Professor, Are US stocks commoditized?

While it may seem a bit naive……just why is it that solutions have to be socialistic….What about structural change…10% consumption tax….elimination of the IRSTownship governance…easier to manage….projects are to be decided by the local individuals via internet….eliminate the party by advertising system….the tax take should be directed by the people of each township….Local lending only…..banks actually know their clientsWorldwide Stock Exchange….direct access is enhanced whereby any individual can buy/sell stocks on any exchange on a no commission basis……It has recently been proven by BATS that an exchnage is just a few computer banks, and can be located anywhere…..

Predict a permanent demand contraction. It will be impossible to stimulate individual demand, but you can increase aggregate demand bycreating jobs. These jobs must add value to the economy and country and be sustainable. I think interest rates should be raised to stimulate savings. Cheap money has not served us well.Crack-up boom is apt for a fiat currency with the addition of the shadow banking system’s ultra leveraged counterfeit securities with fee producing opaque complexity. These securities are the current problem. There needs to be risk transparency. The opaque complexity gave the player the edge, giving false confidence to take on more risk. Transparency will be resisted, but the system will remain locked up, world-wide, until risk transparency and trust is achieved. With risk transparency, none of the synthetic crap works and the market will exterminate it. Securitization, which is reasonable, lacked responsible quality control and accountability and is DOA. You can’t run a business that way. Wall Street is exempt from most normal business practices and makes sure it stays that way. Deregulation is a smoke-screen to deviate from time honored standard business practices. Every 20 years a new bunch of kids wants to re-invent the wheel; there needs to be boundaries. Playing in traffic usually has the same result, you don’t need to discover it. Emerging markets go through this phase, like producing toxic dog food and baby formula. We produce toxic securities.

Maybe this is a dumb question but; Why do we need a stock exchange?

“3. Eliminate all foreign aid we give to countries for all reasons”yes this is a major burden on the US taxpayer.

I can understand that doing nothing invites a serious cost. I worry however that depleting the remaining financial resources of nations to avert an economic tragedy that will occur, may leave nothing to deal with the actual disaster and the social/economic consequences follwing from it. I take no confidence in the actions of authorities to date so I expect the worst to happen. For example, Paulson’s “giveaway” of funds to banks, in my opinion, does not conform to the triage that Nouriel Roubini and others speak of. To date, the execution of remedial policies has been flawed; consequently, I don’t think another remedial plan will work given the nature of those who are required to implement it.

same cashin calling for a flushout down to 7,000 a few days ago? just checking. Did everyone get really scared by the 10 minute sell off monday in front of the 1,000 point rally tuesday? did everyone get scared by the 500 point ten minute sell off into the close yesterday? how is this 400 points up overnight with the market closed this AM. honestly, it is not a casino at all. as of right now, two serious scary head fakes down and we are up, up and away. near term the casino has turned towards seriously screwing the shorts while scaring out the longs on its way up… mighty big gap this morning though…

People around the world would starve as we have westernized/destroyed indegenous cultures around the world who are now dependent on us to feed them so just stop feeding them? The problem with Ron Paul stuff is that it’s pie in the sky not very well thought out and it doesn’t take into consideration the near impossibility of going back to a free for all economy. It’s 2008 not 1850.

Maybe this is the frog that has fallen into the cream bucket mentality.If I keep on kicking the cream will turn to butter.

Spot on!

I think if you watch him he provides what if scenarios supported by thresholds – but like any of the pundits you take what he says and blend it with your own observations and what others say — I think Marc Fabers comments from the other day ring true – all of these interventions are changing the dynamics such that the tried and true metrics are no longer as valid or reliable -

debt is not a mtter.The only matter is money.

twentyseventh!

Here is your clue to the next meltdown-credit card debt!!!10:10 a.m.[AXP] Amex instituting hiring freeze for open positions10:09 a.m.[AXP] Amex suspending management salary increases in 200910:08 a.m.[AXP] American Express seeks to save $1.8 bln in 200910:08 a.m.[AXP] American Express: About 7,000 jobs affected by cuts

Data this morning show that monthly US consumer spending dropped the most in 28 years. That fact is entirely consistent with the data from a couple of days ago showing that US consumer confidence is at the lowest reading ever recorded.Well that certainly jives with the big market “recovery” going on over the last couple of days, doesn’t it? Is everyone still sure they want to buy into this yet???PeteCA

the real bullets will be saved for the workers when they bring them out behind the woodshed.

There have been huge imbalances generated in the marketplace in two ways: (1) the natural cycle of human generations, where after 60 or so years people forget the lessons of the last generations and engage in a rampant bubble-blowing, and (2) by government interference (moral hazard created by gov’t guarantees, Fed central planners trying to guess the proper interest rates). Those imbalances must be worked out of the system – there is no way they can remain in some form and not cause problems.People like the author of the article, who have more faith in government officials than the free market, think that the government should step in and manage this adjustment period. They think that the government can catch us and gently lower us to the ground safely rather than letting us harm ourselves by slamming to the pavement.But all they’re doing is transmuting the form the adjustment is going to take. They’re moving the failures onto the government’s balanace sheets. So instead of the individuals who borrowed too much money paying the price, the holders of the nations’ currencies will pay the price.I doubt very seriously that government officials have the knowledge or objectivity to truly manage this situation so that they cushion the fall rather than simply delay the inevitable, making it worse in the end. But we live in an era where the faith in the power of government central planning to fix our problems is strong – look at how “progressive” and bureaucratic Europe is and America is becoming. I suspect we are going to have to learn the lesson the very hard way that more government interference is not the answer to a problem caused by rampant government interference. The government should simply protect private property rights, provide a place for people to resolve contract and fraud claims, and otherwise stay out of it. We would never have had this colossal problem without the moral hazard problems introduced by government in the first place.Instead, what will happen is this:– well-meaning people like the author will see that the governments absorb the cost of the imbalances.– this will ruin the currencies of these nations. The well-meaning people will then say that more steps must be taken to ensure the currencies are supported. This will probably involve things like prohibiting private ownership of precial metals and taxing or confiscating retirement accounts, since these will be the major remaining sources of wealth.– when that causes widespread corruption and unrest, the well-meaning people will say that more government censorship and martial law is necessary to maintain order.We will get the revolution BECAUSE of the well-meaning people insisting on trying to use more and more government coercion to solve a naturally recurring problem made worse by government in the first place.

