The Unsinkable brian cork™

Brian Patrick Cork is living the Authentic Life

just so you know

May10

Last week the Dow Jones Industrial Average (“DOW”) plummeted close to 1000 points, and only began to right itself as the closing bell sounded. This represents the single most volatile trading day in market history. Just in case you forgot about this already; or, possibly failed to care – here is a link to the story: Link To Ridiculous Story – and another for good measure: Link To Another Ridiculous Story Discussing The Hapless Trader, however, this is my favorite: A mysterious day jolts Wall Street watchers.

The stock photo images of grim-faced and distraught traders on the floor and news reporters are priceless.

Several theories abound as to why, or how, such a thing could happen. Foremost amongst those rabid speculations was a story that some (rogue) trader inadvertently placed a coma in the wrong numerical sequence and initiated a enormous sale order that sent the automated systems into a tail-spin. That means something akin to: “he accidentally pushed the wrong button”.  Mind you, this (the event; I very am skeptical about the button) stopped the recent global enthusiasm and the markets upward trending, dead-in-it’s tracks. Markets around the world pulled back – generally stating concerns over what’s happening in Greece… for good measure…

The Greece “thing” has some merit. And, I’ll discuss that later this week.

In any event, that (all the rest of it) is likely nonsense (the theory, not the loss of enthusiasm; or, what’s not happening in Greece).

Today, markets are a bit more bullish, as is the DOW. I can prove this information by having you simply view this link:  The Dow on May 10, 2010. I’m quite clever with such things.

Okay… So, what has really occurred is: analysts and traders (think Goldman Sachs needing to “war chest” funds to cover their pending indictment) decided that by pulling off a well-orchestrated scheme stunt (also, and often, referred to, derisively, as: “shenanigans”), they could drop the market and take out a bunch of unsuspecting citizens. They probably shorted key stocks under index. They then picked their bottom-number and started taking buy-side positions in the same stocks knowing they would be bought up by day-traders (a most-excellent example of the sophomoric, if ever there was one) that thought they were buying into an upwardly trending market. So, having hedged their bet, they made big money going both ways at the expense of a lot of people reading this post.

Voila.

In the weeks to come you’ll read how the Securities and Exchange Commission (SEC) and Obama will call for some vague investigation. But, nothing will come of it.

Peace be to my Brothers and Sisters.

Brian Patrick Cork

information is Not always power

April22

Wall Street tumbles as investors dump financials – by Tim Paradis – April 21, 2009.

“Long-present unease about soured loans bubbled over on Monday after Bank of America Corp. said it set aside $13.4 billion to cover lending losses even as it posted earnings that beat expectations. Other big banks have also increased loss provisions in the past two weeks.”

So… Mr. Paradis was mistaken. And, despite this sort of irresponsible poorly-researched reporting, the Dow took a short-term hit (however, it hardly qualified as a tumble under any circumstances), but then finished up 127.83 for the day as evidenced below:

2292

Maybe citizens are wising up. Or, perhaps we can’t be bothered with bad news any longer. It’s Spring after all, and high time to get on with a booming economy. No more shenanigans say we.

A real issue, although not boldly stated (other than here on this Blog) is general sense of unease around whether government officials and executive leadership understand what tools are needed to offer a long-term economic solution. For example, President Barack Obama has never held a real job over the course of his post graduate and professional life (non-profit work, really does not count because the rules, expectations and results are simply different. And, being a lawyer makes it worse because they tend to make up or bend rules to suit their own agenda).

“Separately, The Wall Street Journal reported that banks receiving government bailout money are having a hard time making loans.”

…what?

Did Obama specifically charter the banks to deploy federal funds to stimulate the economy through loans? Isn’t this why we are going to take an enormous tax hit later this year?

I have discussed this topicology (I made that word up) on this Blog before. For a recent example, consider my fairly recent post: the unexpected is so predictable. We have sophomoric executive leadership making decisions that come across like shooting from the hip, that make them the whole lot appear like chimpanzees with shot guns. It gets worse when you have by-line crazed goofy reporters Paradis, Crutsinger and Cramer to name only just a few), with questionable credentials, positing ill-conceived comments that rattle generally misinformed investors and citizens.

A crucial lesson I learned as a firman in Colorado was:

“It’s what you don’t know (worse, what you don’t see) that can kill you faster”.

It’s too easy to form a belief or opinion based on a quick read, or what you hear. We need to be informed. But, don’t just take my word for it. Relish any opportunity to question everything and accept nothing. God gives us discernment. It’s a fascinating, vital tool.

Information is not always power. Power must be used for good.

Peace be to my Brothers and Sisters.

Brian Patrick Cork

Full of Magic Beans

December30

My God Brother Steve called me “Bean Bean”. Here is a link to the story. Many of my friends refer to me as “Bean”, or “The Bean”. In fact, most call themselves “Brian’s Beans”.

I call people I like or admire (some times both) “Human Beans”.

So?

Most seem to think I know what I talk about. And, it seems like magic.

It certainly feels like magic.

In any event… As promised in my prior post “Question everything and accept Nothing”, here is some critical thinking, and potential economic predictions…

WARNING:  This may come across a tad grim.  But, I promise to be more playful in the next few weeks.

My guess, looking through the economic fog that currently surrounds us, is that the global economy is on the edge of a major event.  I am thinking of something in terms of a waterfall-like decline. 

Chaotic, tumultuous, steep.  As we go over the brink – let’s admire the view.  Here are (some of) my forecasts for 2009.

