• Discussion between Liz Cheney, former Dep. Asst. Secretary of State for Near Eastern Affairs with Greta Van Sustrand of Fox
• Rich Harvard Poor Harvard - Vanity Fair writer Nina Munk with CNBC
• David Rosenberg on CNBC Fast Money
• Finding Wall Street Jobs - Career Coach Charlotte Lee on CNBC
• Dennis Kneale of CNBC on a rant against Bloggers

• "I think, it is causing some people to have concerns about what role Secretary Clinton is able to play and what success she has, what role the National Security Advisor Jim Jones has and whether the people who really have the President's ear on foreign policy are his political strategists.."

• In that article, we wrote, "President Obama has centralized power in his White House to an unprecedented extent. There is no policy that the Obama White House does not control completely. He has appointed several czars that report to his White House team thereby reducing his cabinet to being royal sycophants. He has even marginalized Secretary of State Hillary Clinton by his appointment of czars for every important region."

on CNBC - Thursday, July 2 -1:40 pm

                              (photograph - Vanity Fair)

The July 7 issue of Vanity Fair will feature this article and writer Nina Munk gave a preview of sorts to Michelle Caruso Cabrera and Sue Herrera of CNBC. The travails of Harvard Endowment are widely known. The Endowment "lost" about $8 billion in 2008, a staggering sum. Writer Munk describes this as the

• "A frequent guest here on CNBC is Mohamed El-Erian. He is now the CEO of Pimco. We have been interviewing him for years. He is lauded. You know, Squawk Box calls him one of their Icons and Rebels. He ran the (Harvard) Endowment for little less than 2 years. Some people say very nasty things about him in this article. Give us a sense, our viewers would like to know, how much of a role do you think he played specifically in the problems of Harvard?"

• Anchor Lee - "I know Karen, you still believe in the TBT trade (double short Treasuries ETF)"
• Karen Finerman - "Absolutely, I don't love that ETF as an instrument, but it is an easy way. Nothing really has changed for me, the idea that we have so much debt yet to come & we will potentially have some inflation numbers sometime in the next few months..I can't see is it possible we don't have that? Yes it is possible but it does not seem to be the most like it outcome. That's the trade I like for the next quarter, for the next year"

• "I had predicted on Friday night that some cynical, mean-spirited bloggers would trash me for this end-of-recession proclamation. They haven't let me down.Their invective is lighting up the dark, anonymous and cowardly corners of the bloggosphere"

• Then Mr. Kneale repeats some of the adjectives used by the bloggers to describe his show and emphasizes what he apparently considers to be the worst insult "comparing me to watching a 350 lb woman in a thong bikini on the beach" (careful, Mr. Kneale - you might have offended aficionados of what you describe if they exist - you should always add the seinfeldian "not that there is anything wrong with it" disclaimer after expressing your contempt of the physique of any group of human beings).

• Then Mr. Kneale addresses his critics "you digital dickweed & I say dickweed became it is indeed a plant" and adds that "name calling is a lingua franca of the bloggosphere".

• "We contacted 7 different bloggers who have taken a shot at me from their dark and cozy safety of their mother's basements, I presume, and we invited them to come on air & have at it."

1. We were not contacted by either Dennis Kneale or any one else at CNBC.
2. If contacted and invited, we would happy to defend our criticism in person on air with any CNBC anchor.
3. Our criticism of CNBC is straightforward and based on issues. We, like countless viewers, rely on CNBC for fast, accurate and UNBIASED information as well as a diverse set of opinions about financial markets. When CNBC acts in our interests, we applaud it and when CNBC hurts our interests to protect their short term ratings, we criticize it. It is as simple as that. We will defend our opinions any day and twice on Sunday. 

• The dispute between China and India goes back 60 odd years. After India’s independence in 1947, Jawaharlal Nehru, the “messenger of peace” Prime Minister of India, unilaterally withdrew the Indian Army from Tibet because he did not want his India to be an imperialist power. Within a few years, the Chinese army moved in unopposed and occupied Tibet. The Dalai Lama fled to India where he now resides. China now proclaims Tibet as an integral part of China.
• Soon thereafter, China began claiming the entire state of Arunachal Pradesh as its territory on the grounds that it uses to be a part of Tibet at one point in the past. China refuses to accept the 1914 Treaty between Tibet and India in which Tibet affirmed Arunachal Pradesh as the integral part of India.
• The defining event in the China-India relationship is the short but traumatic war in 1962. The Chinese humiliated a woefully unprepared India and conquered tracts of Indian territory. This attack destroyed Nehru's "Hindi-Chini Bhai-Bhai" (China-India are brothers) policy and changed the course of India's defense thinking.
  

(A straight line of attack from Lhasa, Tibet)              (Arunachal Pradesh in red - Source Wikipedia)

• Li Hongmei wrote in the People's Daily that Indians harboured a mix of "awe, vexation, envy and jealousy — in the face of its giant neighbour".
• An editorial in Global Times on June 12 said, "India can't actually compete with China in a number of areas, like international influence, overall national power and economic scale. India apparently has not yet realised this... India's growing power would have a significant impact on the balance of this equation, which has led India to think that fear and gratitude for its restraint will cause China to defer to it on territorial disputes. But this is wishful thinking, as China won't make any compromises in its border disputes with India. And while China wishes to coexist peacefully with India, this desire isn't born out of fear."

• In recent years however China has been raising the temperature at the border. Chinese claims to Arunachal Pradesh and frequent Chinese"incursions" into the nearby Indian state of Sikkim have begun to multiply in line with Beijing's rising economic and political influence. Moreover, unlike India, China has methodically developed its infrastructure along the disputed border, littering the barren terrain with highways and railways capable of moving large numbers of goods and troops.

• For its part, New Delhi has become both increasingly aware of its disadvantage and exceedingly suspicious of China's intentions. India's June 8 announcement that it will deploy two additional army mountain divisions to the northeastern state of Assam will bring India's troop levels in the region to more than 100,000 (still dwarfed by Chinese strength of 300,000 troops). The Indian Air Force,meanwhile, announced it will station two squadrons of advanced Sukhoi-30 MKI aircraft in Tezpur, also in Assam. They will be complemented by three Airborne Warning and Control Systems and the addition or upgrade of airstrips and advanced landing stations. This is part of a broader effort to bolster India's military and transportation infrastructure in its neglected northeast.

• Upon hearing India's plans, Beijing became irate. The People's Daily, a Communist Party mouthpiece that serves as a window into the thinking of Beijing's insular leadership, published an exceptional broadside against New Delhi on June 11. It described India's "tough posture" as "dangerous," and asked India to "consider whether or not it can afford  the consequences of a potential confrontation with China." China is not afraid of India, the editorial taunted, while mocking India for failing to keep pace with China's economic growth.

• In the short term, a priority must be to tamp down friction over the border. In the longer term, Washington should leverage its friendly relations with both capitals to promote bilateral dialogue and act as an honest broker where invited. But it should also continue to build upon the strategic partnership with India initiated by former president George W. Bush, and support its ally, as it did at the Nuclear Suppliers group and the ADB, where necessary. Washington must also make clear that it considers the established, decades-old border between the two to be permanent.

• Most importantly, though, the Sino-Indian border dispute should be viewed as a test for proponents of China's "peaceful rise" theory. If China becomes adventurous enough to challenge India's sovereignty or cross well-defined red lines, Washington must be willing to recognize the signal and respond appropriately.

         

            (Border Post at Nathu-La - WSJ)                        (Attack thru Nathu-La could split off NE India)

The Greater Aims of China

The Wall Street Journal article focuses mainly on the border dispute between China and India. In our opinion, this is merely a symptom of the real problem and not the problem itself.

In our opinion, China’s main goal is to establish its hegemony in Asia and be declared as a Superpower on par with the United States. China mistakenly believes that, because of its trillion dollar reserves and America’s need for China to buy its debt, China is today the equal of America.

This explains the utterly stupid but completely characteristic demand made by China in a meeting with Admiral Keating, the PACOM naval Chief. This was covered in detail in our May 16 article  China's Leadership - Just Drunk Or Delusional?  In Admiral Keating's own words, the Chinese Official said to him:

• "You, the US, take Hawaii East and we, China, will take Hawaii West and the Indian Ocean. Then you will not need to come to the western Pacific and the Indian Ocean and we will not need to go to the Eastern Pacific. If anything happens there, you can let us know and if something happens here, we will let you know."

• Jeffrey Sonnenfeld Of Yale & Erin Burnett Of CNBC - Read The China-India Article in Foreign Affairs - February 28, 2009
• Dr. Jeffrey Sonnenfeld of Yale - Is his ignorance symptomatic of Global Investors? - June 14, 2008

• Chinese media on India-bashing spree - June 24, 2009
• Message to China: Army plans trek to Khatling - June 18, 2009
• Chinese incursions into Indian territory rose sharply in 2008 - June 9, 2009
• China bigger threat than Pakistan, says IAF chief - May 24, 2009

The Wall Street Journal published an article by Steven Waldman titled In Iran, Gandhism Comes Of Age.  The Wall Street Journal informs us that Steven Waldman is the Editor-in-Chief, President & Co-Founder of Beliefnet.com, a faith and spirituality website.

This is an interesting article and one that should be read. We liked reading this article. Unfortunately, we came away with the conviction that Mr. Waldman neither understands Gandhi nor the current upheaval in Iran. In this article, we tell why we think so.

The "Comes of Age" part of the article's title comes from Mr. Waldman's belief that the Gandhism was dependent on the "widespread dissemination of information about atrocities through mass media." That is why his initial  paragraph states "Indeed, the digital age -- when every phone is a camera and a telegraph -- makes Gandhism far more potent than it was when he was alive. Truth is, Gandhi’s approach was not well suited to his time."