Bloomberg: “Oct. 30 (Bloomberg) — Treasuries fell after interest-rate cuts in the U.S. and Asia and signs of a revival in bank lending pushed stocks higher, sapping demand for the safest assets. “Sorry boys at Bloomberg. Dead wrong.US treasuries are starting to decline on a long-term curve. US interest rates are beginning that slow march uphill. Assets have to go somewhere else for that reason – and not necessarily to US stocks.And I wouldn’t be surprised to see US T-Bills decline very soon. Hedge funds must move. They can’t sit around while the US dollar begins a new descent. That fast money has to be put to work somewhere. Don’t be surprised if the dropoff for the US dollar is pretty steep – once the momentum picks up.PeteCA

30 year fixed rate at 6.625% today…..7.0% coming soon.

Debt matters – just ask the people struggling underneath its weight.

Martin Wolf is delusional. He says of doing nothing, “Choosing to risk such an outcome would be like deciding to let a city burn in order to punish someone who smoked in bed.” I say what we’re doing is like telling the fire department to go back to the station because at some point the fire will certainly become beneficial and the only variable is time!Actually, doing nothing is not what I would choose to do. In this day and age we have learned that it is best for society if we take all our garbage/waste combine it together at a common location and bulldoze/bury it!We need to take all the toxic/non-performing instruments and isolate them. Not on the people’s book at the government, but on separate private books. The only thing the government need do is provide the penalty box framework in which these instruments can exist until such time they can rejoin the game or be put out to pasture. Once the solid instruments are being productive again, we then go back and look at the penalty box and workout solutions.Each party maintains their obligations while in the penalty box, It’s just that we allow those items to become visible and transparent but currently non-effectual on current operations. Some will argue that this is financial/legal limbo. Yes it is, but at least we know who, what, and how much. Currently, everyone is effectively in financial/legal limbo … The good is caught up with the bad.No, I’m not delusional that the penalty box scenario is an easy task, but the gobblygook we’re going through right now is pure nonsense! Dump the garbage in the dump and let’s get on with things!

DOUBLE BOTTOM IS IN! BOOOMMMM!

Sorry, above by 2cents

Big seller just hit the market!

I think the good professor is proposing socializism for sure. Not 6 months ago, I would have freaked, but the more I think about it, in order to prevent mass starvation, and a complete breakdown of the society we know, it may actually be necessary.As for “get[ting] back on track”, the more I think about this problem, the more I have come to realize that either we do not know what the track is anymore – our previous notions of it have completed evaporated and/or the track has been blown up. By the track I mean our fundamental notions of what the track is, and this ties in with the first part of my comment – what is our track – free market, socialism, a mixture of the two.Fundamental changes my friends.

Professor, will they make swap lines and get all the money from FMI and return to gold standard ?

I really appreciated this post, particularly the first half. An interesting perspective.While I do personally think that more regulation is needed in some markets (in regards to hedge funds, CDS’, etc.), the government has clearly been part of the problem by virtue of its various imprudent guarantees (whether explicit or implicit) creating moral hazard, its questionable monetary policy, etc.

There are many contributing factors to higher productivity. But without rising real wages or income, the ‘new redistribution’ is actually still the ‘old redistribution’ (status quo) and it continues unabated towards only a few.

It certainly isn’t due to people spending all their time in bloggers’ comments sections.

Whatever you “save” via the mortgage interest deduction is passed right along to the bank. All the deduction does is artificially inflate real estate prices.

I want to add to my thoughts above. I think that instead of a frozen type penalty box as I stated above, we should take all insovlvent institutions over to the penalty box. First, to get operating capital for the penalty box, they would be required to sell any worthwhile instruments to solvent institutions first. Once in this penalty box, these institutions would be free from most accounting rules, a truly free-for-all-market. They could intereact with each other using Monopoly money if they choose, but any and all interactions with the real world would be on a cash only basis. This would create a separated market to work out solutions, a Fart Market if you will. Eventually, the workouts will dwindle and this separate market will ultimately fade, but it would give a oportunity to some bright individuals to make some money.

I want to add to my thoughts above. I think that instead of a frozen type penalty box as I stated above, we should take all insovlvent institutions over to the penalty box. First, to get operating capital for the penalty box, they would be required to sell any worthwhile instruments to solvent institutions first. Once in this penalty box, these institutions would be free from most accounting rules, a truly free-for-all-market. They could intereact with each other using Monopoly money if they choose, but any and all interactions with the real world would be on a cash only basis. This would create a separated market to work out solutions, a Fart Market if you will. Eventually, the workouts will dwindle and this separate market will ultimately fade, but it would give a oportunity to some bright individuals to make some money.

the land is taxed, though usually the structure causes most of the taxes. but people need land to live on so it is valuable despite the tax stream they will have to pay.people also need houses to live in. thus the houses have value despite the ongoing maintenance they require.houses eventually wear out and need replacement. eventually this will reduce the overhang of housing supply we now see.

