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BlackRock Inc.’s Peter Fisher said the U.S. Treasury should consider selling 100-year bonds to ease the federal government’s borrowing costs as it faces a budget deficit expected to top $1 trillion.

“If you issued a 100-year bond and had principal and interest pay down smoothly over the last 50 years, you create a great borrowing device for the Treasury that would let us move this hump of borrowing over the generational retirement that’s coming up,” Fisher, managing director and co-head of fixed income at BlackRock in New York, said in a Bloomberg Radio interview.

The Treasury last month tripled its estimate of planned debt sales in the final three months of the year to a record $550 billion as it attempts to fund bailouts for banks and fiscal stimulus programs to jump start economic growth. Treasury Secretary Henry Paulson told a conference in Washington Nov. 17 that the U.S. will issue some $1.5 trillion worth of Treasury securities in the fiscal year that began Oct. 1.

Fisher, Treasury undersecretary from August 2001 to October 2003, eliminated 30-year bond auctions in 2001 to reduce government borrowing costs after four years of federal budget surpluses. The U.S. hasn’t been in the black since. The government revived sales of the security in February 2006

Elkonon Goldberg notes in his The Executive Brain text that attention, planning, reasoning are functions of the brain’s frontal cortex. His research suggests that by utilizing brain functions, we exercise brain regions and strengthen their functions like going to a gym builds our muscles and endurance.

Over time, we can build our brain’s capacity for intention by exercising the frontal cortex functions. We can look at lifting weights as the best way to build our strength, engaging in sustained, directed efforts to cultivate our intentional capacities.

Become Your Own Trading Coach, Dr Brett Steenbarger’s new weblog, also the title of his forthcoming book of same name, will be instructive to traders to self-coach in all aspects of becoming a good trader.

In Enhancing Trader Performance , Dr Brett describes the dynamic of talents leads to interests leads to immersion in skill building leads to competence leads to further flow and the eventful development of elite performance.

“It is the interplay between the flow state and the development of intentionality that creates accelerated learning curves: without flow, talents have no place to go; they never evolve into elite skills.”

Without the flow, there is no motivation to sustain efforts leading traders to sabotage themselves with impulsive trades.

The first step to performance development is practice but before this step, there should be play. Elite performers never stop playing, for example, concert pianists improvise as well as practise on the piano keyboard for hours daily.

As newbies, we should paper trade first in parallel to live trading with entry, stop and profit target.

By playing with paper trading, we can discover niches that will build mental muscles to lead to higher performance.

On the same note, it is also vital that we ‘play’ in the gym for an hour or less, say three times a week, preferably before the start of our working day, to exercise our brain and build our muscles to keep mind and body fit to take the stress out of trading. Or we will end up with Distress.

Stress can facilitate performance but Distress can impair one’s ability to focus and correct an action.

We need to play and exercise to be in top form, in whatever we set out to achieve.

I await with great anticipation to read Dr Brett’s new book when out next year, to become my own coach and student.

RECESSION official report, CLICK HERE: dec2008

Robert Prechter Explains the Price Effects of Inflation and Deflation In addition to this article, visit Elliott Wave International to download the free 8-page report, Inflation vs. Deflation. It contains details on which threat you should prepare for and steps you can take to protect your money.By Robert Prechter, CMTBefore explaining the price effects of inflation and deflation, we must define the terms inflation, deflation, money, credit and debt. Webster’s says, “Inflation is an increase in the volume of money and credit relative to available goods,” and “Deflation is a contraction in the volume of money and credit relative to available goods.” Money is a socially accepted medium of exchange, value storage and final payment. A specified amount of that medium also serves as a unit of account. According to its two financial definitions, credit may be summarized as a right to access money. Credit can be held by the owner of the money, in the form of a warehouse receipt for a money deposit, which today is a checking account at a bank. Credit can also be transferred by the owner or by the owner’s custodial institution to a borrower in exchange for a fee or fees – called interest – as specified in a repayment contract called a bond, note, bill or just plain IOU, which is debt. In today’s economy, most credit is lent, so people often use the terms “credit” and “debt” interchangeably, as money lent by one entity is simultaneously money borrowed by another. When the volume of money and credit rises relative to the volume of goods available, the relative value of each unit of money falls, making prices for goods generally rise. When the volume of money and credit falls relative to the volume of goods available, the relative value of each unit of money rises, making prices of goods generally fall. Though many people find it difficult to do, the proper way to conceive of these changes is that the value of units of money are rising and falling, not the values of goods. The most common misunderstanding about inflation and deflation – echoed even by some renowned economists – is the idea that inflation is rising prices and deflation is falling prices. General price changes, though, are simply effects of inflation and deflation. The price effects of inflation can occur in goods, which most people recognize as relating to inflation, or in investment assets, which people do not generally recognize as relating to inflation. The inflation of the 1970s induced dramatic price rises in gold, silver and commodities. The inflation of the 1980s and 1990s induced dramatic price rises in stock certificates and real estate. This difference in effect is due to differences in the social psychology that accompanies inflation and disinflation, respectively. The price effects of deflation are simpler. They tend to occur across the board, in goods and investment assets simultaneously. ……………. For more information on deflation and inflation, including money-saving steps for protecting your wealth, download Elliott Wave International’s free 8-page report, Inflation vs. Deflation.