It is undeniable that Gandhi made brilliant use of the media capabilities available to him. But, Mr. Waldman is overly simplistic and confuses tactics for core strategy. He should recall that Gandhi's struggle in India began in remote, deeply rural Champaranya and his successes came in persuading the deeply poor Indians all over the country to rise against the British. But, more on this later. 

We include some excerpts from Mr. Waldman's article below:

Editor's Note: In this series of articles, we include important or interesting videoclips with brief comments. Our Web Software does not permit embedding of the clips into our articles. So we shall have to be content to include the links to the actual videoclips.

This is an article that expresses our personal opinions about comments made on Television and in Print.  It is NOT intended to provide any investment advice of any type whatsoever.  No one should base any investing decisions or conclusions based on anything written in or inferred from this article. Investing is a serious matter and all investment decisions should only be taken after a detailed discussion with your investment advisor and should be subject to your objectives,suitability requirements and risk tolerances.

Wednesday June 23 was the eventful day of last week.  The Federal Reserve released its statement after a two-day meeting. But this was eclipsed by a crass but critical political play. Representative Issa of California made a public allegation that Ben Bernanke, the Federal Reserve Chairman, had engaged in a "cover up". This story hit the tape just before the scheduled release of the Fed statement. 

We have to give credit to CNBC and its afternoon anchors, Erin Burnett and Maria Bartiromo, for rising to the challenge of covering these two breaking stories of significant importance. They got the facts out to the viewers, got real experts to opine on both Ben Bernanke's integrity and the implications of the Fed statement. CNBC should be proud of the job these two anchors did that afternoon.

• Warren Buffet with Becky Quick on Wednesday, June 24
• Bob McTeer (ex-Fed President) and Jan Hatzius (of Goldman Sachs) with Maria Bartiromo on Wednesday, June 24
• Jim Cramer with Erin Burnett on Wednesday, June 24
• Ed Lazear (Bush Admin) and Martin Baily (Clinton Admin.) with Erin Burnett on Tuesday,  June 23
• Paul Desmond (of Lowry's) with Bob Pisani on Wednesday, June 24
• Bill Gross (of Pimco) and Ken Volpert (of Vanguard) with Erin Burnett on Wednesday, June 24
• Jordan Kotick (of Barclays) with Maria Bartiromo on Tuesday, June 23
• Jason Graybill (of Carrett(?)) on Fast Money on Monday, June 22
• Hillary Mann Leverett (of Stratega) and David Frum (of Axis of Evil fame) with Lou Dobbs on Tuesday, June 23

• Quick - You mention that Ben Bernanke did a good job. Today is an FOMC meeting day, we are going to be hearing  more about that at 2:15 today. Do you think Ben Bernanke should be re-appointed to a second term?
• Buffet - I don't see how you could do better.  yeah,  he has taken decisive action at a  time when really decisive action was needed and extraordinary action..things we have not done before.

• Bartiromo - Mr. McTeer, let me kick this off with you. Obviously a lot of back and forth about the Chairman of the Fed. How do you see it? Did Bernanke do something wrong or inappropriate?
• McTeer - I sat beside Ben Bernanke for three years at the FOMC (Federal Open Market Committee) table and engaged in private conversations and even whispered conversations. He is a Boy Scout if not a Girl Scout. I can't imagine him doing what they are accusing him of doing ...

• Burnett - There's a lot of things going on in the past 20 minutes, sort of takes your breath away, first of all you have the Fed, the market which was up 130 is now down 30, you also had heard Darrell Issa who was on our air saying there was a cover up and it was frankly a direct attack on Ben Bernanke. Which story do you think is more important?
• Cramer - I think the cover up story, because Bernanke is a loved figure on Wall Street and no one wants to lose him. 1-2 punch - Obama didn't say he is the greatest Fed chair yesterday and now we have this assault on his integrity which I think is absolutely ridiculous, I think it is outrageous, I think the man completely had an open book here; it is so wrong to attack Bernanke.

• Lazear - The situation is very different today and it is in large part attributable to Fed’s behavior and so President Obama would be wise to think carefully about replacing Ben; that would probably be not a good move at least to my mind
• Baily - I think there is a good case for keeping Ben Bernanke I think he has done an excellent job in managing the crisis...and that should be taken into account.
• Burnett - they were the chief economic advisors for Presidents Clinton and Bush and both of them in agreement on one thing, Ben Bernanke is doing a great job.

Paul Desmond is the President of Lowry's Research, the oldest technical advisory in the USA. This was a rare treat for us. Lowry's is probably the most widely followed technical advisory in America and we feel grateful to Mr. Pisani for bringing us their views. (We do wonder if Bob Pisani can invite such a great guest on his short segment, why can't the main Fast Money show ever invite guests on this quality. But, that topic is for clip no. 8 below.)

Mr. Desmond expresses his concerns about the quality of the rally since the March low, such as loss of upside volume, the message of their proprietary buying power and selling power indices etc. He said that they the last two Mondays have been 90% downside days (days where 90% of the volume is to the downside) which suggests to him that the uptrend has been broken.

At minute 03:42 of this short clip, Bob Pisani asks the key question and gets a frank, non-consensus answer from Paul Desmond.

• Pisani - Paul, I am concerned about the 90% down days, we have had two of them. In a 90% downside day, there is a lot of selling pressure, doesn't that exhaust the selling interest short term, shouldn't we get a little bit of a bounce after a couple of 90% downside days or is this really a bad sign?
• Desmond - you do typically see signs of rallies lasting from 2-7 days after a 90% downside day, but those are better used to sell into rather than buy into - we think that the market is headed to new bear market lows before it is over
• Pisani - You think we will go back to the March lows?
• Desmond - Below the March lows. The issue is if we could not produce a strong healthy sustained market advance from the March lows, then we are going to have to go to even lower levels to attract stronger demand than what we have had in April.

This is a different view from what we hear on CNBC every day, that the March lows were the definitive bottom of this bear market. We thank Bob Pisani for bringing us a rare window into the thinking of the oldest and most respected technical advisory in America. 

Bill Strazzullo of Bell Curve Trading was also a guest on this segment, Mr. Strazzullo is a more frequent guest on CNBC and his views tend to be more mainstream. We mean no disrespect to him when we focus on the rare opportunity to listen to Paul Desmond.

6. Fed Decision - Bill Gross and Ken Volpert with Erin Burnett on CNBC - Wednesday, June 24, 2:15 pm

Bill Gross of Pimco and Ken Volpert of Vanguard are managers of the two largest Bond funds in the World. Their views are always worth a listen and even more so immediately after the release of the Fed statement after the FOMC (Federal Open Market Committee) meeting. This is a long clip that analyzes the statement released on Wednesday June 23 around 2;15 pm. 

We remind readers on May 28, Erin Burnett had asked Bill Gross "whether there is any rate right now that would entice you into buying Treasuries" and Bill Gross had replied that "somewhere between 3.7% & 4% is an attractive entry point (for 10-year Treasuries)". (see Clip 3 in our article Interesting Videoclips of the Week (May 23 - May 29))

We were happy to see Erin Burnett follow up with Bill Gross regarding this expression of buying interest in this clip.

• Burnett - You had said you were a buyer right around 4 right?
• Gross - Right around 4% for 10-year Treasuries - That is correct and we bought some long term treasuries at 4.71% as well.

7. Talking Technicals - Jordan Kotick & Ralph Acampora with Bob Pisani on CNBC-Tuesday, June 23, 3:45pm

For the past six years, the month of June has marked a turning point in the Treasury market. If Treasuries rallied into June as they did in 2003 and 2005, then they would begin a long sustained sell-off in June. Conversely, if Treasuries sold off into June as they did in 2004 and in 2006-2008, then they would begin a long sustained rally in June.

We wrote about this strange seasonality in our April 25, 2009 article US Treasuries - Will 2009 Be Like 2006-2008 or Like 2003 & 2005?

 It was sort of flattering to see a noted technical analyst like Jordan Kotick describe the same phenomenon to CNBC viewers on June 23 that we had described to our readers on April 25. It feels even more rewarding to see the Treasury market concur with us. In case, you have not noticed, the Treasury market has been on a bull run since its bottom on June 10, 2009. Will the 2006-2008 history repeat in 2009? So far, it has. 

8. Battle of the Bear - Jason Graybill with Melissa Lee on CNBC - Monday, June 22, 5:35 pm

We had not heard of Mr. Graybill or of his firm, Carrett Asset Management. In this clip, Mr. Graybill talks the language Fast Money likes - of coming inflation in America and how US Treasuries would sell off because of America's issuance of treasury debt and the inflation that would arise from it. This is the trade mark Fast Money "Shaap" (the opposite of Mantra, which by definition is benevolent and auspicious).

Frankly, we are disappointed with Fast Money for a number of reasons. First the quality of their guests. Look at the clips featured above and look at the quality of the guests in those clips. Then compare these high quality guests to what Fast Money brings on their regular evening show. Pathetic, in our opinion.

Fast Money would rather bring in celebrity guests like Joe Theisman than an expert who can add real value to their viewers. Now, we are Bollywood Rasiks and we love entertainment. But there has to be a balance and Fast Money has none.

Then there is the issue of integrity. By the end of the week, the message of Jason Graybill was discredited by the bull run in the Treasury markets. But, did Fast Money point that out? Of course not. Why should that surprise us? To this day, Joe Terranova and Fast Money have not admitted the gross error made by Mr. Terranova on March 26, 2009 (see our article CNBC's Fast Money - Playing Fast & Loose With Facts About FED & US Treasuries?).