Hang in there, as fossil fuels deplete you’ll find that there’s going to be an increasing need for human labor…

ORIGIN OF THIS MELTDOWN: easy credit leading to housing bubble + inadequate laws and regulation by Congress and Fed (Greenspan)+ irresponsible exploitation of those laws and loopholes by wall street (greed).GOVT SOLUTION: keep pouring money over the problem and buying up bad debt from banks, insurance cos, auto, etc.MY SOLUTION: “the more complex and opaque a system is, the more difficult it is to properly manage and those at the top always suffer less than the rest”! Therefore, revamp the entire system with simplicity and transparency; i.e. KISS!!!!!!!!

@ GuestYes, I originally felt similar, but it would be akin to divesting a division of a corporation as a spin-off. Current shareholders and creditors would get proportional portions of equity and debt of the moved entity unless their debts or any pledged collateral are tied to specific assets, which would then casue their interests to migrate to wherever the tied assets go.

Thank you Guest, but it is confusing, since you clearly aren’t the same Guest who I responded to.

well done

Yeah, that’s what it look like up here on Mars too!

as languages have disappeared do you think the world could go down to three currencies?

Simple Question ….If you had the luxury of designing a compensatory system (a system of rewarding others for use of their time, talents, or treasure) from scratch, would you come up with anything close to the current system?If so Why?If not, Why not?

I have a bad habit of mixing metaphors – either way the die has been cast or should I say Pandora’s box has been opened:-)

The system must fail

firstly, definitions of words relating to economics must all mean the same. no lines to read betweenall children on the planet should be in FREE education centers/student exchanges and not forced into working.the new infrastructure would be air,water,soil,not bridges going nowhere!

The system has fallen. What you are looking at is a zombie system run by zombies.Let’s start a revolution based on increased individually enforceable rights: only individual rights regulate an economy. Any other “regulation” is simply police state manipulation, with destruction of individuals as its method.Notice all these monkeys cited by Nouriel: not ONE–not ONE–says: Gee, maybe the problem is that people are rights starved. Maybe they need more rights they can enforce.NEVER. NEVER a word about rights. It’s all about, “We know better. WE know what’s right for YOU. Let US rule.” NEVER: “Power must be taken AWAY from the political system and put in the hands of INDIVIDUALS.” NEVER: these police state monkeys would rather DIE than expand individual rights.

Don’t be fooled by the Swedish or any other Euro social model. Social programs in those countries are a matter of grace, not of right. These “rights” were established by the political system, and can be taken away by the political system.A great deal of quiet research has already been done in the United States, and you can see it reflected in such things as the “Patient Bill of Rights” and other “bills of rights.” Outside the megalomaniac political system, people have been discussing facts, which facts seem to be unchanging facts of human experience and so need to be removed from the political system by having more individually enforceable rights in those facts.This was the phenomenon I studied in The Eminent Domain Revolt, and the reason I keep hustling the book is that–although I have no sympathy for many of the groups–I actually took the time to LISTEN to see what concerns even right- or left-wing nut case groups. What FACTS are they discussing? and how?The result is that we are moving slowly but surely toward a new bill of rights, and the “black letter law” (as it’s called in the trade) looks like this:1. No individual shall be involuntarily deprived of liberty;2. No individual shall be involuntarily deprived of maintenance;3. No individual shall be involuntarily deprived of housing;4. No individual shall be involuntarily deprived of education;5. No individual shall be involuntarily deprived of medical care.Do we know exactly what is meant by liberty, maintenance, or even housing? Nope. But in the United States, Constitutionally speaking, there arrives a certain point at which public opinion concludes that ENOUGH is known about these facts to conclude that they are unchanging facts of human experience–important facts–and so must be removed from the political system. If you know anything about the law, you will know that this language definitely takes these facts OUT of the political system and definitely puts power over them INTO the hands of individuals.Do we know exactly what an “exercise of religion” is? Do we know exactly what “gender legal equality” is? Do we know exactly what “protected speech” is? No–and guess what? We never will. But it is by dispute that we LEARN what the facts are.In my book, I was surprised to find out that1. not only does the law not tell us what property is, but also, people themselves have an unclear idea of what property is;2. people–although they talk a GREAT deal about “property rights”–really don’t know whether they want it taken out of the political system or not.Therefore, you will see that the above new rights do NOT includeNo individual shall be involuntarily deprived of property.Surprised? Look into YOURSELF if you are surprised. You will be surprised how ignorant you are of what, in FACT (not in LAW–not property INTERESTS) property is.It should be no surprise that the West Coast Hotel “scrutiny” regime is collapsing, because it was always a mishmash of prejudice, corruption, insight, self-interest, woozy idealism–a lot of garbage. But as Barbara Stanwyck once said, “Hell, it worked.”But it was never going to work forever, it was not supposed to work for ever, and now it won’t ever work again.That’s the problem with these “bridge to nowhere” stimulus proposal by Nouriel and these other clowns. What they don’t understand is this:all stimulus programs presume the same lack of rights which caused the problems in the first place.The problem is not “systemic risk,” the problem is not “infrastructure,” or “credit” or anything else.I’ve said it before and I’ll go on saying it:the problem is lack of individually enforceable rights.Wake the hell up.

http://www.c-spanarchives.org/library/includes/templates/library/flash_popup.php?pID=282106-1&clipStart=&clipStop=Link to the archive if anyone wants to watch…

