

Mish Interview on RT

Mish was interviewed on RT's Capital Account last week.

Mish mainly discusses the European situation.

The 20min odd video is available on YouTube and embedded below:

Gold in 2011 is what Oil was in 2008

It's not 2008 — NO — It's 2011-Oh-Eight. I borrowed this from M3 Financial Sense, which post I couldn't agree more with. Here's a quote:

However, the trades in equities are not the monsters of the era, those are the currency and debt trades and the commodity shorts. EURO, Dollar, Pound, Silver, Oil, Gold, Palladium, the softs and hards...it does not matter they are all destined for a major collapse. However, I expect this panic in the equity markets to trigger further distortions in these markets. Targets remain as I have said a few weeks back: EURO - 1.47 to 1.49 and Dollar Index - 71 to 69. The action, will not be orderly...and Eric Sprott, among many others, will be broke when the ashes are revealed.

Well, indeed, in my opinion, we are facing the perfect set up for a massive crash, and which asset is bubbling at the moment, and making all the headlines, making new all time highs everyday like oil did back in 2008 while the markets were imploding? It's gold.

So I believe gold is the last bastion of greed and speculation, like oil was, except that you cannot find any bear on gold, not even deflationist like Mish can think of gold going lower.

I think gold either has peaked, or will peak just shy of $2,000, the way oil peaked at $147 just shy of $150.

Now, the main issue is that IV is very very high, so shorting gold with put options is very expensive. I am now waiting for a nice set up to short it out-right buy going short GLD shares.

Mish Interview on Daily Ticker

Mish was interviewed today on the Daily Ticker.

His points are that markets price a perfect economic recovery while the worldwide, economies are sinking. He mentions Europe, the US, and also China over-heating and Australia's bubble popping.

The stimulus that the Fed and Congress have provided is running out of steam, and not just in the US, it's worldwide.

We're in BubbleLand in Commodities and BubbleLand in Junk Bonds.


In the second segment, he discusses the political soap opera that is going about the debt ceiling, where it's clear that the Republican will finally raise the debt ceiling, but that "there is no political problem from either party to address the problem".

The two segments are available embedded below, or you can watch them directly from Yahoo:

1. What Recovery? The Economy’s Weak And Getting Weaker, Says Mish
2. Debt Ceiling Vote a “Political Sideshow”, Mish Says: Real Issue Is “Govt. Spending Run Amok”

LinkedIn down 30% in 2 trading days — PER still at 1,200

This is a follow up on the previous posts about the crazy valuations LinkedIn has reached and the exuberance of investors to what might be the final top of the biggest financial mania in the history of mankind — the last 30 years.

Mish quoted me a few days ago and mentioned that he disagreed with the PER that I came up with:
I calculate not 950 but 208 did Mish conclude.

We had a few email exchanges about this, where my point was:

The official SEC filling I saw mentioned $9 million net profits. Maybe the guy you quoted is using EBITDA or something.

This has been confirmed after several other checks that I performed... I think Mish didn't had the time to update his post accordingly.

The stock is already down 30% from the top as you can see on the chart below and Yahoo Finance is showing the same crazy PER that I found, north of 1250 after the stock declined 30%:

Moreover, I made the following comment by email that I am also sharing with you:

Now imagine LinkedIn's actual profits increase ten fold. The PER will drop to 100. Still crazy number. If you aim at a 10x increase and a 20 as PE, the share would need to drop by 80%. This is just how crazy the current price is. And bare in mind that this is an optimistic scenario. It's easy to see profits stagnate and PE fall to 10 in the case of a bear Market. In this case the stock would trade at 5-10 dollars and would still be richly valued.

Finally, to add to your opinion about linkedin: one has to bear in mind that the majority of user - say 90% - either are completely passive or have dummy accounts they do not use. Moreover the company is not a start up, it is a mature web site that is about 10 year old. So imagining a growth of several hundred percents a year for many years to come requires more than a lip of faith IMHO.

