WHY AN OUTSIDER IS NEEDED to end this INSANE "ESCALATION OF COMMITMENT"

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Traders typically become familiar with the "sunk cost" phenomenon, AKA "throwing good money after bad". Good traders suck it up, take the hit, and move on. Bad traders average down until they are broke.

The similarity between this and the government's mis-management of the banking implosion are obvious to most people. So why doesn't the government "get it"?

Turns out there's a psychological reason for this.

Excerpt - 'Galinsky believes that the results suggest that companies trying to reverse results of bad decisions should find true outsiders. He points to troubled automaker Ford as an example. Instead of hiring from within--as General Motors (GM) recently did--Ford made Alan Mulally from Boeing, an aerospace company, their chief executive officer. Many experts believe that Ford is now recovering quicker than GM. "It's true that insiders have more knowledge," Galinsky says. "But when you are already down the road of a failed course of action, you really need ... a true outsider."'

...Ron Paul, anyone?

BOA going down?

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http://www.zerohedge.com/article/paulson-adds-15-billion-citi-stock-sells-entire-goldman-stake-and-some-bank-america

The takeaway from the ZH article is in the beginning "The latest Paulson & Co. 13F is out: the man who inspires a million hedge fund clone portfolios has made some interesting changes to his holdings. The most notable is the documented addition of 300 million share of Citigroup, a new position for the firm. Offsetting this is the sale of 8.2 million shares of Bank of America (which at 160 million shares is still the firm's second largest holding). Paulson has also divested his entire 2MM share Goldman Sachs stake."

The only thing that I'm wondering about is why hold any BOA (unless it's to avoid getting sued for insider information - "Hey, we took a hit..! See, right here!") and why they dumped GS (although it was only 2MM shares, so maybe that's just them trading out of that position).

UPDATE - Invectrics.com, and stock timing system discussion group

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Check out the system analyzers on the excellent timing system discussion list Holygrailism as they thrash Invetrics' system.

http://finance.groups.yahoo.com/group/holygrailsm/message/52231

If you are interested in stock trading systems, I recommend you check it out. The list owner Drew has an impressive free timing system - ULTRA, the signals can be found here http://finance.groups.yahoo.com/group/thestockowl/

ALL ASSET CLASSES DOWN

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Except the Dollar.

...Deflation, anyone?!

I am a bit excited, as a couple weeks of this will pretty much confirm the thesis of this blog.

http://invetrics.com/ - Free timing service

New service, still trying it out. So far it's been looking legit and it's calls have been good. You can register for free for their DJI timer.

http://invetrics.com/

FYI, it went from long to cash today.

The beginning of the middle of the end

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It appears that at least *some*, albeit a tiny portion of the population is starting to catch on that this game is gonna end, and end badly.

If you haven't read this article by Tyler Durden over at Zerohedge, read it NOW...

Here There Be Big Nymbers (Sic)

Here's what I take away from that:

The financial system is screwed.

Since there is no "money" anymore (money is debt), the amount of money must grow at a rate proportional to 1. GDP and 2. Population (and infrastructure) growth.

The amount of "money" (which is actually DEBT) has been engineered to grow to the literally astronomical amount of 1.44 QUADRILLION DOLLARS.

To put this number in perspective, the Pole Star, Polaris, is "only" 2.5 quadrillion miles away.

This will not register on most people, as unless your an astronomer, astrophysicist, rocket scientist, or (possibly) an inorganic chemist, the number is just too large to truly comprehend.

But once you've wrapped your mind around just how staggeringly huge that number is, realize: That's DEBT.

INTEREST AND PAYMENTS MUST BE PAID ON THAT DEBT. Which obviously can't happen, as even 1% of 1.44 quadrillion is 1.4 trillion, which is about 23% of the ENTIRE WORLD'S GDP, JUST TO MAKE A PAYMENT ON THE INTEREST ASSUMING A 1% RATE.

Guess what: That ain't gonna happen. America just don't have the jack anymore to cover that bet.

So... The music is going to stop... Or more likely, things are going to get so screwed up it may as well be stopped. What to do?

Well, start accumulating gold and silver. If you can't time it, then dollar cost average. If you're a trader, take a certain % of your profits and buy physical gold.

PHYSICAL, not paper.

And take any other supply disruption measures you can think of, e.g. If you require certain medications for survival, I'd lay in six month supply and make sure you rotate your stock, keep some emergency gasoline around (and rotate that as well, or use a gasoline stabilizer), car parts (bicycle parts?!) etc.

If it turns out you didn't need any of that, at worst you'll have hedged against future inflation. If it turns out you did, you'll seem like the smartest guy on the block, maybe several blocks.


After the dust settles, things will get better. In fact, I'm betting that once the shackles of the least productive parts of our society are thrown off (government and finance), there will be a boom from pent up entrepreneurship, talent and desire to "make stuff" that the world will not have anticipated.

It's just a matter of planning ahead and ENJOYING watching the whole thing come apart at the seams. XD


PS To any law enforcement out there (that includes members of our armed forces): If you are reading this, please remember who asked you to keep an eye on guys like me when you open your pension plan and look at the numbers.

EXPECT INCREASED VOLATILITY

...And to those of you saying "Yeah, right... What do you call the market action in the past few weeks", I mean we are likely to see things get even more volatile. Here's why:

The Anonymity Of HFT Whales May Be About To Expire, Together With Their Revenue Streams

If you have been wondering why Rentec, GETCO, Citadel and Highbridge are sweating these days, it is because the SEC is preparing to finally remove the rock they all crawl under as they execute millions of trades each and every second. As Traders Magazine reports, "the Securities and Exchange Commission, in an effort to get more information about high-frequency trading, plans to dust off an old statute that allows it to require large traders to "self-identify" themselves. As part of the plan, the SEC will propose a rule implementing a large trader reporting system for non-broker-dealers." So if you see any particularly abnormal market behavior these days, don't be surprised if it is simply due to Jimbo and Kenny doing all the can to pocket last any minute revenue before the hammer comes crashing down. Read the rest here:

http://www.zerohedge.com/article/anonymity-hft-whales-maye-be-about-expire-together-their-revenue-streams

I have been expecting something like this to happen..!