Editor’s Note: This article has been excerpted from a free issue of Robert Prechter’s monthly market letter, The Elliott Wave Theorist.

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The Government Doesn’t Want You to Read This Article About the Financial Crisis
December 2, 2008

The full 10-page market letter, Be One of the Few The Government Hasn’t Fooled, can be downloaded free from Elliott Wave International.

By Robert Prechter, CMT

“Who Will Benefit From The Housing Act?”

This question is an actual headline from a national daily paper. The real answer is: mortgage lending corporations, developers, real estate agents, speculators and politicians. The government is also pledging tax money to providers of “financial counseling” and grants for speculators who want to “buy and renovate foreclosed housing”; in other words, it will hand tax money to charlatans and unfunded wheeler-dealers. But a far better headline would have been, “Whom Will the Housing Act Hurt?” The answer to that question is: (1) prudent people, i.e. savers, earners, renters and people who have waited to buy a house at a reasonable price; and (2) innocent people, i.e. taxpayers.

Government action (unless it is aimed at destruction) always causes the opposite of its stated effect. If taxpayers ultimately have to shoulder the burden for all the bad mortgage debt, those who are on the edge of being able to make their mortgage payments will be forced over the edge, causing more missed mortgage payments and more foreclosures.

There is never any need for a law granting privilege except when the goal is to reward the undeserving and to punish the innocent. If the goal were otherwise, there would be no need for a statutory law, because the natural laws of economics, when unencumbered, serve to reward the deserving and punish the imprudent and the guilty. Populists loudly challenge this idea, but they are wrong.

I thought the Fed was created to “help manage the economy.”

After a secret meeting on Jekyll Island (GA), Congress and a handful of bankers created the Federal Reserve System for two purposes. The first one was to allow the government to counterfeit money, thereby letting it steal value from savers through inflation. The second was to allow bankers to make profits through debt creation, also at the expense of savers. Any other claim is a smokescreen.

So shouldn’t we blame the Fed for the country’s financial problems?

That’s like blaming the collapse of your house on the biggest termite. The Fed is only one of the monsters that Congress has created. In the financial realm, others include Fannie Mae, Freddie Mac, Ginnie Mae, Sallie Mae, the FDIC, the FHA, the FHLBs and the income tax. But there are also a hundred other havoc-wreaking agencies of the federal government. Congress is to blame for ruining America. The Fed is only one of the mechanisms it created along the way. It’s a big one, and it’s fine to campaign against it, but to blame it for everything is to give its creator a free pass.

This is an important distinction, because many people seem to think that abolishing the Fed will cure America’s money woes. They seem to think that once the Fed is abolished, Congress will behave responsibly. One website even calls for abolishing the Fed in favor of giving money-printing power directly to the federal government! Abolishing the Fed is a worthy goal, but Congress will work tirelessly to create one disastrous institution after another, because that’s what campaign donors pay for.

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For more information on the government’s role in the financial crisis, download Robert Prechter’s free 10-page market letter, Be One of the Few the Government Hasn’t Fooled.