Debunking bubble economies - Australia and Canada, Mish weights in

Lately, Mish has been posting about the bubble-economies which I have been warning about, so here are a few interesting posts he wrote in the past few weeks:

• 2010-12-18 - Canadian Borrowing Gone Mad: A Look at BMO's Misguided Balance Sheet Theory and the Keep on Dancin' Market Share Theory of Toronto-Dominion
• 2011-01-02 - Australia Heads For Economic Crunch; Similarities Between Australian and Chinese Stock Markets; Global Property Bubble Cycles
• 2011-01-10 - Australia's "Tulip Mania" About to Crash; 44% Jump in Property Listings Proves the Proposed Housing Shortage is Gargantuan Myth; Playable Actions

Mish has also wrote countless posts about China, which I recommend reading.

Mish Interview on Frisby's Bulls & Bears

Mish was interviewed on Friday by Dominic Frisby on Frisby's Bulls and Bears.

He discussed his investments ideas and broader economics themes for 2011, including:

• Municipal and state defaults/bankruptcy
• The Irish "bailout"
• Italy being a bigger problem than Spain, and is currently off the radar
• Real Estate: bursting in Australia, and about to burst in Canada, but doesn't comment about the UK because he doesn't know enough about it. "Australia is in a particularly nasty spot", says Mish
• China overheats, has an unemployment problem bigger than the US
• Continuous strengthening of the dollar
• Market sentiment and the extreme bullishness it has reached, both in equities and commodities
• He also discusses Japan, which he likes here, even though the Japanese currency can blow up at any point! So you need to hedge your currency exposure.

I would agree on everything, but Japan. The Yen being at a historical high, and equities markets having rebounded, I'm not sure it's going to be a good investment in USD terms. But I might be wrong.

You can either listen on the embedded player below, or download the MP3 file.

Prechter vs Mish on gold

As mentioned yesterday, I wanted to comment on what Mish stated about gold a few days ago.

By now it should be obvious to everyone (including Prechter), that gold is acting like a currency for the simple reason that gold is money. Gold is performing well in these conditions because it should.
[...]
As money, one should expect gold to perform well against all the other currencies that every country is in a mad race to debase.

Finally, please note that Gold is not rising because of inflation in the US, but rather because of the Fed's foolish attempt to defeat deflation. For more on this line of thinking, please see Inflation Expectation Noise

Because all the central banks have joined in on competitive currency debasement, gold is rising in terms of every fiat currency, again, just as one should expect.

I have a lot of issues with most of these sentences, and Mish being one of the most accurate and one of the economists I respect the most, it's almost unbelievable to me that he wrote them.

First, what does it mean that gold is acting like a currency? Is it he trying to say that it should go higher against all the currencies all the time, continuously?
If this is the case, then, it's not obvious to me, and so certainly not "obvious to everyone".

Second of all, treasuries, cotton, sugar, copper, etc. have also been doing a great. Probably better than gold. How do you explain that?

Mish is also one of the few to believe that central banks cannot change the trend of the markets, and that markets are far bigger than than them. Does he conveniently forget that it's also true for gold?

Does he also forget that the Yen, which is one of the most debased currencies, far more than the USD, is actually at a 15 years high against the USD? Even after new rounds of QE announced by the BoJ?

Additionally, even though we are in a general deflation, securities have been rebounding massively for the past 18 months, and that has nothing to do with deflation or currency debasement. It's just about sentiment and hope. Mish talks enough about those on this posts that I shouldn't even mention them.

One last comment: when 98% of traders are bullish on gold, to the point where gold going to the moon becomes a sure thing, I don't want to end up with the herd. But that's exactly where Mish stands at the moment, and it might be a very painful position to be in.

Finally, Prechter said that when the dollar quantity is deflating, gold is going to price lower in dollar terms. I fully agree with that, but I also know that it's not going to be a straight line.

My opinion is that Mish got a bit ahead of himself. Jugging from most of his post, he's very frustrated by what's going on in the US in terms of economic collapse, politicians and central bankers creating a lot of dangers for the months and years ahead, and also by the markets, which, let's be realistic, are not where they should be, so I fully sympathise with him on all these accounts, but also believe he's wrong on his assessment about the last few months move of gold.

Mish Interview on GlobalEdge

Surprisingly, I missed this interview on Global Edge which dates back from the 31st August 2010 now — unsurprisingly, Mish didn't mention it on his own blog.