Our next concern is more subtle and more important. On Wednesday, June 24, Melissa Lee highlighted the 2% gain in TBT, the Double-Short Treasury ETF, and asked Karen Finerman whether she still likes it. Karen Finerman she "likes TBT here". No problem, that is her opinion. The next day, TBT fell 3% when the Treasury Market rallied. But, curiously, Melissa Lee ignored this drop and refused to question Karen Finerman. In fact, the Treasury market rallied big this last week but you would never had found that out by watching Fast Money.

The fact that experts such as Bill Gross, Ken Heebner, Jordan Kotick and other CNBC guests favor Treasuries does not matter in the least to Anchor Melissa Lee and the Fast Money Management. In fact, we do not recall a single episode in which Fast Money made a bullish call on US Treasuries.

Why this aversion? In our opinion, this is because Fast Money trader Karen Finerman is associated with the hate-Treasuries position. Karen Finerman, an elegant sophisticated lady, is popular with the viewers and her ratings are high. We know some female viewers who like the presence of a sedate, dignified woman on this predominantly male show. It follows that Fast Money Management and Anchor Melissa Lee would go out of their way to make sure that Karen Finerman does not look bad on the show.

But we ask whether protecting the reputation or ratings of Karen Finerman is more important to Fast Money than making money for viewers or protecting viewers from losses by sticking with a losing trade. Is this why Fast Money has NEVER invited any big name expert to recommend long maturity Treasuries and thereby refute Karen Finerman’s trading convictions?

Louis L'Amour, the famous western writer, had a favorite phrase "Riding for the Brand", a code of the West. In his novel "North By The Rails", Louis L'Amour describes the dilemma of a cowboy on a rough trail drive who is asked to choose between two warring bosses. Finally, he is asked by the good guy "who is the brand here?". The cowboy thinks for a minute and answers "The Herd".

In the spirit of the American West, we remind Fast Money Management and Anchor Melissa Lee that their  Herd of Viewers is the real Brand of Fast Money and not any individual trader or the trading team. Their show has to be in the best interests of their viewers. Unfortunately, there is no sign yet that Fast Money understands this fact or the lack of journalistic integrity implicit in their behavior. One day, they will. But by then, the TV Brand of Fast Money will have been damaged beyond repair.

9. Situation in Iran - Hillary Mann Leverett and David Frum with Lou Dobbs on CNN - Tuesday, June 23

Hillary Mann Leverett is the CEO of STRATEGA, a political risk consultancy. She worked on Iran and Middle East issues in the George Bush and Clinton administrations. David Frum, resident fellow at the American Enterprise Institute, was a former special assistant to President George W. Bush. If we recall correctly, it was David Frum who came up with the "Axis of Evil" line.

We found the views of Ms. Leverett to be fresh and unconventional. We encourage readers to read the entire transcript of this segment. Below we include some excerpts:

• LEVERETT - I think we really need to first assess this idea that the elections were stolen or somehow rigged. There's no evidence for that whatsoever. I think that's why you've seen a dramatic dwindling fading away of the demonstrators, they initially came out because there were questions, there were irregularities reported in the election.
• LEVERETT - Today you're left with just a hardcore of those who are looking for regime change. That is clearly not something that is supported by the broad populous inside Iran. They do now want to see an implosion of the system, they do not want to see it come down, they want to see gradual opening over time. They want to see more accountability. They do want to see more prosperity. But Iranians are not in a bad state.
• LEVERETT - Well, because there's no evidence that the election was stolen and the president is acting that way, he is for all intensive purposes given up on the idea of the strategy of engagement. He has essentially bought into this policy, which is badly reminiscent of the lead-up to the war in Iraq back in 2002, 2003.
• LEVERETT - He bought into this idea that the regime in Iran, the government in Iran has been delegitimized. It would have been hard enough to deal with them to begin with, and today they are so delegitimized and so depraved that we couldn't possibly deal with that. I think for all intensive purposes he took the engagement strategy off the table today. I think that we are looking at a situation that's going to be very dangerous for U.S. interests in the Middle East.
• DOBBS - To be clear, so I understand, until today, then you believe that the Obama administration was pursuing the correct policy toward Iran? 
• LEVERETT - I think there was division within the Obama administration. I think that Obama had, what I believe, was a correct impulse toward strategic engagement to resolve the problems between the U.S. and the Islamic Republic. But I think there was tremendous opposition to that from within the administration, so I do think the policy was already on the ropes and I think that Obama, today, delivered a death knell to that policy.
• FRUM - Hillary and I have been debating these issues for a long time. I think on this point she and her husband, who are true Iran experts, are very much alone. I don't think there are many very many other people in the world who believe that this election was honest. We don't know whether it was completely stolen or that they just padded the Ahmadinejad votes. We will never know the answer to that. But we know that the opposition can get people in the streets and the government can't.

As we said, read the entire transcript of this segment.

Send your feedback to editor@macroviewpoints.com

Unless you live on Mars or Venus, you know about the events in Iran. The pictures and videos of the massive protests in Tehran are amazing. Reports indicate that an estimated 3 million people attended the demonstration in Tehran last Monday.

As we write this, the situation seems to have entered a stalemate of sorts after the firm stand taken by Iran's Supreme Leader, Ayatollah Khamenei. So it seems to be the right time for us to raise questions and make some comments.

History Rhymes?

The last time such demonstrations erupted in Iran was in 1979. At that time, the demonstrations were against the autocratic rule of Pahlavi, the then Shah of Iran. Like today, those demonstrations were led by idealistic students, professors and the educated urban class who were demonstrating for freedom. Like today, these demonstrations created a wave of pro-demonstrator sentiment in America and Europe, even though Pahlavi regime was friendly to American and European interests.  After all, the sight of young people demonstrating for freedom and against autocratic rule is an inspirational sight.

The demonstrators succeeded in 1979 and the Pahlavi regime fell. The Shah left Iran with his family. Then something strange occurred. The Islamic Clergy who had backed the demonstrators suddenly took over and the demonstrators found themselves governed by an even more dictatorial regime, that of Ayatollah Khomeini. This Islamic regime runs Iran to this day.

Let us look back to the French Revolution. That was another mass uprising led initially by freedom-loving, idealistic young students, professors and the intellectual class of Paris. Their demand was Liberty, Equality and Fraternity. They succeeded in toppling the ruling House of Bourbons. Then something strange occurred. That revolution was then taken over by the Committee of Public Safety led by the infamous Maxmillian Robespierre. The committee began a campaign of terror and ended up executing over 18,000 people, mainly by the guillotine.

The point we make is that revolutions led by young students, professors and the educated urban class rarely fulfill the dreams of the demonstrators. After the dust clears, it becomes evident that some organized entity was the guiding force behind the demonstrators, cheering them on initially and then ruthlessly stomping them into submission after the demonstrators succeed.

These are the parallels we remembered when we saw the demonstrations on TV last week. The demonstrators were clearly for Mir Hossein Mossavi, the opponent of Mahmoud Ahmadinejad. Mr. Moussavi is the product of the same Islamic revolution to which Mr. Ahmadinejad belongs. Mr. Moussavi served as the Prime Minister of Iran from 1981 to 1989 and his rule has been described as ruthless. Frankly, we find it difficult to believe that Moussavi is a candidate who will lead Iran to a truly democratic, reformed future.

So we find it a little difficult to cheer for the young students and intellectuals that are demonstrating in Tehran. We adore their passion but we do not understand their end game.

Rigged Election?

Clearly, there is something strange in the final election count. We find it very difficult to believe that Ahmadinejad won the election by such an enormous margin. But we also find it hard to believe that a fraud of such magnitude could be carried out in secrecy by a few people. As Ayatollah Khamenei asked in his sermon on Friday, June 19 "Perhaps 100,000 votes, or 500,000 votes, but how can anyone tamper with 11 million votes?"

We find this question persuasive. But then, we spent our childhood in Mumbai, the urban capital of India. During our formative years, we saw popular election campaigns run in Mumbai on modern viewpoints. But, these idealistic campaigns always lost. The lesson drummed into us was that in India, cities and urban centers do not count. Only the rural vote determines the election. As the widely praised recent Indian election demonstrates, the rural population votes in a way that confounds the urban pollsters and commentators. They also respond to material promises. It is reported that Sonia Gandhi campaigned in North India on the promise of free rice to rural villages.

We remembered this when we read that Ahmadinejad had campaigned extensively in rural Iran and promised the voters free potatoes. In contrast, Moussavi seems to have restricted his campaign to the urban centers. Ahmadinejad also campaigned on the promise to end corruption, which is always attractive to the poorer sections of any electorate. We are also able to believe that Ahmadinejad was a more attractive candidate for the religiously devout voters than Moussavi.

We are prepared to believe that Ahmadinejad won the rural vote, the religious vote and the poor vote while Moussavi won the young, urban intellectual vote. So, in our opinion, the election comes down to determining the size of the rural, devout, poor vote and the size of the urban, intellectual vote. We do not have the facts to make this judgment ourselves.

Power Players in this fight

The Islamic regime in Iran is a complex organism with competing centers of power and influence. The Supreme Leader himself is actually appointed and monitored by an Assembly of Experts. Then there is a Guardian Council, the Judiciary and the Parliament. The President is actually a lower level figure in the power hierarchy. The partial map below indicates the complexity.

 (sources - US State Dept & Wall Street Journal)

The "reformist" candidate Moussavi is very much a part of this power hierarchy. It appears clear that Moussavi has been backed by the second most powerful player in this hierarchy, Ali Akbar Hashemi Rafsanjani, the Chairman of the Assembly of Experts, the body that appoints the Supreme Leader. Mr. Rafsanjani served as the President of Iran from 1989 to 1997. He lost narrowly to Mr. Ahmadinejad in the 2005 election. That he opposes Ahmadinejad is no secret and the contempt seems mutual. Mr. Rafsanjani has much to fear from a newly elected Ahmadinejad.