The past two years were phase one of the downturn:   a financial crisis affecting Wall Street, banks and brokers.  The next two years will be phase two:  a sustained decline affecting “Main Street” — industry, commerce, retail, governments, etc.

This is me, again, thinking in terms of the Laws of Natural Selection.

So, there will be “selective success” in-and-amongst Main Street – backing up through banks and Wall Street.  … You know, manipulation and related shenanigans. But, this is how it always works.  And, needs to work. America likes progress.  So, if members of the House and Senate want to keep their seats, they must needs deliver.

So…  Barack Obama will invoke all manner of interesting stimulus.  This will probably start in the first quarter with banks pumping money into the marketplace with private equity and Venture Capital in hot pursuit.

This is when and where the rich get richer (never mind Democratic ideology – that is all hog-wash any way) and the shrinking middle class becomes all the more befuddled.

It id likely going to be a front; but, it will be jarring nonetheless. January will start the first quarter with a bang.  

(1)  A hail of pink slips (but mostly redundant workers that can be replaced with contractors) as most businesses seek to reduce headcount by 5% – 10% — and seriously affected businesses do much more.    Like retail, as they close their marginal stores.  I think the unusual number of layoff announcements during the December holidays foreshadowed the main event,

(2)  Retail bankruptcies.  The extraordinary number of retail bankruptcies during the Christmas shopping season sets the stage for the tsunami hitting in the first few months of 2009.   See “Retailers Brace for Major Change“, Wall Street Journal, 27 December 2008.

The big stories for 2009

The primary theme of this downturn has been the unexpected breaking of “links” — components of our economic system.  One such, the opening act of the crisis, was the mass failure of mortgage brokers starting in December 2006.  The a long series of banks, investment banks, insurance companies, and the government-sponsored enterprises followed them into collapse — or forced marriages (mergers and acquisitions) /1, or life-support on the government’s teat.

Cork: So what will be the surprises for 2009?

(1)  Many non-financial firms will collapse (meaning that their functioning is seriously disrupted due to financial problems).  Some of this is expected:  in the auto, retail, and construction industries.  Most will be unexpected, big and small.  Some will result from banks cutting off their loans (anecdotal reports suggest this is happening now to small firms).  Some will result from revenue declines.  This will drive many small and medium banks over the edge, following their larger cousins.  There will be lots of bankruptcies as 2009 runs and even more in 2010.

(2)  Many local governments and agencies could collapse, perhaps even some states (e.g., Michigan, California [again]).  More bankruptcies, although this might be a 2010 story — however (this is where it REALLY gets interesting) this will be strongly mitigated by Federal aid and Wall Street /2.

(3)  The recession will spread from the developed nations (most now in recession) to the emerging nations. 

  • For example, watch China, as most experts expecting GDP growth of 4% – 8%.  Outright decline is possible, and would force everyone (optimists       and pessimists alike) back to the chalkboards to revise their calculations.
  • Watch the oil exporting nations, many of which will run large fiscal deficits.  Iran needs $90 oil to balance its budget, Algeria $56, Saudi Arabia $50.  Mexico has forward sold much of its 2009 production; after that the deluge if oil prices have not recovered.

Cork again:  What about the government?

The primary implication of the above (well considered) speculation is that the Obama Administration starts behind the curve.  The major factor will be when (or if) they update their OODA (observation-orientation-decision-action) loops to run as rapidly as events — responding to current events instead of (like Bernanke and Paulson) the situation as it was 3 months ago.  

I am confident that this will happen at some point in the downturn.  Perhaps they might eventually understand the overall processes at work, and act preemptively (look for preemptive Presidential pardons.  This is a tip that government and Wall Street “understand” one another).

In the next few weeks I will (unless I get distracted and forget) sketch out why government policy will not help much during 2009 (NOTE: fiscal policy might be the big story for the US economy in 2010).  However, in brief – and, in my opinion, the window for Congress to act was November and December.  Bold action could have buffered (not prevented) the shock, as described here on 7 October /3.  But, I think that window has closed.  However, the recommendations remain valid; if implemented during the next few months, they will help in late 2009, and (on a large scale) in 2010.

Meanwhile…  I bet we haven’t even begun to consider the nightmare and madness all this means for poverty-strickened nations like Africa in terms of even larger-scale starvation, disease and war. That will signal a real tipping point when shredded economies have no choice but to turn on one another just to survive. More on this later.  But, look at a world map and consider what naval alliances could be formed.

Lets listen to “Don’t Stop Believin'” by Journey and “Mad World” by Gary Jules – NOT Tears for Fears.

Peace be to my Brothers and Sisters.

Brian Patrick Cork

____________________________

1/  However, this has also given us our first legitimate World Bank candidate.  Gotta love the Illuminati.

2/  You know the drill…  Buy low, sell high.  The survivors will own even more than they imagined before this all began.

3/  A significant day – always chock full of signs and portent.

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What’s All This About?

"What am I looking at?", you might wonder.

Lots of stuff.

Meanwhile, here, I discuss events, people and things in our world - and, my (hardly simplistic, albeit inarticulate) views around them.

You'll also learn things about, well, things, like people you need to know about, and information about companies you can't find anywhere else.

So, while I harangue the public in my not so gentle way, you will discover that I am fascinated by all things arcane, curious about those whom appear religious, love music, dabble in politics, loathe the media, value education, still think I am an athlete, and might offer a recipe.

All the while, striving mightily, and daily, to remain a prudent and optimistic gentleman - and, authentic.

brian cork by John Campbell





photos by John Campbell

 

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