This three-way conversation between “Blogger Extraordinaire” Mish Shedlock in the US and private investors Erik Townsend and Michael Hampton in Hong Kong cuts through the fog surrounding the deflation versus hyperinflation debate.

You can listen to it with the embedded player below (Feed subscribers: for some reason, it won't show in the feed) or download it from this link.

The Fed internal conflicts start to weight in. Paralysis should be next.

While the market is bouncing off an overbought condition using Bernanke's arrogant and ignorant talk as a reason, the truth about the Fed couldn't be further from the what people tend to believe:

• 97% of the people believe that the Fed is here to help the economy, the banks, the people. 
• Of the 3% remaining, 2.99% of the people believe that the Fed is evil and able to create inflation at will.
• The remaining 0.01% believe that the Fed is evil, but that it doesn't have all that much power when credit peak has been reached, and more importantly, that the Fed is managed by human beings after all, prone to the same biaises as every one of us.

Robert Prechter is one of this 0.01%, as Mish is and myself. I think Harry S. Dent is also among those. In fact, deflationists are that 0.01%. So am I.

And the proofs are now emerging. A couple of days ago, this very interesting report was published by the Wall Street Journal about the dissents at the Fed. Mish picked that up: Fed Split on Move to Bolster Sluggish Economy

The Aug. 10 meeting of top Federal Reserve officials was among the most contentious in Ben Bernanke's four-and-a-half year tenure as central bank chairman. With the economic outlook unexpectedly darkening, the issue was a seemingly technical one: whether to alter the way the Fed manages its huge portfolio of securities.

At least seven of the 17 Fed officials gathered around the massive oval boardroom table, made of Honduran mahogany and granite, spoke against the proposal or expressed reservations. At the end of an extended debate, Mr. Bernanke settled the issue by pushing successfully to proceed with the move.

Officials were clustered in two camps. In one camp, Mr. Dudley, and the presidents of the Boston and San Francisco Fed banks, Eric Rosengren and Janet Yellen, were distressed that the Fed was far from its objectives of low unemployment and stable inflation.

Richard Fisher, president of the Dallas Fed, and others expressed a concern that Fed moves might be ineffective, arguing that businesses weren't using already ample, cheap credit to fund investments because they were uncertain about many other problems, including government deficits and new financial regulations.

Narayana Kocherlakota, president of the Minneapolis Fed, argued that a large part of today's unemployment problem is caused by issues the Fed can't solve, such as the mismatch between the skills of jobless workers and the skills that employers wanted. "The Fed does not have a means to transform construction workers into manufacturing workers," Mr. Kocherlakota said in a speech after the meeting.

The president of the Philadelphia Fed, Charles Plosser, who has had misgivings before about Mr. Bernanke's initiatives, deemed the latest move premature because, though the Fed was lowering 2010 growth estimates, it wasn't significantly ramping down its estimates for growth in 2011 and beyond. Two other frequent dissenters, Thomas Hoenig of Kansas City, and Jeffrey Lacker of Richmond, Va., also objected. Fed governor Betsy Duke, a former commercial banker, also expressed reservations, according to participants.

Now here's an additional strong message that things might be changing, and that finally, Bernanke might be set some limits:

Aug. 26 (Bloomberg) -- Kansas City Federal Reserve President Thomas Hoenig said he cut back invitations to Fed officials to the Jackson Hole symposium this year to broaden debate and discourage uniform thinking on monetary policy.

“We are trying to avoid the same group so that we get this group think that people can attribute if you only talk to the same people over and over,” Hoenig said in an interview broadcast today on Bloomberg Radio’s “The Hays Advantage,” with Kathleen Hays.

The Kansas City Fed this year invited the other 11 Fed banks to send either the president or research director, not both officials like past years. More international central bankers are coming instead, Hoenig said. The Fed official’s call for more policy perspectives reflects his voting record: Hoenig has been the sole dissenter on policy this year, dissenting five times, including most recently on Aug. 10.

“You don’t get good outcomes unless there is a broad diversity of views, discussion, debate,” said Hoenig, who took office in 1991 and is the Fed’s longest-serving policy maker. The debate should be one “where you can have differences respectfully and graciously of each other and hopefully come to better conclusions,” Hoenig said. That is my goal.”