There are informed analytical reports that the current struggle in Iran may have evolved into a power struggle between Mr. Rafsanjani and Ayatollah Khamenei  with Ahmadinejad as the point of dispute. This may be why Ahmadinejad is nowhere to be seen or heard in this mêlée.

If this is true, then Rafsanjani and Moussavi seem to have made a major tactical mistake. They have elevated a smaller, limited battle against Ahmadinejad into a test of the Supreme Leader's power. No Supreme Leader in any country and in any regime can survive after losing such a test of strength.

So we are not surprised to see the Supreme Leader Khamenei come down hard on protesters. He had no other choice. Mr, Khamenei warned that the demonstration leaders "would be responsible for bloodshed and chaos" and added "If they don't stop, the consequences of the chaos would be their responsibility."

This does not seem to be empty rhetoric. Media reports indicate that all the branches of the powerful Islamic Revolutionary Guard Corps (IRGC) has been placed on high alert and the IRGC Special Units, known for their iron fist tactics, have taken over local law enforcement in Tehran.

In his sermon, Ayatollah Khamenei made this protest an issue of national sovereignty and accused America-England for fomenting the protests. "They thought Iran is Georgia" he said, adding, "Their problem is that they don't know this great nation yet."

Consequences

This episode is a setback to the Obama Administration in our view. The Obama Administration had decided to work with the Iranian Government to come to an understanding of sorts. This was a smart decision because a neutral Iran could ease America's problems in both Iraq and Afghanistan.

The US Military is planning to withdraw from urban centers in Iraq and decrease its involvement in Iraq. This was a major commitment of Candidate Obama and President Obama wants to fulfill his promise. Besides, the US troops are needed in Afghanistan and Pakistan for the major fight against the Taleban.

A hostile Iran could create severe problems in Iraq. The Iraqi Prime Minister Mr. Al-Malliki was among the first to congratulate Mr. Ahmadinejad on his victory. He knows that his Iraq needs Iranian support. A neutral Iran is no less critical in the battle against the Taleban. This was an easier deal because the Sunni Taleban is as great an enemy of the Shia Iran as it is of America. But, after the violent protests in Tehran, all bets might be off.  

Pressure is also mounting on President Obama to take a hard line on Iran. No one seems to explain how America will gain from such a hard line but this is an issue of Brand America, the brand that has favored democracy and aspirations of freedom.

This situation makes it harder to reach any accord on the nuclear issue. All parties in Iran will now be determined to show that they are as patriotic as Ahmadinejad and nothing is more patriotic than working to get a nuclear weapon. In the west, Ahmadinejad is a lightening rod and the Neocons in America & Israel will be gunning for a strike on Iran. 

Paradoxically, the greatest danger might come from the lack of clarity about President Obama. The Iranian regime understood President Bush. It is not clear that they know President Obama. For that matter, America does not know President Obama. No one in the world knows how President Obama would react under severe pressure and therein lies the greatest danger of this crisis. 

So far, President Obama has reacted to the Iranian situation with nuanced speech and a delicate strategy. We hope that continues to work.


Send your feedback to editor@macroviewpoints.com.

"La parole nous a été donnée pour déguiser notre pensée." - Speech was given to us to conceal our thoughts. - Talleyrand

Nicknamed as the Prince of Diplomats, Charles Maurice de Talleyrand-Périgord is regarded as one of the most versatile and influential diplomats in European history. Talleyrand served as a minister to the House of Bourbons before the French Revolution, then to Napolean in his reign and then to the new Bourbons after the fall of Napolean.

This is an amazing accomplishment of survival and success. We are certain it is due to Talleyrand’s famous maxim quoted above. Talleyrand was very well compensated for his skills by the various governments and parties that sought his help. The picture below is of Chateau de Valencay which he bought in 1804. His Paris residence on the Place de la Concorde was sold to James Mayer de Rothschild in 1838 and is now owned by the American Embassy. 

 
(Talleyrand's Chateau de Valencay) (Source wikipedia)

In contrast to respect for his skill, Talleyrand's accomplishments have not been judged kindly by history. In fact, in retrospect, historians have concluded that his treaties and successes sowed the seeds of World War I.

Bernanke-Greenspan

In our opinion, the modern day version of Talleyrand was Alan Greenspan, the Fed Chairman, appointed by President Reagan in 1986. Dr. Greenspan proved to be a successful and respected Fed Chairmen under the successive administrations of President Bush (senior), President Clinton and then President George W. Bush. When he retired in 2006, Dr. Greenspan was a globally revered figure. 

During this long tenure, Greenspan had to speak at length and often. He understood the perils of being understood by the various constituencies, the Media, the Congress, the Executive Branch and Global Investors. So to protect himself, Greenspan developed GreenSpeak, a way of speaking that soothed everybody, impressed many but revealed nothing of his thoughts and plans. In other words, Greenspan became the ultimate master of the art of speaking to conceal his thoughts. Talleyrand would have been astounded and knelt before Greenspan, his master. 

After his retirement, Dr. Greenspan became a wealthy man by writing his memoirs, by consulting with large financial institutions and via lucrative speaking fees.

Unfortunately, like Talleyrand, Mr. Greenspan's tenure has begun to be judged negatively. It is now widely acknowledged that Greenspan's easy money policies might have sowed the seeds of the Credit Bubble and may have caused the Housing Bubble. 

The approach of the current Fed Chairman, Dr. Ben Bernanke is diametrically opposite of the Greenspan-Talleyrand maxim. Dr. Bernanke came to the Fed determined to make the Fed's thoughts and actions transparent to investors and the public. He has succeeded in his mission. 

Dr. Bernanke's accomplishments have been phenomenal. He has single-handedly prevented a depression in America and rescued the American (& global ) financial system from collapse. In our opinion, Dr. Bernanke has been a great Fed chairman and might end up being the greatest Fed chairman if reappointed to a second term.

Yet, Ben Bernanke remains unrespected and unapplauded. The reason in our view is simple. Bernanke succeeded in his mission to make his thoughts and his actions transparent. That seems to have doomed him. The sad reality is that what we understand, we do not respect. When we understand something, we can easily debate it. We can imagine scenarios under which it would not work, however unrealistic such scenarios might be.

In our opinion, President Obama owes the success of his first six months to Dr. Bernanke. Yet, President Obama has not praised Dr. Bernanke in public and he has abstained from expressing his trust in Ben Bernanke.

So we are afraid that while history will judge Dr. Bernanke as a great Fed Chairman, he will not be reappointed by President Obama. That will be America's loss.


Bush-Obama

The tale of Talleyrand applies equally to President Bush and President Obama.

President Bush was probably the most direct and the most transparent President in recent times. You may have liked or disliked George W. Bush, but you knew exactly where he stood. Bush was the ultimate anti-Talleyrand because he apparently believed that speech was given to us to simplify our thoughts and to speak them without regard to their reception by the audience. Only George W. Bush could make a lovely idea seem terrible. Because people understood Bush and disliked him, they berated Bush for being dumb at best and idiotic at worst.

In contrast, President Obama is a brilliantly soothing speaker. He has the rare talent of making his actions seem very benign and positive. Look at what he has accomplished in such a short time.

President Obama has centralized power in his White House to an unprecedented extent. There is no policy that the Obama White House does not control completely. He has appointed several czars that report to his White House team thereby reducing his cabinet to being royal sycophants. He has even marginalized Secretary of State Hillary Clinton by his appointment of czars for every important region. Last week, President Obama recalled Dennis Ross from the State Department to the White House to advise him personally on Iran.

Tim Geithner, the Treasury Secretary, is no more than a aide to President Obama. It is the Obama White House that makes Economic-Treasury policy and Geithner is sent to justify it to the Congress and the media. The Obama White House decided on and implemented the GM-Chrysler policies. We cannot think of a single material thing that Obama has delegated to his cabinet.

President Obama is in the process of making massive changes to the American system, changes that America will live with for decades. Yet, this exercise has been done softly and with a wonderfully benign, hopeful public message. Like Dr. Greenspan, he has lulled America into soft, sweet complacent belief that everything is in good hands and will only get better. Had George W. Bush even attempted a fraction of the power grab of Obama, he would have been castigated as a dictator by every newspaper and every TV anchor in the world.

However, there are nascent signs that the rehabilitation of George W. Bush has begun. Old critics like Tom Friedman of the New York Times have begun looking at the Iraq war as a limited success. In his recent article "Winds of Change?", Mr. Friedman quotes Michael Young, the opinion editor of The Beirut Daily Star as saying "Bush had a simple idea, that the Arabs could be democratic, and at that particular moment simple ideas were what was needed, even if he was disingenuous.....It was bolstered by the presence of a U.S. Army in the center of the Middle East. It created a sense that change was possible, that things did not always have to be as they were."

Friedman then gives his own views of Bush's Iraq policy “There are a million things to hate about President Bush’s costly and wrenching wars. But the fact is, in ousting Saddam in Iraq in 2003 and mobilizing the U.N. to push Syria out of Lebanon in 2005, he opened space for real democratic politics that had not existed in Iraq or Lebanon for decades.”

Our own views of the Iraq involvement are reflected in our July 2008 article Iraq & Tibet - Strategic Will of The American and Chinese People. 

Recent polls show some nascent signs that the Obama magic has begun to wear a little thinner. Soon, we think, President Obama will have to make some tough choices and articulate these to the American people, We sincerely hope that when he does so, he does it simply and directly. History has proven that the Talleyrand approach eventually fails and fails big.


Send your feedback to editor@macroviewpoints.com.

