This Professor is a Genius – The Future of the West

An economics professor at a local college made a statement that he had never failed a single student before, but had failed an entire class. That class had insisted that socialism worked and that no one would be poor and no one would be rich, a great equalizer.

The professor then said, "OK, we will have an experiment in this class on the present administration’s plan".

All grades would be averaged and everyone would receive the same grade so no one would fail and no one would receive an A.

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy.

As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.

The second test average was a D! No one was happy.

When the 3rd test rolled around, the average was an F.

The scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

All failed, to their great surprise, and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great but when government takes all the reward away, no one will try or want to succeed.

Could not be any simpler than that.

Bond Market:  The Historic Bull & Bear Battle
By CIGA Eric  11/10/09

The intense and historic battle between the bull and bears continues to rage in the long bond market.  It certainly looks as if the June-Oct 09 consolidation pattern has been broken to the downside.  The June 09 lows are now pulling like a magnet.  Symmetry and cycle lows imply that the neckline of the large head and shoulders formation could be tested as soon as January 2010.  The resolution of this battle will have far reaching consequences for all Americans.

Click charts to enlarge in PDF format

Hi, Jim,

I wonder if the following new junior gold fund will have the shorts a tad bit concerned.

Have a wonderful day,
CIGA Anthony

GDXJ – Welcome to the Party!
By: Adam Brochert

The Junior Gold Miner ETF (ticker: GDXJ) from Van Eck Global is now in business. Though I have a problem with putting larger silver miners in this ETF as the heaviest-weighted holdings (get info from the Van Eck website here), I will be participating. This is a good vehicle for those looking to get into the more speculative side of the Gold patch without doing all the homework. It also provides a measure of international exposure.

As Gold continues to surprise to the upside, much to the paperbugs’ dismay and astonishment, the Gold miners are likely to continue to play "catch up" to the Gold price. The all-time highs for many Gold stocks are now within reach (if they haven’t been exceeded already). I can only hope that GDXJ will catch on rapidly so that long term LEAP options will become available soon.

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Dear Anthony,

Unless they are brain dead it should concern them.

Regards,
Jim

Dear Chris,

The cause of the Western financial disaster is all in the OTC derivatives, and no one is going screw up the tons of money Wall Street is making in those, so please do not blow smoke.

Regards,
Jim

Chris Dodd On "Morning Meeting": We Have Financial Regulations From ‘The 19th Century’

Calling our current financial regulatory regime "more an accident than anything else," Sen. Chris Dodd (D-Conn.) appeared on Dylan Ratigan’s Morning Meeting to discuss the sweeping reform bill he unveiled yesterday.

Dodd’s bill has been called far more aggressive than the financial reform bill being weighed in the House of Representatives. Under the proposed measure, the Federal Reserve would be stripped of much of its power and in its place will be a new regulatory council to oversee systemic risks to the economy. The bill, Ratigan said, has several promising components, including crackdowns on derivatives, increasing capital requirements for banks and a clause that would allow the government to clawback pay from execs at publicly traded companies.

Here’s Dodd:

"We have an architecture of federal regulatory structure — some of it dates to the 19th century… It’s just so outdated. It’s a hodgepodge. It’s an accident more than anything else… If there’s any silver lining in the last several years of this very dark cloud in our economy it is that I think we got a chance to do what you very effectively described as [something], bold."

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