Hoenig dissented this month from the Fed’s decision to keep its bond holdings at $2.05 trillion by reinvesting about $15 billion to $20 billion a month in maturing mortgage-backed securities to support a slowing economic recovery. The Federal Open Market Committee held the main interest rate unchanged at zero to 0.25 percent, where it’s been since December 2008, and affirmed a pledge to keep rates low for “an extended period.”
[...]

This is not only quite a strong message, but also something that would never have been imaginable just a few months ago. As I stated before, the Fed is naked and Bernanke as well. But it seems like Bernanke  will soon be tarred and feathered.

What inflationists still haven't understood — explained

I've been mentioning this fact since I move from the inflationist to the deflationist camp: very few people understand the current monetary system, and the most knowledgeable of these few people are Robert Prechter and Mish. Harry Dent is also one of the very few deflationist, but he's predicting deflation based on other data and theories than the monetary system.

What Hussman is surprised about, and what Bernanke tells us is exactly what Robert Prechter explained in detail in a long interview back in late September 2009, almost a year ago. I can't go in the details of the interview, but I just listened to it again, and it's very much worth listening to it.

Well this week, Hussman weekly commentary contains a quote from Ben Bernanke which I hope will make all the inflationist think, and potentially flip sides:

Last week, Ben Bernanke appeared before Congress for his regular Humphrey-Hawkins testimony. For most of that testimony, it fascinated me that every time the Bernanke said that the Fed has taken no losses on its operations, there was absolutely no remark that the reason the Fed has not lost money is that the Treasury, directly (Fannie, Freddie) or indirectly (AIG) has made the liabilities held by the Fed whole.

From that perspective, the critical part of Bernanke's testimony was the following exchange with New Jersey Congressman Scott Garrett of the House Financial Services Committee. [...]

SCOTT GARRETT: You bought over a trillion dollars of GSE debt, and to that point, under normal circumstances, on the Fed's balance sheet what you have on there are Treasuries, or if you had anything else on there, I assume you would have a repurchase agreement for those securities on your balance sheet. Now of course around two-thirds of that are in GSE debt.

BEN BERNANKE: Correct.

GARRETT: So right now, those are guaranteed - whether they're sovereign debt or not, we don't know - but they're guaranteed by the U.S. government. But they're only guaranteed to when? 2012, right? After that, Congress may in its wisdom make another decision, and at that point in time, you may be holding on your balance sheet - two thirds of your balance sheet - something that is not guaranteed by the Federal government. First of all, you don't have a ... do you have a repurchase agreement on those with anyone? No.

BERNANKE: I don't know what you mean by a repurchase agreement. We own those securities.

GARRETT: You own those securities. Right. So there is no repurchase agreement outside to buy them back. You own them.

BERNANKE: Right.

GARRETT: So after 2012, if they're no longer guaranteed, is it fair to say that you may at that point in time actually engage in fiscal policy, because you basically are creating money at that time? And I know that you'd agree that it would be an unconstitutional role for the Fed to engage in fiscal policy - so where will you be at 2012 if they had to take a haircut on those because they're no longer guaranteed?

BERNANKE: Well, first from the government's perspective, I, uh, such an act would, uh, there would, the Federal Reserve would lose money which the Treasury would gain. There would be no overall change to the position of the U.S. government. Secondly, the Federal Reserve act explicitly gives..

GARRETT: How would we be gaining? How is the Treasury gaining?

BERNANKE: Well, if there's a bad mortgage and the Treasury.. it requires $10 to make it good, if the Treasury refuses to do that then the Fed loses $10, so one way or another the government's going to lose $10. But I would just say two things, one is that I think, uh...

GARRETT: But if you didn't purchase them in the first place, it would just be a total - then what would have occurred? There would not have been the creation of that $10. Now that you've purchased them, and in essence if we don't back them up, then you will have created that additional $10.

BERNANKE: Well, I hope that doesn't happen, because I think it's very important for financial stability and confidence that we, that we guarantee...

GARRETT: Let's play out that hypothetical that it does happen.

BERNANKE: Well, then the Fed would lose money there. But let me just point out that the Federal Reserve Act, that we did not invoke any emergency or unusual powers to buy those agencies. It is explicitly in the Federal Reserve Act that we can buy Treasuries or agency securities and so we did not do anything unusual there.