Editor's Note: We are indebted to Mr. Raj Mundhe, an avid reader and an old friend, for bringing the Wall Street Journal article to our attention. Mr. Raj Mundhe, a noted Financial Advisor in metro Boston, has helped this blog on earlier occasions as well. For that, we thank him.


During our visit to Mumbai last December, we kept hearing the phrase America's Sub-Prime or Housing Bubble. When we tried to explain to our friends that it was not a subprime or housing bubble and more importantly it was not America's bubble, no body believed us.

What was our point? It was a credit bubble created by a massive expansion of money. This money flooded one asset class after another creating a series of bubbles all over the world. In America, it created bubbles in sub-prime, prime, home-equity loans, commercial real estate and in corporate loans. Globally, it created housing bubbles in the UK, Spain, Ireland, and Emerging European countries like Hungary and the Balkans. It also created bubbles in trophy assets such as Art.

Now a recent Wall Street Journal article points out that this money also created a bubble in Bollywood. The article by Eric Bellman titled Slump Deflates Bollywood Bubble describes how the chill in global financing has stalled India's recent film making boom. Perhaps, now our friends will believe us.

Let us be clear. Bollywood is NOT and NEVER was a bubble. Bollywood has produced superb films for nearly 8 decades without any bubble money. These films were made on regular size budgets and almost always made money.

But in 2007, bubble money discovered Bollywood. According to the WSJ article, "more than $700 million from abroad that was invested in Indian film and broadcasting through mergers and acquisitions last year, up five-fold from the previous year". As the article describes, "In recent years, international studios, hedge funds and Indian media companies invested as India's growing middle class watched more movies, bought more DVDs and paid for more cable and satellite television channels. Sony Pictures Entertainment Inc., Walt Disney Co., Reliance ADA Group and UTV Motion Pictures were visible in the market."

The peak of this bubble was the first Hollywood production of a Bollywood movie "Chandni Chowk to China",  a Bollywood kung fu movie set in China. The movie was a bust and barely made money after sale of DVD and Television rights. The article quotes Rohan Sippy, the producer of Chandni Chowk to China as saying that he had never seen so much money sloshing around Mumbai over the past few years. "It was crazy," Mr. Sippy says, "Input cost went through the roof and actors were asking for five times what they were taking earlier."

     
     (source - WSJ)                                             (A scene from Chandni Chowk to China)


Now that the global credit bubble has burst, so has the influx of money into Bollywood. According to the WSJ article, " So far this year there has been only $25 million in foreign investment through mergers and acquisitions". As a result, "this year has seen the release of 22 Hindi films compared with more than 100 Hindi films in the same period last year", the article states. According to this article, Indian film industry could have its worst decline in revenues in a decade.

Our view is that Eric Bellman is wrong in his title. The slump has not deflated Bollywood, only the crazy bubblicious interest of Hollywood money in Bollywood.

Frankly, we are happy. Bollywood will thrive regardless of the bubble. Unlike Real estate, the strength of Bollywood is in its people, its talent. Bollywood will go back to making classic Bollywood films in the classic Bollywood way, films that mesmerized audiences like us and films that made money.

Say good buy to the Bubble and say hello again to the old Bollywood.


Send your feedback to editor@macroviewpoints.com

In our May 2 article Wall Street Journal vs. Financial Times, we wrote about the Limousine Liberals of the 1980s.  "In those days, it was fashionable to praise England for being a "cultured" society. We felt then and we know now, that "cultured" was a code-word for absence of colored people and colored influences. In those days, racial relations in New York were not what they are today. So, the Limousine Liberal sub-culture fashioned its own code-word for praising England for its racial segregation and deriding America."

To our surprise, we found one such class-obsessed limousine liberal at the Wall Street Journal. His name is Thomas Dyja and he has written an article bemoaning the loss of "Cricket’s spiritual core". We find this to be really a low quality article, an article we expect to find in the Financial Times of London rather than in the Wall Street Journal. We tell you why below.

Mr. Dyja begins his article the way a proper American Anglophile would.  "Lord's, the "home of cricket," in St. John's Wood in northwest London, is Cooperstown, Augusta National and old Yankee Stadium all wrapped into one. ..Around here, "old money" can date back to the Tudors. Lord's is the official keeper of cricket's relics and its history, the game's spiritual core."

So what is England's problem? Dyja explains that his cherished Lord's is "no longer where the money is, or the power -- India has those now. A global mutiny has swept the cricketing world, pitting the realities of the marketplace against the purity of the game, and it all centers on a faster, louder, harder-hitting version called Twenty20, whose World Cup is being played here at the leafy, proper Lord's."

To make sure every reader sees how leafy, proper Lord's is being defiled by rowdy crowds, he inserts a photo of Indians celebrating at Lord's.

  
(Dyja's caption - The crowd gets rowdy as England plays India at Lord's last week.)


Dyja then describes how Indians are further damaging the spiritual core of cricket - "To satisfy 1.2 billion people who suddenly couldn't get enough of T20, the Board of Control for Cricket in India (BCCI) launched a three-week tournament called the Indian Premier League (IPL). A Rotisserie-style player auction was held where the eight franchise owners, ranging from India's Reliance Industries Ltd. to Bollywood stars, threw hundreds of thousands of dollars (and in some cases millions) at the game's biggest names for three weeks of work."

Why should this impact England? Dyja explains that "Considering that the very best cricketers in England don't get that for a whole year, the IPL upset the economic balance of global cricket."

Now we understand why Perry Mason spoke so disparagingly of Americans who spoke with a British accent, of Americans who wore cultivated British airs in the 1950s to proclaim their "cultured status" over what they considered to be Ordinary Americans. Thomas Dyja seems to belong to that type.

Those pretentious Americans did not understand that America was a land of the future and it was galloping towards to a great global role while class-obsessed England was going down a path to mediocrity.

Like these spiritual ancestors of his, Thomas Dyja does not understand that India and Twenty20 rescued Cricket and positioned it on a path to unprecedented success. India combined the magic of Cricket with the panache and unbridled joy of Bollywood creating one of the greatest sports franchises in the world. The result? Today, we see that Brazil and China are building Cricket teams and investing in the game. 

Perhaps it is we who do not understand Dyja's sadness. But, then we are after all rabble. Of course, unlike Dyja, we are proud of it. 

Dyja ends his article with a quote from an author named O"Neill that reads "This is (as Mr. O'Neill puts it), "the moment when the colonized element finally has its vengeance on the main."

Dyja does not seem to recognize that his publisher, the Wall Street Journal is an American institution and therefore, like us, a part of the colonized element. Now you understand why we would have expected such an article from the London Financial Times but not the Wall Street Journal.

We do not wish to be unfair to Mr. Dyja. So, in the tradition of this Blog, we invite Thomas Dyja to send us his response. We will print it verbatim.


Send your feedback to editor@macroviewpoints.com.

Editor's Note: In this new series of articles, we include important or interesting videoclips with brief comments. Our Web Software does not permit embedding of the clips into our articles. So we shall have to be content to include the links to the actual videoclips.

This is an article that expresses our personal opinions about comments made on Television and in Print.  It is NOT intended to provide any investment advice of any type whatsoever.  No one should base any investing decisions or conclusions based on anything written in or inferred from this article. Investing is a serious matter and all investment decisions that should only be taken after a detailed discussion with your investment advisor and should be subject to your objectives, suitability requirements and risk tolerances.

Two weeks ago, we featured a CNBC Hall of Memories clip of Jim Rogers and Larry Kudlow trash talking the US Dollar and the abilities of the Fed Chairman, Ben Bernanke. Then we asked the question whether that giddy segment would end up signaling the bottom in the US Dollar. So far, it has.

Wednesday June 10 was the day of the 10-Year Treasury Auction. This was a big event and CNBC devoted a great deal of coverage to this auction. Predictably, the coverage was about how long maturity US Treasuries were a terrible asset class to own because the deluge of debt offerings from the Treasury Department. Even Jim Cramer got into the act by heaping scorn on bond buyers by proclaiming "Let them trade bonds, I am buying a building."

James Grant, Editor of the Grant's Interest Rate Observer, was invited as guest on CNBC Squawk Box on June 10 to discuss his anti-Treasuries views. Jim Grant has termed CNBC as Bubblevision in the past. So CNBC's David Faber asked Anchor Joe Kernan why they invited some one so critical of CNBC. Joe Kernan demurred but we can guess. Like Jim Rogers, Jim Grant is very negative on long term US Treasuries and that made him acceptable to CNBC Squawk Box.

We ask whether CNBC's anti-Treasury hype on June 10 would end up signaling a peak in long maturity Treasury Rates. So far it has.

This week, we introduce a videoclip that is not investment related but is newsworthy because of an unusually strong and innovative defense by a wife of her husband.

We feature the following clips in this article:

1. CNBC Anchor Larry Kudlow berating CNBC's knowledgeable and honest reporter Diana Ohlick for being factually straightforward and firm - June 19
2. Charles Biderman with Maria Bartiromo - June 19
3. Fast Money Traders discussing the above Charles Biderman interview - June 19
4. Gary Shilling discussing possibility of long term Deflation in America with Maria Bartiromo - June 16
5. Marc Faber discussing certainty of long term Hyper-Inflation with Erin Burnett - June 19
6. Jordan Kotick discussing a Summer Correction with Maria Bartiromo - June 18
7. Larry Summers with Maria Bartiromo - a Three Part Interview - June 17
8. Mrs. Ahuja claiming her Bollywood actor husband, Shiney Ahuja, was "framed" and offering an strong and unusual defense.

1. Has Obama's Housing Bailout Gone Bust? - Anchor Larry Kudlow berating Reporter Diana Ohlick simply for stating facts - June 19, 11:20 am

We have written in the past that CNBC has excellent reporters who are very knowledgeable, fair in their presentation,  firm in their convictions and unafraid of the anchors who try to browbeat them. We have praised Rick Santelli, Phil LeBeau and Diana Ohlick for these qualities. 