The public policy edge of managing this global financial crisis has been focused on opening up the credit markets and re-establishing solvency in select financial institutions. As emergency interventions they represent a monumental attempt to resuscitate a seriously damaged global economic system. The actual results, so far, have been only marginally convincing, if at all convincing, as to their successful outcome.It is more than a little ironic that a primary reason this state of affairs arose is because of imprudent lending decisions. Financial institutions damaged their balance sheets, to the point of impairing their continuing business viability. Credit markets contracted and liquidity dried up. Credit is the lifeblood of our global economic system. Unfortunately, or fortunately as the case may be, prudent extensions of credit are based upon the credit worthiness of the borrower.It should be fairly clear, by the increasing foreclosures and bankruptcies, that prospective borrowers do not, in general, represent good credit risks at the present time. It is also widely agreed that we are looking at a potentially severe and drawn out recession (depression?). We can reasonably expect that prospective borrowers will find themselves in even more distressed economic circumstances in the near future. As such, one must ask why a lending institution, after already getting its fingers burned through imprudent lending practices, would want to extend credit to prospective borrowers with deteriorating solvency prospects.Additionally, the question should also arise as to why, a borrower already overextended, and facing a deteriorating economic picture, would wish to borrow more, other than as an act of desperation, or other irrationality. Perhaps it is a case of “if there is nothing left to lose, why not go for broke at the expense of an imprudent lender.”It is not surprising then that despite massive capital injections, the credit markets are still sluggish. After shoring up their balance sheets, at public expense, lending institutions have are possibly returning to their roots of being some of the more rational players (this is not a bar to cross these days) in their economic and business decisions. The wiser deployment of capital would be to acquire distressed assets rather than extend credit to borrowers with poor prospects.The dilemma facing policy-makers is still how to prevent, or at least mitigate, a global economic slowdown. What are the drivers of economic growth to be if growing debt financed consumption cannot be counted on? Several possibilities arise. As an example, China, and the Asia region, has the potential of stimulating their own internal domestic consumption. Inflation fears may have restrained efforts in this regard before. Now, however, prospects of an economic slowdown, and a more benign (at least for the time being) inflation outlook may open this up as an expeditious policy direction.From the perspective of the West, the United States in particular, there is a great deal that needs to be done to re-establish a strong and competitive economy. There are immense infrastructure needs and well as immense needs to fortify the intellectual capital base of the country through adequate funding of education and research. An assessment needs to occur in order to determine what the competitive and comparative advantage and long-term needs of the United States really are. This needs to be done in the context of the United States as a global citizen and its constructive relationship to other global economic players. Once this is determined focused attention and political will must be directed in this direction.Ryan Darwishwww.investmentmegatrends.com

Who the hell is going to “revamp” the system when the politicians are the only ones making out like bandits in teh current system??? That is like asking a stock broker to quit selling stocks to his clients becuase we are in a bear market and they are going to lose money! You think the citizens of this country oare going to do whats necessary to make sure these idiots are voted out? HEll no, tehy have put up with negative real wage growth and the farming out of American jobs by the MILLIONS for the last decade!

not just americans there is no such thing as independent

AP, DALLAS — A Texas woman went to a housing auction distraught about the prospect of watching strangers bid on her foreclosed home.Then one of those strangers bought it back for her.Now Tracy Orr can return to her Pottsboro home, making payments to the woman who unexpectedly and impulsively bought it for her.”It means so much to all of us,” Orr told Dallas television station WFAA. “It’s not just a house.”Marilyn Mock said she was acting on instinct on Saturday when she decided to buy a house she had never seen for a woman she had never met. Mock was at the foreclosure auction to help her 27-year-old son bid on a house when she struck up a conversation with Orr, who was crying about losing her home.Orr had bought the house for $80,000 in 2004 but fell behind on the payments. She lost her job a month after taking out the loan, and earlier this year she lost the house. On the spot, Mock decided to buy it, eventually bidding $30,000.”She didn’t even know if I had a job or was a nut case,” Orr said in a story for Wednesday’s online edition of The Dallas Morning News. “She didn’t even see a picture of the house.”

and their will never be enough jobs and what are 50/60 year old going to train into? Maybe we are at Rifkin’s theory “The End of Work”

@PeteCAWhere would the money go?

@ JRJohn you can be quite lucid at times. I have to say that many times I skip your posts, not to ignore you, but because I just can’t connect your dots most of the time. This time, I saw a glimmer of light through your fog.Let me ask you this. If we increase the housing scrutiny as you suggest, would it allow for people to involuntarily be moved to a like or better house, or would that be strictly prohibited?

@ Lord SidcupThanks for your input from Sweden. My question would be this. Knowing what you know about Sweden and postulating such a situation in the US, how would you sell such an idea to the average citizen who is fed-up with paying taxes in the first place?

1:59 p.m.Hartford Financial loses half its market value on capital concern

ALERT!!Cellini indicted. Just came over the wire. I think “a certain public official” referred to here is Obama. It could be Blago, but what this means is that they are very close to Obama, who was deeply involved in this matter. Stay tuned! I have long said that Obama will be indicted under 18 USC 1346 because he is a creature of Rezko and the Syrian mafia. This makes it much more likely and that it will happen fairly soon:William F. Cellini, Sr., Indicted for Alleged Role in Defrauding Teachers Retirement System with Rezko, Levine and OthersYOU SHOULD GOOGLEUnited States Attorney Northern District IllinoisThe sooner we get rid of this cheap pimp Obama, the better.

If you have free time to kill, feel free to wander over to the Global Macro Economonitor for my 2nd contribution.I hope you enjoy my less then educational post.Thanks, Miss AmericaHere’s the link:http://www.rgemonitor.com/globalmacro-monitor/254214/trick_or_treat

GONNA LAUNCH!!! UP 300 COMIN!

