O.K., so the headline isn’t exactly accurate, but it did catch your eye. And if one David Cay Johnston has his perverse way, it would be a statement of fact. Indeed, Johnston seriously calls for a U.S. declaration of war not only on the Cayman Islands, but also Bermuda and other offshore tax havens. His lengthy radical views are set out in an article (”Fiscal Therapy”) in the Jan-Feb 2009 issue of the left-leaning magazine Mother Jones, known for investigative reporting with a decidedly radical slant.

Ordinarily a nutty proposal such as Johnston’s could be laughed off as evidence of a sick sense of humor or an advanced mental problem, but Johnston is not your run of the mill left-wing nut.

Prize Winning Radical

In 2001 Johnston won a Pulitzer Prize “for his penetrating and enterprising reporting that exposed loopholes and inequities in the U.S. tax code.”

...

Alex’s Notes: The term “slippery slope” has been used quite a bit when it comes to analyst commentary on what the Federal Reserve (which by the way isn’t a government institution, contrary to what many believe) has been up to lately.

A little freedom here, a little sovereignty there, and before you know it, a person might just wake up to find them self enslaved.

I am reminded of a few comments by Thomas Jefferson:

“I sincerely believe… that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale.” ~Letter to John Taylor, 1816

“If the American people ever allow private banks to control issue of their currency, first by inflation, then by deflation, the banks and the corporations that will grow up around them, will deprive the people of all

...

Equities surged around the world on Monday with investors taking heart from a likely rescue plan for U.S. automakers, a proposed U.S. jobs plan and more government stimulus measures to reverse economic decline.

The dollar fell against other major currencies apart from the yen while demand for government bonds dropped.

European shares jumped, led by banks and oils, tracking gains in the United States and Asia.

The FTSEurofirst 300 index of top European shares traded 5.8 percent higher. Earlier, Japan’s Nikkei  climbed 5.2 percent to its highest close in a week.

U.S. president-elect Barack Obama said on Saturday that his plan to create at least 2.5 million new jobs included the largest infrastructure investment since the 1950s and a huge effort to reduce U.S. government energy use.

Lawmakers in the U.S. Congress are also working on draft legislation to help out the

...

I suspected Matt's flash of optimism might be brief.

Matt - you've consistently cheered us down to a lower and lower stock market, cratering real estate prices with an almost giddy thirst for gloom and panic. So why stop now?

I guess at least $25 a barrel oil means lower expenses for workers.  In all seriousness, though, as soon as I posted that blog about oil being so much more likely to go to $100 than $25, I did have doubts.  Clearly the contango in the market feels pretty confident, and my money is still generally on that. But I long learned that with energy prices and gold prices in particular, all bets are off on how low (or high) they can go.

But man, it's true, you look at this economy, and there really isn't much that is pretty about

...

We’ve been mostly in cash since July and are searching for a good time and place to recommit to risk assets. Bonds seem a better beginning than stocks. We’ve committed about 1/3 of our target bond allocation during November.

PIMCO has been saying for a while that investors need to be high in the capital structure in these perilous times — meaning quality bonds. Bill Gross re-emphasized that point in his December letter, where he pointed out that the deleveraging of stocks, government intervention and investment in operating companies, and other factors change the rules and the future for stocks — making bonds a better place to be for now.

We share that general view, but are also concerned that the money supply expansion through rescue programs by the US and other governments sets bonds up for problems down the road due to inflation and interest rate increases. 

...

Selling accelerated into renewable and clean tech stocks this week indiscriminately, exposing what appears to be a no-tolerance attitude for risk, regardless of how much risk has been priced into these stocks to date. Granted, there are companies in every sector which are more exposed to others to the tightening credit and financial markets, and the global recessionary environment will undoubtedly have a negative impact on plans for projects and expansions, but even companies reporting solid results and affirming relative strength on their balance sheets were sold off. Here is an example of headlines that we saw which reflect the fear and loathing in the markets: ldquo;ReneSola Reveals Solar Rotrdquo; (Motley Fool ndash; referring to customers reneging on purchase contracts) ldquo;First Solarrsquo;s Star Dimmer Than Everrdquo; (The Street.com ndash; referring to slower year-over-year growth of ldquo;only 67.5%rdquo;, the implications of the dollarrsquo;s rally against the euro on its balance sheet, and ...

Daily Reckoning editor Bill Bonner says everything is going according to plan. An unsustainable credit-fuelled boom popped. And businesses, consumers and financial markets are left reeling. Bill says US stocks could fall much further before stabilising at a ‘normal’ level. Meanwhile, reckless money printing by the Fed will eventually take down the dollar, and light a fire a fire under gold prices.

More from Bill:

What MUST happen DOES happen. Sometime it takes longer than you expect. And often it doesn’t happen exactly the way you expect. But it is a relief to know that gravity still works… what goes up still comes down. ‘Regression to the mean’ is another old law still in force; when things become extraordinary, you can bet they will go back to normal sooner or later.

But what does this mean for stocks? And what about gold? The dollar?

Hey, you’re asking a lot from

...

If you are looking to retire, relocate abroad, or move some assets offshore, Panama the place to go says Bob Bauman. The country uses the US dollar and its banks are well positioned to survive the global credit crisis. Better still, there is no Federal Reserve or central bank to interfere in the markets…

More from Bob in The Sovereign Society:

Concerned about the gloomy economic situation and the liberal drift in U.S. politics, a good many Americans are seriously considering the possibility of moving themselves and their finances offshore - while they still are able to do so.

The Sovereign Society (and yours truly) have long suggested that the Republic of Panama is the ideal place for retirement, a second home, or even to house your asset offshore protection trust or family foundation. It’s one country in this turbulent world that is proud to be known as a tax haven.

Healthy, ...

Concerned about the recent decline in stock prices, French President Nicolas Sarkozy, yesterday (Tuesday) called for the creation of European sovereign wealth funds. The funds would be virtual carbon copies of the state-owned investment vehicles that have sprung up from Beijing to Abu Dhabi to disperse their respective nations’ cash reserves in foreign assets.

Addressing the European Parliament, President Sarkozy implored his European contemporaries to embrace the current period of economic upheaval as an opportunity to restructure the global financial system. According to the Daily Telegraph, he also articulated the concern of many Western authorities that sovereign wealth funds, located primarily in Asia and the Middle East, could use their massive cash reserves to scoop up key foreign assets at extraordinarily low valuations.

“Stock markets are at historic lows. I do not want European citizens to wake up a few months from now and discover that European companies belong to

...

Last week, market volatility reached record levels. Dan Amoss says the wild gyrations in stocks are the result of hedge funds liquidating assets to cover their highly-leveraged positions. This means some good firms — especially those providing vital functions in the food and energy markets — are now massively undervalued.

More from Penny Sleuth:

Congratulations on making it through yet another week of panic, margin calls, and forced selling! If you’re surviving, and you’re not down too much this year, you’re better off than most money managers.

Out of the thousands of hedge funds in existence, hundreds are closing up shop and liquidating, if the past weeks’ trading action was any indication.

Many of these hedge funds should never have been started to begin with, because their illusory gains during the credit bubble were too often made with leverage, rather than analytical talent.

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