We are delighted to state that Diana Ohlick justified our trust by standing up to browbeating anchor Larry Kudlow and responded to his attacks with firm statement of facts. We encourage all readers to watch this clip. The first exchange between Kudlow and Ohlick begins at minute 02:18 of the 07:13 minute clip.

• Ohlick - Larry, I got to disagree there.

Larry Kudlow tries to mock Ohlick but Ohlick continues.

• Ohlick - 5.5% is where most people refinanced or bought their homes during the housing boon. If they need to refi to a lower rate, it has to be under 5%.
• Kudlow - You don't know that
• Ohlick - I do know that. I know it from the facts.
• Kudlow - You are misleading people if you say that.

Then Kudlow begins speaking to others. When Kudlow begins to hype the housing sales in Southern California, Ohlick corrects him and lays out facts and her views. So Kudlow attacks Ohlick again (minute 06:30 of the clip).

• Kudlow - You can look at the glass half-empty as much as you want
• Ohlick - I am not looking at the glass half-empty, I am looking at it clearly.

As we said, we are proud of the courage and steadfastness of Diana Ohlick. It is this viewer's opinion that Larry Kudlow was misleading viewers and Diana Ohlick was presenting facts. But then, Larry Kudlow has transformed himself from an economist to a politician. That is his choice. It is also his choice to present a hyped version of facts and events to meet his politico-economic convictions. But, as CNBC viewers focused on getting investment value from CNBC, we think Mr. Kudlow should restrict his biased views to his 7:00 pm show. As an anchor of a 11:00 am show during market hours, Mr. Kudlow should behave in an unbiased, thoughtful manner for the benefit of the show's viewers. 


2, Tracking Market Flows - Charles Biderman with Maria Bartiromo - June 18, 4:28 pm

Charles Biderman, CEO of TrimTabs Research, has the best market data on the street. His views are highly respected and followed. This is his 3rd interview of 2009 with Maria Bartiromo. Like the previous two, this five minute clip is a must watch.


3. Are We Just Suckers? - Fast Money Traders discuss Charles Biderman Interview - June 19, 5:15 pm

The fact that Fast Money devoted a segment to the Biderman interview shows the respect of the trading community for Mr. Biderman. Not to be picky, but we wish to point out that Fast Money Trader Guy Adami seems to have misunderstood Mr. Biderman's point. Mr. Biderman was talking about Insiders not buying their company' stock for their personal account. Mr. Adami incorrectly interpreted this as Companies not buying stock for their Corporate account, a completely different thing. 

We want to give a shout out to the entire Fast Money Trader Team for warning viewers about the possibility of a correction in stock prices. Guy Adami was the initial leader and the rest of the team has followed his example by warning viewers. Joe Terranova has been very good in asking viewers to get off the Energy and Natural Resources trades before this week's correction. Well done Fast Money. This viewer thanks you.


4. Pricing Pressures Ease - Gary Shilling and Steve East with Maria Bartiromo - June 16, 3:41 pm

This is a segment devoted to discussing the prospect of inflation or deflation in America. Both experts agree that currently America faces deflation. Then Gary Shilling goes farther and states his view that America faces the prospect of Chronic Deflation for the next 10 years. This is a must watch clip for all serious investors.

What we found amazing is that a CNBC Anchor tolerated this viewpoint and actually let Gary Shilling state his case of long term deflation without unduly interrupting him. But then, we are becoming fans of this balanced, rational Maria Bartiromo. She also seems to have accepted the current state of US Economy. We know this because she mocked the notion of green shoots in a conversation with her colleagues on her show. 

We have a great deal of respect for Gary Shilling. It was Dr. Shilling who gave us his data and showed us that 25 Zero-Coupon Treasuries have dramatically outperformed S&P 500 since 1982. For more details, see our August 2008 article Are CNBC Anchors on a Mission Against US Treasuries? - A Viewer's Perpsectives.


5. The Gloom & Doom Trade - Marc Faber with Erin Burnett - June 19, 2:48 pm

Didn't we know it? When Maria Bartiromo does an interview about Chronic Deflation in America, then Erin Burnett would do an interview about Hyper-Inflation in America. (If you do not get the connection, read our April 18 article CNBC's Bartiromo And Burnett - The Rivalry Continues And Evolves Into A Proxy War?)

Marc Faber is a well-known commentator and his Gloom, Boom & Doom report is widely read around the world. We encourage all readers to listen to this interview.

Unlike Gary Shilling who makes his points softly and almost diffidently, Marc Faber favors a more bombastic style and flamboyant predictions. Gary Shilling has a superb track record of being correct on the US Economy. Marc Faber unfortunately has a more spotty track record. 

At the end of the interview, Marc Faber says that he does not like US Real Estate. Then he adds, "I would rather be in real estate than in 30-year US Government Bonds".

The same Marc Faber says in his June 15 interview in Barron's - "I would short US Treasury Bonds when the yield declines to 2.8% to 3% on 10-year notes.". Hmmm! If the 10-year note yield were to decline from today's 3.78% to 2.8%-3%, the price of the 30-Year US Treasury Bond would go UP by about 15%-20%. Seems like a nice trade to us and seems like in the short term, Marc Faber is actually bullish on 30-year treasuries and not bearish as he said to Erin Burnett. 

Another example of an expert making anti-Treasury comments on Erin Burnett's show while saying something different to other journalists? The other example was that of Bill Gross on May 21, 2009 in his segment Will US Eventually Lose AAA Rating? 


6. Signs of a Summer Correction - Jordan Kotick with Maria Bartiromo - June 18, 4:49 pm.

Jordan Kotick is a well-known technical analyst and he has been right on the markets for the past several months. So, we present his views about a summer correction to our viewers. Briefly, Mr. Kotick thinks that a 10%-20% correction in the stock market is likely and he thinks money will rotate from stocks to bonds during this correction. He also thinks that the US Dollar will get stronger. Larry Kudlow, are you listening?

We have praised Maria Bartiromo for bringing on her show experts like Gary Shilling & Don Galante who are bullish on long term Treasury bonds, especially the 30-Year Treasury Bond. But, we know that Maria Bartiromo is a CNBC anchor and the anchor who was the biggest cheerleader for equities during the boom years. So we were not surprised when Maria Bartiromo refused to discuss Mr. Kotick's comments about Bonds being a good buy and when she redirected the conversation to other types of equities. 

Come on, Ms. Bartiromo! It is OK to talk about buying US Treasury Bonds and it is OK to ask your viewers to consider buying Treasuries. Try it. You might even like being bullish on Treasuries. 


7. Larry Summers, National Economic Council Director, with Maria Bartiromo - June 17

This is a three-part interview. Larry Summers is the National Economic Council Director and a confidant of President Obama. So his views are important to the global markets. 

One On One With Summers, Pt 3 - 4:16 pm - Maria Bartiromo, to her credit, asks the trillion dollar question about the desire of Mr. Summers to become the Chairman of the Federal Reserve by replacing the current Chairman Ben Bernanke in 2010. Larry Summers refuses to give a direct answer. This question and answer is worth watching.

Summers On Regulation Revamp - 3:17 pm  - Mr. Summers talks about the new financial regulations. 

One On One With Summers - 2:00 pm - This short clip is notable not for its content but for its time slot. We find it interesting that the Summers interview with Maria Bartiromo was launched on Erin Burnett's show. As a result, Erin Burnett and Maria Bartiromo end up speaking to each other and actually exchanging pleasantries. Our is an evidence-based blog and so, with this clip, we have to shelve our series on these two anchors that included articles like CNBC Stars - Bartiromo and Burnett - A Bollywood Rasik's Perspective.
 

8. A woman can rape too - Mrs. Ahuja in defense of her husband Shiney Ahuja - Times of India clip

Shiney Ahuja is a well-known Bollywood actor. From Indian media reports, we learn that Mr. Ahuja has been accused of rape by their young maid. Mr. Ahuja, we understand, has claimed that it was consensual. Mrs. Ahuja has stepped forth and strongly defended her husband. Mrs. Ahuja has claimed that her husband was framed. She said she has known him for 15 years and he is incapable of such a terrible act. 

So far, Mrs. Ahuja has followed the noble example of wives who loyally and resolutely step forward to defend their husbands. But as this clip shows, Mrs. Ahuja has now mounted an unusual defense. Our words cannot do justice to this news conference and this clip must be watched to get the full impact (http://timesofindia.indiatimes.com/A-woman-can-rape-too-Shineys-wife/videoshow/4672501.cms).

Below we include Mrs. Ahuja's remarks at the beginning of the clip.

• "Rape as a word is a very heinous crime. In today's world, rape cannot just be committed by a man, it can also be committed by a woman. We all know that and I am sure our judiciary system as it evolves and as it supports(!),  will come out with laws that protect both the genders. That's all I have to say."

We do not know the facts and we might stepping out of our comfort zone by discussing this topic. But, we confess that we admire Mrs. Ahuja's courage and determination. Watch her face angry questions after making this statement.


Send your feedback to editor@macroviewpoints.com 

• "Jeffrey Sonnenfeld Of Yale & Erin Burnett Of CNBC - Read The China-India Article in Foreign Affairs" - has jumped from 9th place to 1st place.
• "Flagrant Foul on Mark Haines and Erin Burnett - Their Conversation about India's regard for "sacred cows"- has moved from 8th place to 7th place.
• "The Karna-Arjun Battle in The Maha-Bharat - Beyond Adjectives" has entered the Top 10 list in the 10th place.
  