GARRETT: In what status were they when you bought them? Were they in conservatorship at that point?

BERNANKE: Um, yes.

GARRETT: Is it normal practice for the Fed to buy agency securities when they're in conservatorship? Was that ever done before?

BERNANKE: It's never been in conservatorship before.

GARRETT: Well, there you go. So the normal practice is not what was followed here. It just seems to me that we may have gone down a different road than we've ever gone down in U.S. history, where the Federal Reserve has engaged in buying a security, it's not Treasury, it's not guaranteed by the full faith and credit of the United States for its lifetime, nor is there any repurchase agreement from any other entity that you purchased - that you have a trade with an agreement with - and that the Fed in essence could have created money if the government does not guarantee them. At least, that could be the situation we could find ourselves in 2012. 

[Hussman's comment:]
It's important to understand that historically, the Fed has never actually "created money" out of thin air. What it has always done is purchase Treasury debt, paying for that debt by creating "Federal Reserve Notes" (see the top of your dollar bill). When it has purchased other types of securities, it has historically done so using "repurchase agreements." These enable the Fed to sell those securities back at a known price, even if the security itself was to default. By restricting the vast majority of its purchases to U.S. Treasury securities, the Fed has always operated under a budget constraint: Congress has always had the sole, Constitutionally enumerated power to authorize the spending that creates government liabilities, and the Fed has merely affected whether those liabilities were held by the public in the form of Treasury debt or in the form of Federal Reserve Notes (money).

For example, if Congress votes on a billion dollars of spending, and the Treasury issues debt to finance this spending, the Fed might buy that billion dollars of Treasury debt and create a billion dollars of currency to pay for it. But notice that from the standpoint of the public, the end result is still a billion dollars of government liabilities, that was explicitly authorized by Congress. The Fed was never involved in spending decisions, which is fiscal policy.

Fed Officials Saw No Need for More Stimulus in June

One might wonder whether the Fed has capitulated or not. Given their track record of failing at every single of their duties, it would be a good idea to decide to close down their business. But something tells me that this is not going to happen.

July 14 (Bloomberg) -- Federal Reserve officials saw no need to boost stimulus to the economy while trimming their forecasts for growth and noting that risks to the recovery had increased, minutes of their June meeting showed.

“The economic outlook had softened somewhat and a number of members saw the risks to the outlook as having shifted to the downside,” minutes released today in Washington said. “The changes to the outlook were viewed as relatively modest and as not warranting policy accommodation beyond that already in place.”

My opinion is that the Fed, the Creature from Jeckyll Island, has created its own monstrous creature, the biggest ugliest, most dangerous credit bubble in mankind's history. That monster is now out of control, and whatever they do, they won't be able to put the evil genie back in the bottle. Hopefully, the genie will destroy its creator in the process.

It's time to check again Bernanke's scoreboard, as kept up to date by Mish:

Here is Bernanke’s roadmap, and a “point-by-point” list from that speech.

1. Reduce nominal interest rate to zero. Check. That didn’t work...
2. Increase the number of dollars in circulation, or credibly threaten to do so. Check. That didn’t work...
3. Expand the scale of asset purchases or, possibly, expand the menu of assets it buys. Check & check. That didn’t work...
4. Make low-interest-rate loans to banks. Check. That didn’t work...
5. Cooperate with fiscal authorities to inject more money. Check. That didn’t work...
6. Lower rates further out along the Treasury term structure. Check. That didn’t work...
7. Commit to holding the overnight rate at zero for some specified period. Check. That didn’t work...
8. Begin announcing explicit ceilings for yields on longer-maturity Treasury debt (bonds maturing within the next two years); enforce interest-rate ceilings by committing to make unlimited purchases of securities at prices consistent with the targeted yields. Check, and check. That didn’t work...
9. If that proves insufficient, cap yields of Treasury securities at still longer maturities, say three to six years. Check (they’re buying out to 7 years right now.) That didn’t work...
10. Use its existing authority to operate in the markets for agency debt. Check (in fact, they “own” the agency debt market!) That didn’t work...
11. Influence yields on privately issued securities. (Note: the Fed used to be restricted in doing that, but not anymore.) Check. That didn’t work...
12. Offer fixed-term loans to banks at low or zero interest, with a wide range of private assets deemed eligible as collateral (…Well, I’m still waiting for them to accept bellybutton lint & Beanie Babies, but I’m sure my patience will be rewarded. Besides their “mark-to-maturity” offers will be more than enticing!) Anyway… Check. That didn’t work...
13. Buy foreign government debt (and although Ben didn’t specifically mention it, let’s not forget those dollar swaps with foreign nations.) Check. That didn’t work...