HERE IS THE FULL REPORT ON CELLINI FROM THE U.S. ATTORNEY’S CITE. BELOW IT IS EVELYN PRINGLE’S DISCUSSION OF OBAMA’S ROLE IN THE CONSOLIDATION LEGISLATION. BLAGO IS CLEARLY PUBLIC OFFICIAL A. OBAMA IS PROBABLY CO-CONSPIRATOR A. IF NOT, THE STATEMENT THAT CELLINI RAISED FUNDS FOR OTHER PUBLIC OFFICIALS, IS AN INDICATION THAT OBAMA IS TO BE ROPED IN UNDER 18 USC 1346 FOR HIS ROLE:CHICAGO –A longtime political insider in Springfield was indicted today on federal corruption charges for allegedly conspiring with two Chicago businessmen and others to obtain political contributions for a certain public official by shaking down an investment firm that was seeking a $220 million allocation from the state Teachers Retirement System (TRS.) The defendant, William F. Cellini, Sr., was charged in a four-count indictment returned by a federal grand jury, announced Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois.Cellini, 73, of Springfield, had longstanding relationships and influence with TRS trustees and staff members and was associated with Commonwealth Realty Advisors, Inc., a real estate asset firm that managed hundreds of millions of dollars on behalf of TRS, according to the indictment. He also raised significant funds for Public Official A, among others. He was charged with one count each of conspiracy to commit mail fraud, extortion conspiracy, attempted extortion and soliciting a bribe. He will be arraigned at a later date in U.S. District Court.Cellini’s alleged crimes – essentially conspiring with others to force Capri Capital, also a real estate investment firm, and Thomas Rosenberg, a principal and part owner of Capri, to raise or donate substantial political contributions for Public Official A – were the subject of testimony earlier this year at the trial of alleged co-conspirator Antoin “Tony” Rezko. Cellini was charged with conspiring with Rezko, former TRS trustee Stuart Levine, the pension fund’s outside lawyer Steven Loren and others between the spring of 2003 and the summer of 2005 to defraud TRS beneficiaries and the people of Illinois of Levine’s honest services as a TRS trustee. TRS, a public pension plan for teachers and administrators in public schools statewide except in Chicago, serves hundreds of thousands of members and beneficiaries and has assets in excess of $30 billion.Cellini is the 13th defendant charged as part of Operation Board Games, an ongoing federal public corruption investigation of insider-dealing, influence-peddling and kickbacks involving private interests and public duties related to various state boards and non-profit organizations.Mr. Fitzgerald announced the charges with Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Alvin Patton, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago; Thomas P. Brady, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago; and James Vanderberg, Regional Inspector-in-Charge of the U.S. Department of Labor Office of Inspector General.According to the indictment, in the spring of 2003, Cellini and Levine agreed to oppose a proposal to consolidate TRS with two other state pension plans because they feared their control and influence at TRS, as well as the profits received by Commonwealth Realty Advisors, would be threatened. Cellini and Levine further agreed to seek help from Rezko and Co-Conspirator A in defeating the consolidation plan, with all four eventually agreeing that Cellini would use his influence at TRS and Levine would use his trustee position to hire investment firms that made contributions for the benefit of Public Official A. Cellini, Rezko, and Co-Conspirator A knew that Levine agreed to use his influence and position at TRS to help firms that had made contributions for the benefit of Public Official A, even though Levine understood that those firms were being chosen based on their political contributions and not on their merit.Between February and April 2004 – at the same time Commonwealth Realty Advisors obtained allocations totaling $220 million from TRS – Cellini, Levine, Rezko, and Co-Conspirator A allegedly conspired to use their influence and Levine’s position at TRS to prevent Capri Capital from receiving a planned $220 million allocation of TRS funds unless Rosenberg and Capri agreed to raise or donate a substantial amount of funds for the benefit of Public Official A. In early May 2004, after conversations with Levine, Cellini agreed to and did tell Rosenberg that Capri was not going to receive its $220 million allocation because Rosenberg had not made a significant political contribution for the benefit of Public Official A, the indictment alleges. Once Rosenberg understood the reason Capri was not receiving funds, Cellini and Levine agreed that Cellini would direct Rosenberg to talk with Levine to arrange making the necessary contributions, the charges state.Cellini allegedly reported back to Levine that Rosenberg would not be extorted and threatened to expose their plan to law enforcement. Cellini, Levine, Rezko, and Co-Conspirator A allegedly agreed it was too risky to continue demanding money from Rosenberg and Capri or blocking the $220 million allocation. They further agreed that, although Capri would receive the pension funds for investment purposes, Capri and Rosenberg would not receive any further business from the State of Illinois, the charges allege. In late May 2004, just five days after Levine was confronted by federal agents, Levine and the TRS board voted to allocate $220 million to Capri.As part of the conspiracy, Cellini, Rezko, and Co-Conspirator A also allegedly agreed to and did engage in secret communications with Levine, other TRS trustees and staff members, including TRS Staffer A, concerning official actions pending before TRS. Cellini was aware that Levine concealed from and failed to disclose to the TRS board the existence of these secret communications, the charges allege. In the summer of 2004, Cellini, Rezko, Co-Conspirator A, and others allegedly discussed moving TRS Staffer A from his position at TRS into another job with a different state entity in an effort to ensure that TRS Staffer A would not cooperate