A breakdown of the Top 10 list by topic is as below:

• India Related - 5 Articles
• Geo-Strategy - 3 Articles
• CNBC Related - 2 Articles

One day, I got the happy news that my friend Bob had become the proud father of a baby girl. After two boys, Bob really wanted a girl. So I expected Bob to be very happy when I went down to his office to congratulate him.

Instead, I found Bob scowling to himself and crumpling papers on his desk. So I asked him what the problem was. Bob explained that he was very happy at first and then he started thinking about the day when boys would come to his house to date his daughter. Bob made some very nasty comments about what those boys would want to do to his sweet daughter and swore about what he would want to do to those boys.

This sounded insane to me because his daughter was not even a day old that time. I told him so. He said he knew he was being nuts but that he simply could not stop thinking about the day a boy would knock on his door to date his lovely innocent daughter. I can still see scowling Bob’s face to this day.

I thought of this tale when I watched this week's crazy CNBC segment with Jim Rogers and Larry Kudlow*. In this segment, these two intelligent and seemingly sane people rant wildly about how hyperinflation would arise in America and how it would destroy the US dollar. It does not matter to them that there is no sign of inflation anywhere in real America, America which again lost over 340,000 jobs this month, America in which real Americans (unlike CNBC Anchor Guzillionaires) are seeing their incomes being squeezed and their credit lines being cut. But, it does not seem these facts matter to them because their anti-inflation phobia reached a messianic fervor in that CNBC segment.

It occurred to me that all these years I had done an injustice to my friend Bob. He was so much saner than these guys.  After all, it was a fact of life that his daughter would grow up to an age where she might want to date. But Inflation? It has not even been conceived yet. And there is no guarantee that it will. Look at Japan. They have been trying to conceive inflation for the past 20 years without success even after pouring massive amounts of money and stimulus. 

In addition, my friend Bob is a normal father and not a Talebani. He did not keep his daughter at home like the Taleban do. He did not force his daughter to wear a head-to-toe veil to protect her from the wandering eyes of boys. I feel fairly certain that Bob would allow his daughter to date when she grows up to that age.

That is not true of the Inflation-Taleban like Jim Rogers, Larry Kudlow and their fellow inflation-jihadis at CNBC.

The Pakistani Taleban have done this for many years. As the mountain snows melt, the Pakistani Taleban come out of hiding and begin their violence. When their campaign is over, they withdraw leaving behind an impoverished society and a damaged population in their wake.

The Inflation-Taleban have done this for the past 3 years. Since 2007, every April they come out of their winter hibernation and begin their campaign of exploding commodity prices, destroying the value of the dollar and violently selling off US Treasuries. When they withdrew in 2007 and 2008, they left behind impoverished portfolios and a damaged economy in their wake.

For years, American Presidents have requested moderate Pakistanis to speak up against the Taleban amongst them. Here we follow their lead and request moderate CNBC Anchors to speak out against the Inflation-Taleban amongst them. Are you listening, Jim Cramer? Or is being a "team player" more important to you than safeguarding the portfolios of CNBC viewers?

The Pakistani leadership is finally suffering the consequences of tolerating and supporting their Taleban for short-term tactical gains. Will CNBC Management eventually suffer the consequences of tolerating and supporting their Inflation-Taleban for short-term ratings gains?

Note:
* See the first clip in our article Interesting Videoclips of the Week (May 30-June 5)
**Those who do not believe us about inflation should get and read the April 9, 2009 report by Goldman Sachs  titled “Hyperventilating About Hyperinflation”.


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About 18 months ago, a Chinese graduate student we knew was killed in a race-based violent incident near Columbia University. This was a very bright, personable young man of great promise. His senseless death appalled the Chinese Student community in Columbia and galvanized the University into taking steps.

The highest officials at Columbia got involved; they worked actively with the US State Department and obtained a visa for the student's parents within 24 hours. The University flew the parents to New York City for memorial services for the fallen student, services that were arranged by Columbia University. 

In addition, Columbia officials worked with the Chinese student community to create awareness as well as to develop solutions. The University also worked with the Police Stations near Columbia to ensure safety of the Chinese student community.

Recently, the Indian student community in Australia has been subject to violent, racist attacks by native Australians. The attacks have been persistent and savage, especially in Melbourne. From the media reports we read, the Australian Universities have paid very little attention to these attacks and have not taken any serious steps.

The problem got so severe that about the Federation of Indian Students of Australia organized a protest rally in Melbourne. Media reports suggest that 200 Australian cops met the rally and meted out fairly violent treatment to the peaceful protestors.*

The continuing racial attacks on Indian Students and the inaction of the Australian authorities have inflamed feelings in India. The Bollywood legend Amitabh Bachchan declined to accept an honorary degree from Brisbane University in Australia and Amir Khan, another major Bollywood figure, has raised his voice in protest as well.

The Chinese Government has raised its concerns about the safety of Chinese students in Australia. There are about 130,000 Chinese students studying in Australia. 

This is not just a racial issue but a major economical issue for Australia. The  Australian "Overseas Student Industry" has revenues of $15.5 billion Australian dollars and is Australia's third largest export industry. So, Australia is worried that crippling sanctions by Chinese and Indian Governments could damage this industry. We are delighted that China and India are working together on this issue.

When we read the media stories on this subject, we again realized how America differs from Australia and other Anglo-Saxon countries like England. It also shows that the human rights beliefs and standards of American Universities like Columbia are far, far superior to those of Australian Universities.

In our opinion, the Australian Society and Australian Government as a whole have tacitly accepted racism as a part of their official policy. This tacit sanction is akin to Pakistan's acceptance of the Jihadi element in its society.

As far as we are concerned, we have begun an immediate boycott of Australian products and will maintain this boycott until Australia takes corrective steps and pays substantial damages to the families of students killed in Australia. We urge all readers of this blog to support this cause by boycotting Australian products until this issue is resolved.

This reminds us of our May 2, 2009 article Where Are India's Bill O'Reilly, Sean Hannity, Joe Scarborough? An Indian Bill O"Reilly would have galvanized Indian society around this issue in a way timid Indian Anchors simply cannot. The loser once again is Indian Society.

This issue again brings to fore the essential differences between Australian and Indian Society, especially the educated middle-class segment of Indian Society. After all, the vast majority of Indian students in Australia come from this segment. These students are taught to be nice, polite, to concentrate on their education and to not get involved in any disputes. This makes them ideal students but unfortunately it leaves them clueless about dealing with racism, hate and violence.

A couple of years, a similar problem had erupted between the Indian Cricket Team and the Australian Cricket Team. At that time, an Australian writer had said to an Indian commentator (as reported in bbc.com) that "Indian players were good, middle class boys whereas the Australians were a team of "goondas" or  a thuggish group of nasties". Finally, the Indian Team chose the young, confident, aggressive Dhoni as its captain. We described the impact of Dhoni is our April 10, 2009 titled  Dhoni Captains The World - When Will An Indian Leader Do That? 

Just as Dhoni changed the character of the Indian Cricket Team, India needs a leader to change its character from a meek society that tolerates abuse and shrinks from embarrassment to a confident, aggressive society that warns others to not tread on it and its people. 

Such a leader will teach young Indian society and Indian students in particular that

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Editor's Note: In this new series of articles, we include important or interesting videoclips with brief comments. Our Web Software does not permit embedding of the clips into our articles. So we shall have to be content to include the links to the actual videoclips. Please let us know whether such articles are useful to you.

This is an article that expresses our personal opinions about comments made on Television and in Print.  It is NOT intended to provide any investment advice of any type whatsoever.  No one should base any investing decisions or conclusions based on anything written in or inferred from this article. Investing is a serious matter and all investment decisions that should only be taken after a detailed discussion with your investment advisor and should be subject to your objectives, suitability requirements and risk tolerances.

It is our axiom that a strong trend does not become a Bubble until CNBC gets giddy about it,  We have news for you. CNBC got really giddy this week. We show you why we think so and let you judge for yourselves.

In this article, we feature 6 clips:

You can either watch this exchange on the clip or read Mr. Kass's summary at Kass: 'The Kudlow Report' Recap The clip is more entertaining in our opinion.


6. ADP & The Economy - David Rosenberg, Rick Santelli & Two Other Guests - Wednesday June 3, 2009 - 8:30am.

In virtually any other week, this would be the leading clip we discuss. David Rosenberg has had a stellar record of predicting the economy and the bond market . Any one who followed Mr. Rosenberg's advise made positive returns in 2008. Need we say more except watch this clip.


Send your feedback to editor@macroviewpoints.com

Editor's Note: In this new series of articles, we include important or interesting articles from various newspapers with brief comments. Please let us know whether such articles are useful to you.

This is an article that expresses our personal opinions about comments made on Television and in Print.  It is NOT intended to provide any investment advice of any type whatsoever.  No one should base any investing decisions or conclusions based on anything written in or inferred from this article. Investing is a serious matter and all investment decisions that should only be taken after a detailed discussion with your investment advisor and should be subject to your objectives, suitability requirements and risk tolerances.


1. China – Watch The Body Language – Wall Street Journal – June 4, 2009

The past 3 weeks have seen an eruption of concern about China and how its actions would affect America’s AAA rating, the US Dollar. Fears that China will cut back on its purchases of US Treasuries have created a violent sell-off in the Treasury markets.

If you worry about any of these issues, this article by Andrew Baston in the Wall Street Journal is a must read for you. The article argues that China has little choice but to park the proceeds in U.S. Treasuries. A couple of excerpts are below:

• “It is in expectations for inflation that China's influence is really being felt. Its manufacturing surveys have turned into positive territory well before those in the developed world. Perhaps more importantly, China is gobbling up commodities:”
• “Yet China has made no secret of the fact that it has been taking advantage of lower prices to build up reserves of oil and metals. If that stockpiling falls off in coming months, and isn't matched by a pickup in real demand from developed nations, current expectations for rising commodity prices might start to look stretched.”