Mish interview on TechTicker on stimulus and the economy

Short post as I'm away on a long week-end.
Three segments for this video interview.

1. Stimulus will fail
2. Too much optimism in the markets
3. Too much optimism in the economy: there are still no jobs and retail is depressed

The 3rd video is not embeddable so you can watch it here.

Mish Interview on Frisby's Bulls & Bears

Mish is so humble that he's not even mentioning his interviews on his blog... He was on Frisby's Bulls and Bears last week talking about the markets, the economy and money.

Mish's take on Warren Buffett

I have mentioned several times how Warren Buffett is just talking his portfolio up and how his greed and lack of integrity is interfering with his ability to remain objective, if not to tell the truth.

Well, I am very glad to see that Mish is thinking the same and is very vocal about it. In a post he wrote today, titled Buffett Defends the Indefensible: Goldman Sachs and Rating Agencies; Goldman's Sweetheart Deal With Buffett Revisited, he said:

In the midst of the stock market crash, Warren Buffett got a great deal on Goldman Sachs preferreds. Those preferreds are making him $15 a second.

I do not fault Buffett one second for taking that deal. It seemed like a great deal at the time, and it was. The problem is, it's important to distinguish between a deal good for his shareholders, and the integrity of Goldman Sachs.

Sadly, Warren Buffett is now caught in no man's land, unable or unwilling to see the difference.[...]

"We love the investment," Buffett said. "Our preferreds are paying $15 a second, so as we sit here, 'Tick, tick, tick, tick,' that's $15 every second," he said.
Buffett added that the SEC lawsuit was not a serious enough event to raise reputational issues that would call into question the Berkshire investment.

That last sentence is complete nonsense at best. At worst it is a blatant lie.
[...]
Buffett voluntarily put himself in the position of having his integrity questioned. He could have said "we got a great deal" and left it at that. It would have been a true statement.

However, it's hard not to defend someone who give you a sweetheart deal that makes $15 a second.
[...]
I agree with Buffett that Moody's, Fitch, and the S&P have an "incredibly wonderful businesses" in the same sense the Mafia has an "incredibly wonderful businesses" with its numbers racket.

At least with the Mafia, you know what the odds are, and profits are paid in cash.

With the rating agencies we saw blatant incompetence and fraud every step of the way. What makes that a 'Phenomenal' Business Model is explicit government sanction.
[...]
Once again, I do not fault Buffet for spotting an "incredibly wonderful businesses" whose "pricing power is significant." I can and do fault Buffett for his defense of pervasive rating agency fraud, shrugging it off as a mistake.

Here are a sample of my posts about Warren Buffet:

• 2010-05-02 Buffett says Ratings Companies Still Have 'Phenomenal' Business Model
• 2008-10-24 Losing My Integrity - Warren Buffet's Next Book?

Clck here for all my posts about Warren Buffet.

Eric King interviews Robert Prechter, Mish and John Hathaway

Eric King at King World News has interviewed both Robert Prechter and Mish (separately) as well as John Hathaway, all of the them on the 20th of March.
Here are the links:

• Robert Prechter
• Mish
• John Hathaway

Congratulations to Mish, who has been one of the most accurate in his forecasts and also been consistently very good in the timing of his calls (except the the current market top, where he has been too early, like many of us). Wish him a lot more success and credits than he currently gets, as he deserves so much more.

Mish and Marc Faber interviewed together on TechTicker

Not much to add, except that Marc is still inflationist and the Mish is among the handful people deflationist (and so I am).

Mish on GoogleTalk - Peter Schiff on Authors@Google

Mish has been talking at the GoogleTalk sessions and Peter Schiff on the Authors@Google sessions.The only comment I'll make is: I didn't know Mish was a former software developer who worked 20 years programming mainframes!