with the government. And, in or around the summer and fall of 2004, in an effort to conceal the conspiracy, Cellini, Rezko and others discussed the possibility of removing the U.S. Attorney for the Northern District of Illinois in an effort to stop any investigation into the co-conspirators and others, the indictment alleges.The government is being represented by Assistant U.S. Attorneys Christopher Niewoehner, Carrie Hamilton and Reid Schar.If convicted, the charges carry the following maximum penalties: conspiracy to commit mail fraud – 5 years in prison; extortion conspiracy and attempted extortion – 20 years in prison; and soliciting a bribe – 10 years in prison, and each count carries a maximum fine of $250,000. The Court, however, would determine the appropriate sentence to be imposed under the advisory United States Sentencing Guidelines.ON THE ROLE OF THE SLIME OBAMA:The first case of many to go to trial resulting from the Operation Board Game investigation is being referred to as the “biggest political corruption trial” since former Illinois Governor George Ryan’s trial two years ago, in the Chicago media.In this case, the Syrian-born immigrant, Tony Rezko, is facing 24 total counts of wire and mail fraud, aiding and abetting a solicitation of bribery, money laundering and attempted extortion. Rezko supported Republican George Ryan in his campaign for Governor.The former Governor began serving a 6-year-plus prison sentence in November 2007, for charges that included racketeering, bribery, extortion, money laundering and tax fraud. On April 17, 2006, US attorney, Patrick Fitzgerald, told the New York Times the verdict was gratifying but the widespread corruption was “disturbing.”"Mr. Ryan steered contracts worth millions of dollars to friends and took payments and vacations in return,” Fitzgerald said. “When he was a sitting governor, he lied to the FBI about this conduct and then he went out and did it again.”In 2002, Rezko backed Rod Blagojevich for Governor. Back on January 12, 2005, the Chicago Tribune reported that Blagojevich had collected more than $36.4 million in donations in four years. By comparison, it took former Governor Ryan, “once considered a powerful fundraiser, 30 years in public life to raise $40 million,” the report said.Until Ryan left, Republicans held the governor’s office for nearly 30 years. Democrat Blagojevich took office in January 2003, and between then and when the same US attorney, Patrick Fitzgerald, intervened on May 20, 2004, a plan was put in place to bilk roughly $8 million from persons and firms seeking to do business with the state of Illinois.As discussed previously in this series, Governor Blagojevich was supposed to be the presidential candidate in 2008, not Obama.In her opening statement in the Rezko trial on March 6, 2008, Assistant US attorney, Carrie Hamilton, pointed out that thousands of teachers and hospital patients across the state could have been harmed by the rigging of decisions of state boards that invested teacher pension funds and approved hospital expansion projects.The trial ended May 13, 2008 and the jury is deliberating. Assistant US Attorney, Reid Schar, delivered the closing argument for the government. Attorney, Joseph Duffy, argued on behalf of Rezko, and Assistant US Attorney Christopher Niewoehner delivered the rebuttal.The leader of the Board Game investigation, Fitzgerald, sat in court in the front row listening as Schar recounted testimony from witness, Ali Ata, who said Rezko told him, “Do not cooperate with the government, don’t worry, the top federal prosecutor, Patrick Fitzgerald, will be replaced.”Ata entered a guilty plea in another Rezko fraud case a week before the trial was set to end and agreed to testify as part of a plea agreement. During his testimony, Ata told the jury he spoke with Rezko as late as 2006, and Rezko told him “the plan will turn out just fine once the new U.S. Attorney gets into office.”"This is a crime that involves the highest levels of power in Illinois,” Assistant US attorney, Niewoehner told the jury in closing arguments.This was a crime that had an impact on where hospitals would be built and where billions in retirement money for the state’s teachers would be placed, the prosecutor said.This case “is about the defendant’s, Tony Rezko’s, corrupt use of his power and influence to benefit himself and his friends over the people of Illinois,” Assistant US attorney, Schar told the jury.Rezko was an insider who schemed to corrupt public officials for personal gain, he said. Throughout the trial, prosecutors referred to public “officials,” as plural.Schar said Rezko’s ability to raise funds for Blagojevich bought him “access and clout” which he used to launch his scheme. Rezko was just one player, albeit an important one, in a network of corruption deeply rooted in Springfield and Chicago, according to Schar.”He became part of a corrupt ring of individuals — a corrupt scheme that existed in the State of Illinois,” Schar said. “He joined the corrupt scheme, he acted in furtherance of it and he did it for money.”There was no mystery about how Rezko gained control over the Teacher’s Retirement System board and the Health Facilities Planning Board to pressure companies and individuals hoping to get state business for kickbacks, Schar told the jury.”The answer to that question is access and clout and it stems from Rezko’s ability to raise a lot of money,” Schar said. “He is one of the top fundraisers for Gov. Rod Blagojevich,” he noted.Rezko gained power over the Planning Board by stacking it with members whose vote he could control, Schar said. The chairman was reappointed after delivering a $1,000 contribution to Rezko for Blagojevich and two others contributed $25,000 before getting appointed.Rezko could not set up the schemesTony Rezko is a private citizen. Therefore, the evidence presented in the trial focused on his influence over officials in getting members appointed to the Boards. Prosecutors did not discuss how the legislation got passed that enabled the Planning Board to be set up in a way that allowed for the appointment of members to