• Not one CNBC Anchor told the viewers that the sell-off was justified or celebrated the sell-off.
• Instead, all the guests and all the CNBC Anchors told viewers that the decline was unjustified and the markets were deeply & violently oversold;
• They all told viewers that when markets get oversold, they eventually bounce upwards.
• They all told viewers that the violence of the sell-off was in itself a buying signal because of the nature of markets.
• In addition, they kept telling viewers that as stock prices fall, stocks become undervalued and better buys.

• Most anchors seem to be believe that the sell-off in Treasuries  is a good thing, a righteous action by markets or a bursting of the hated Treasury Bubble.
• Anchors on shows like Power Lunch celebrated the sell off in Treasury Bonds telling each other and the viewers that the era of risk aversion was finally over. Michelle Caruso Cabrera drew the picture of the yield curve in her infomercial and showed how 30 year treasury rates could go to 6% or 7%.
• Fast Money Traders*, the wild west bunch of CNBC, got ever so giddy about the sell-off in Treasuries. They celebrated with wild abandon and opined how inflation was a systemic problem for the US Economy. Then they told viewers that long term Treasury rates could skyrocket and stay there for a long time.

• Oil is up 29% in May and the Commodities index, CRB, is up over 14%, its best month since July 1974. Gold is marching back towards $1,000. US Dollar has been sold mercilessly and US Treasuries have been sold violently. Long only institutional investors (or dumb money) are again investing in commodities as an asset class - the same madness that drove Oil to $147 in the real bubble.

• Melissa Lee compared the rise in 10-year yields to the June 2008 period;
• This brought back memories of June 2008 when Dylan Ratigan had compared that month to June 2006 as a period of high inflation;
• Tim Seymour of Fast Money compared the spread between the 2year-10year treasury yields to the October 2003 period.

• The US Economy is terribly leveraged, a fancy word for the bald statement that the US Economy has a huge amount of debt, roughly 350% of its GDP. This debt-ridden economy cannot, repeat cannot, handle high interest rates. This is why, in the past decade including the bubble years, when market treasury rates shot up, the economy slowed down and that created a new bull market in Treasuries.
• When US Treasuries fall in value, other bonds such as Municipal Bonds and Corporate Bonds fell even faster. Witness the rout in the mortgage market on Thursday, May 27. These bonds are very hard to sell when prices are falling, especially for individual investors. Only US Treasuries can be sold quickly at the market price. So there is no substitute, in our opinion, to US Treasuries for safe income.
• American households suffer from income stagnation. It is a sad fact that incomes in America have not grown even during the bubble years. Today, the average American household suffers from a shortage of income and a severe cutback in credit. They are in no condition to tolerate a rise in market interest rates. (for more details, see our article America's Income Problem).
  

• To educate the American Investor that buying bonds when rates are high is the right thing to do.
• To educate their viewers about the virtues of investing in the safest, most liquid bonds on the face of the earth.
• To educate the American Investor about getting guaranteed safe income.

1. Taking On Economy & Stocks – Richard Bernstein , former Merrill Lynch chief investment strategist with Joe Kernan – Tuesday May 26, 7:03 am

Thank you for this interview, Mr. Kernan. Mr. Bernstein is a balanced and astute thinker whose views have been prescient. If you had followed his thinking, you probably would have obtained positive returns in 2008. Need we say more except to suggest viewing this entire 05:48 minute clip at http://www.cnbc.com/id/15840232?video=1133070724&play=1. Below are some key quotes:

Bernstein – "People are really not thinking through what goes on. ..One example would be the rise in commodity prices, right; if the global economy is heating up and you get say rise in gasoline prices, what does that do to the consumer? If the global economy heats up and the dollar continues to weaken, what does that do the consumer? Over the past 3-5-10 years, we have made up for the lower standard of living by increasing leverage, by the household sector increasing leverage, well that is not feasible any more. So if the dollar weakens, our standard of living will go down dramatically without the possibility of levering up as we have been doing. Those are types of things I don’t think people are actually considering.."
Bernstein – "I think what people are misunderstanding is that bubbles create capacity and that is what they do in a economy. And we have just had a monstrous global credit bubble; what is happening now is that we are now seeing the consolidation phase, …..An economy with immense overcapacity does not function well."
Bernstein – "…I am not particularly worried about inflation because of this huge excess capacity you have in the global economy right now..it is not just happening here, it is true all around the world; if you look at someplace like China, their solution to the problem is to build more capacity which to me is even more befuddling..I don’t know how you solve the problem by building more capacity.."
Bernstein - "..So I think the rise in commodities … I don’t think it is a lasting event and if you look at things like the valuation of commodities right now to Treasuries, commodities are pretty overvalued relative to the treasuries.."


Our Comment

Again, Thank you Joe Kernan for this interview. We were relieved to hear about Mr. Bernstein’s views about China and China's solution of hoarding commodities to protect against inflation. We had expressed similar views in our May 9 article The Bubble Is Dead. Long Live The Bubble.

Joe Kernan is somewhat of a conspiracy theory buff. So we feel emboldened to ask why he ignored Bernstein’s comment about liking Treasuries. Readers who watch the video will notice that Joe Kernan engaged Bernstein on many points except on his views regarding Treasuries and China. Should we read some pro-China, anti-Treasury bias in this behavior, Mr. Kernan?

Joe Kernan has claimed on his show that he is not afraid to respond directly to viewers. We wonder whether he will respond to the doubt we have raised. 


2. All About Bonds - Don Galante of MF Global and Michael Hasenstab of Templeton Global Fund – with Maria Bartiromo on Tuesday, May 26, 3:44pm

Maria Bartiromo asks both managers about their views about the US Dollar and the worries about America’s AAA rating. This is a good conversation and we recommend readers watch it at http://www.cnbc.com/id/15840232?video=1133564559&play=1

• For the first time since 1972, the sitting Prime Minister and the incumbent party got re-elected.
• The recent disturbing trend towards smaller regional, ethnic parties winning at the expense of the two national parties was reversed decisively. This is a major positive for stable governance.
• The Communist parties were utterly defeated,  a huge positive for India’s economy and for India’s foreign policy.
• Every single group in India's diverse milieu of religion, language, race and caste, had a reason to feel satisfied about the election's verdict.

• It addressed the core belief of India’s voters.
• She took credit for saving the Indian economy from the American mess. This nullified BJP's attacks on her party for the slowdown in the Indian economy.
• This also nullified attacks by the Communist Party on the Congress for being too pro-American and for undertaken American style reforms.
• She linked her government with Indira Gandhi, the strongest leader India has ever had, a figure that is revered in India, especially in North India.
• In a subtle manner, she reemphasized her winning theme from the 2004 election. At that time, she had appealed to the Indian voters as Indira's daughter-in-law and one who is devoted to the her husband's country and not to Italy, her country of birth.
• This is powerful stuff in India, all of India, not just rural India. To this day, many of the popular Urban soaps revolve around the mother-in-law & daughter-in-law relationship.
  

• Tata-Nano won big because they got a great deal from the business-friendly state of Gujarat,
• Gujarat won big because they got a new factory that could establish Gujarat as a center of automobile industry.
• Bengal won because the state was finally rid of the Communists. Now their new government, with the aid of the national government in Delhi, will be able to land more business and financial help.
• Ms. Mamta Banerjee won big. Her party now rules West Bengal and she will probably become the Minister in charge of Indian Railways, the largest single employer in the World.
• Of course, the Communists lost and that is a big win for India, its economy and foreign policy. 

“Our money is substantially US –based although Pimco is a global firm. I think, you want to go to hard currency countries if you have a choice, such as Germany, countries that are exhibiting less of a trend towards higher debt, let me cite, the Quantitative Easing programs in US and UK so far vs. what we have seen in Japan, Euroland & Canada.”

“Well, I think what you want to invest in, certainly not Treasuries, you want to invest basically in sectors that are not subject to tremendous supply like treasuries & that have potential demand going forward; in the bond market, I think it is in municipals & high-quality corporates and in the stock side it is in companies that have a very steady stream of income going forward i.e. stable dividends and outlook for increasing earnings going forward”

"Incomes are plunging; we track income tax collections and they are falling off a cliff; there are no “green shoots’ that we see; savings by all retail money market funds, bank savings, CDs  are plunging, people are taking money out of savings to pay bills, hopefully not to buy stocks here"

• $33 Billion out of savings accounts,
• $20 Billion out of small certificates of deposits,
• $30 Billion out of retail money market funds.

• "Companies insider buying is way down, insider selling is more than 10 times insider buying; we are seeing record amount of new offerings; last time we saw this amount of new offerings was in 2000 and what happened after 2000 wasn’t pretty if we remember correctly." 

• "Historically when companies have been buying, stocks have gone up and when the companies have been selling, the market has gone down except for now and in 2003 and we have been tracking this since 1987. (Biderman also explains why 2003 was different than now)

• “Remember house money in the stock market casino are the public companies; that it their shares that they are playing with”

• “I am not wanting to stay long in front of this and I would recommend those who have made a lot of money to get out and those who are traders to go heavily short.”

"And Mark, you know you mentioned China, and it is pretty interesting when you look the markets today, down 130, when you think about the economic crisis you got to think about China; maybe part of it some say is cultural; they are thinking over an extremely long time frame and that means in the midst of this economic crisis, the President of China, the commerce Minister of China are coming to Africa, they are now the largest lender, and they are investing left and right ; and this is something mark we saw everywhere, from Libya down to South Africa, in the Congo, on your plane,  in the airport, on the street, Chinese people are everywhere"