Thursday, August 25, 2011

Warren Buffett Attempts to Stick-Save Bank of America, Stock Gets Hammered

LA Times Reports
Bank of America, under fire from shareholders and analysts, is getting a $5-billion investment from Warren Buffett's investment company. The banking giant's stock soared this morning on the news.
The investment by Berkshire Hathaway is reminiscent of a $5-billion investment Buffett made in Goldman Sachs in September 2008 in the depths of the financial crisis. That injection of capital helped restore confidence in Goldman and helped the Wall Street firm attract other investments.
As with the Goldman infusion, Buffett negotiated extremely favorable terms from Bank of America. He is set to receive BofA preferred shares that will pay Berkshire a 6% dividend each year. If the bank wants to redeem the shares it has to pay Buffett a 5% premium.

Monday, August 22, 2011

Trends Journal Alert: China Offshoring The Collapse of the Western World

Paul Craig Roberts opines

How big is planet earth? Large if compared to the moon, small if compared to the solar system, and infinitesimal if compared to the universe. The point is that the size of something depends on that to which it is being compared. 

The San Francisco Federal Reserve Bank and offshoring’s shills forgot this simple point. On August 8 the SF Fed put out an Economic Letter in which US imports of goods made in China (both by Chinese and US firms) were explained away as a mere 2.7 percent of US personal consumption expenditures. 

I am confident that the staff of the SF Fed were competent to get the percentage correct. But does it mean anything? No.

For most Americans, their income is used up on housing, energy, car payments, food, and medical care. Very little income is left, especially these days, for durable (for example, furniture and household equipment) and nondurable (for example, clothing and shoes) manufactured goods. 

Ron Paul Classic: Predicts Housing Bubble in Monetary Hearing with Alan Greenspan 2004