rig the votes to begin with.That part of the scheme will likely be detailed in future indictments, probably starting with Blagojevich. Blagojevich signed the Illinois Health Facilities Planning Act with an effective date of June 27, 2003. However, before he could sign the act, a bill had to be passed by the Illinois House and Senate. As discussed fully in Curtain Time Part II, Obama was the inside guy in the senate who pushed through the legislation that resulted in the Act.Obama was appointed chairman of the Senate Health and Human Services Committee. The minute the bill was introduced, it was referred to his committee for review. The sponsors of the bill also served on this committee with Obama. Within a month, Chairman Obama sent word to the full senate that the legislation should be passed.On May 31, 2003, Senate Bill 1332 passed and specified that the “Board shall be appointed by the Governor, with the advice and consent of the Senate.” The legislation reduced the number of members from 15 to 9, paving the way for the appointment of a five-bloc majority to rig the votes.The corrupt members appointed included three doctors who contributed to Obama. Michel Malek gave Obama $10,000 on June 30, 2003 and donated $25,000 to Blagojevich on July 25, 2003. Malek also gave Obama another $500 in September 2003.Fortunee Massuda donated $25,000 to Blagojevich on July 25, 2003, and gave a total of $2,000 to Obama on different dates. After he was appointed, Dr Imad Almanaseer contributed a total of $3,000 to Obama. Almanaseer did not give money to Blagojevich.When the first pay-to-play scheme was put in play, and the application for approval of a new hospital was submitted, the Department of Human Services, along with four other Illinois agencies, sent recommendations that the project should be approved even though experts said the hospital was not needed.During the trial, Rezko’s attorney presented an email exchange to the jury that hinted at Obama’s role in setting up the scheme. The exchange showed that Obama and seven other top Illinois politicians consulted on the legislation passed in 2003 and were involved in recommending the members for the board.Matthew Pickering wrote the memo to Blagojevich’s general counsel, Susan Lichtenstein, on behalf of David Wilhelm, a former chairman of the Democratic National Committee, who headed Blagojevich’s 2002 campaign for governor.Pickering said he and Wilhelm had “worked closely” over six months with state legislators. The memo recommended the appointees listed above and stated, “our attached recommendations reflect that involvement” with the political leaders.The persons appointed to rig the votes, including those who contributed to Blagojevich and Obama, are cooperating in exchange for immunity or lighter prison sentences.Feds shut down pay-to-play schemesOnly two pay-to-play schemes succeeded before the Feds swooped in and shut them all down. Blagojevich did not receive the $1.5 million from the Planning Board deal because the hospital was never built.But Obama received $20,000 from the first kickback paid in the pension fund scheme and the straw donors used to funnel the $10,000 payments, Elie Maloof and Joseph Aramanda, also made $1,000 contributions to Obama’s failed run for Congress in 2000.In addition, Aramanda gave $500 to Obama’s senate campaign on June 30, 2003. In the summer of 2005, Aramanda’s son landed an intern position in Obama’s Washington office.Obama also received contributions for his senate campaign from the two persons appointed to rig the vote on the pension fund board. On June 30, 2003, Jack Carriglio contributed $1,000, and the other appointee, Anthony Abboud, donated $500 on June 30, 2003, $250 on March 5, 2004, and $1,000 on June 25, 2004.The person chosen to funnel the kickback in a future scheme, Michael Winter, donated $3,000 to Obama on June 30, 2003.All these people are also cooperating in exchange for immunity or lesser prison sentences but prosecutors pointed out during closing arguments that people who entered into agreements with the government are required to tell the truth or all deals are off.Obama’s political GodfatherDuring the Rezko trial the jury saw an exhibit that credited Rezko with raising $1.44 million for Blagojevich.In his closing argument, Rezko’s attorney, Joe Duffy, told the jury: “The evidence shows Rezko spent more time in 2003-2004 fundraising for St Jude’s Children’s Hospital, George W Bush and Barack Obama, then he did for Illinois Governor Rod Blagojevich.”During his opening statement in the trial, Duffy also pointed out that Rezko had raised money for many politicians and specifically named Obama.The fact is, in addition to being his real estate fairy for the $2 million mansion, Rezko is Obama’s political Godfather. His career in politics was launched on July 31, 1995, with contributions of $2,000 from Rezko for the Illinois senate campaign. Obama only raised about $100,000 for that race, with roughly $15,000 coming from Rezko.After Rezko was indicted in October 2006, Obama claimed Rezko only raised $50,000 or $60,000 over his political career. This is the story he gave in the media for more than a year. But the total amount revealed during interviews with the Chicago Sun-Times and Tribune on March 14, 2008, added up to a quarter million.Several of the people who led Obama’s corrupt finance committee for the US senate race with Rezko, and collected all the contributions from the people involved in the pay-to-pay schemes, are now running the show for his presidential campaign.For reasons discussed in Parts I through V of Curtain Time, Obama’s downfall will be what he claims was a “boneheaded” mistake in entering into real estate deal with Rezko in June 2005, less than a month after Rezko received a $3.5 million loan from the Iraqi-born billionaire, Nadhmi Auchi, who ended up with Riverside Park, a $2.5 billion 62-acre development project in Chicago.However, judging from the indictments in Board Games unsealed so far, Obama’s legal culpability at this point anyways, stems from his involvement in setting up and receiving money from the pay-to-play schemes.

How the US citizen has been conditioned: The Century of Self – a series by Alan Curtis.Part 1part 1part 2part 3part 4Each part is about 60 minutes duration.

If GMAC is a bank, then Harley Davidson must definitely be a bank too! After all, they finance motorcycles. I want a ride-through bank that accepts the “Sons of Anarchy” – they’re probably the only people left holding any real cash in this country.

Loser.

More F’ing begging for my damn money!2:40 p.m.Six governors ask Treasury for aid to auto makers: WSJ

Treasury sales could top $1 trillion to fund bailoutU.S. could also bring back 7-year note, do more frequent salesBy Deborah Levine, MarketWatchLast update: 1:50 p.m. EDT Oct. 30, 2008NEW YORK (MarketWatch) — Major bond dealers say the United States may have to issue more than $1 trillion in debt during its current fiscal year, by far the most ever, to fund massive programs designed to bail out the banking system.That would be a “staggering” increase from recent years, said Michael Cloherty, an interest-rate strategist at Bank of America Corp., one of the 17 primary government-security dealers required to bid at Treasury auctions.The Treasury Department will announce Monday how much of that full-year borrowing it anticipates selling in the first half of the government’s 2009 fiscal year, which began this month.

yeah staggering. So staggering that it’s not even close to being practical – or even believable. What’s the bet that the Gov’t gets desperate, takes emergency steps, and the Fed monetizes debt by buying UST’s directly from the Treasury? That injects cash right into the pockets of Uncle Sam.PeteCA

this man sure has had lots of awards. i guess he fooled a lot of peopleAuchi has received numerous awards and decorations over the years.1996 — the Tunisian president Zine El Abidine Ben Ali decorated him as an Officer of the Order of the Republic.2002 — awarded the Grand Cordon of the Order of Independence by His Majesty King Abdullah II of the Hashemite Kingdom of Jordan.2003 — awarded the Sacred Military Constantinian Order of Saint George with the honour and dignity of Knight Grand Cross of the Royal Order of Francis I in recognition of his major contributions to inter-church and inter-faith dialogue.2004 — Her Majesty Queen Elizabeth II granted him his Coat of Arms.2004 — the President of the Republic of Lebanon, General Emile Lahoud, awards Mr Auchi with the First Grade of the Lebanese Order of Merit having already appointed him as a Commander of the National Order of the Cedar in 2000.2004 — knighted by the late Pope, His Holiness John Paul II with the Pontifical Order of Pope Saint Sylvester in 2004.2005 — made Grao-Mestre da Ordem do Merito Anhanguera in Brazil and was elected as an Honorary Member in the International College of Surgeons in Chicago, Illinois.2007 — awarded the Presidential Prize by the President of the American University in Cairo (AUC) in appreciation of his efforts in supporting higher education in the Arab World. In particular, Auchi, in collaboration with the AUC launched a fellowship for young Arabs studying institution management and leadership

IN CASE YOU WERE WAITING FOR THE ‘OCTOBER SURPRISE,’ HERE IT IS. OBAMA IS VERY CLOSE TO BEING INDICATED.REZKO/OBAMA UPDATE:This is from the Cellini indictment, available on the website of the United States Attorney for the Northern District of Illinois:The Conspiracy To Defraud2. Beginning no later than in and about the spring of 2003 and continuing through in or about the summer of 2005, in the Northern District of Illinois, Eastern Division, and elsewhere,WILLIAM F. CELLINI, SR., defendant herein, together with Stuart Levine, Antoin “Tony” Rezko, Steven Loren, Co-Conspirator A, and others known and unknown to the Grand Jury, did conspire and agree with each other to commit offenses against the United States, namely, to devise and participate in a scheme to defraud the beneficiaries of TRS and the people of the State of Illinois of their intangible right to Levine’s honest services, and it was foreseeable that for the purposes of executing and attempting to execute such scheme, one or more members of the conspiracy would use and cause the use of the United States mails and private and commercial interstate carriers, and the transmission of a wire communication in interstate commerce, in violation of Title 18, United States Code, Sections 1341, 1343, and 1346.”OTHERS KNOWN…TO THE GRAND JURY” INCLUDES OBAMA. “CO-CONSPIRATOR A” IS A CHICAGO BUSINESSMAN.6.It was further part of the conspiracy that, as CELLINI knew, Levine concealed from and failed to disclose to the TRS Board material facts concerning the benefits that Levine sought to obtain for and on behalf of CELLINI, Levine, Rezko, Co-Conspirator A, Public Official A, and others from official actions taken by TRS.OBAMA IS ONE OF THE “AND OTHERS.”8.It was further part of the conspiracy that CELLINI later told Levine that Rezko and Co-Conspirator A had agreed to the proposal to use their influence with high-ranking State of Illinois officials to oppose the pension consolidation plan in exchange for CELLINI’s agreement to use his influence at TRS and Levine’s position at TRS to ensure that TRS invested money with and hired firms chosen by Rezko and Co-Conspirator A.OBAMA IS ONE OF THE “HIGH-RANKING STATE OF ILLINOIS OFFICIALS”.

i thought along with freedom that one was presumed innocent and had to be proven guilty

please stop it or I will switch from third party to obama.

Homeowners reeling from revaluationsProperty Updates; Retiree vows to appeal ‘outrageous’ 52% increaseAllison Hanes, National PostMany Toronto homeowners are suffering assessment shock after receiving new estimates of their home’s value, including a North Toronto man whose house has shot up 52% …Another property owner, who doesn’t want his name used while he appeals his assessment, told the National Post that he called MPAC and offered to vacate his home in two weeks if the agency wrote him a cheque for what they say his property is worth.”I was met with dead silence, of course,” said the resident of the Bathurst and Wilson area.

this is a bunch of republican bullshit trying to discredit this country’s only chance at a smart individual getting in the White House. Please stop the political BS on this blog. Stick to the financials.

MANIC BUYING INTO THE CLOSE!~

Rally material for tomorrow! LOLOL4:01 p.m.[JAVA] Sun Microsystems Q1 rev $2.99 bln vs $3.22 bln4:01 p.m.[UNM] Unum Group Q3 revenue $2.44 bln vs $2.61 bln4:01 p.m.[JAVA] Sun Microsystems Q1 net loss $2.24 vs profit of 10c a share

Hardly. Look at how intimately Cellini is connected to the gang. He’ll have PLENTY to indict Obama with:During the trial, Stuart Levine testified that when he sought reappointment to the Planning Board,he told Republican co-schemer, Bill Cellini, to tell the Blagojevich administration he would votehowever they wanted when approving projects.He told the jury he had the same understanding with the two prior Republican governors, JimEdgar, and George Ryan, who is now sitting in prison due to Fitzgerald’s successful prosecutionof a corruption case against him.A June 2003 email exchange produced in the trial shows Obama was one of eight officials whoreceived the names of the nominees for the new Board ahead of time, from the office of DavidWilhelm, who headed Blagojevich’s 2002 campaign for governor.Tony Rezko’s name does not appear in the email. In fact, his attorney made the point to the jurythat the exchange was from Blagojevich’s general counsel, Susan Lichtenstein, and Wilhelm’s office,and indicated the appointees were recommended by Wilhelm and supported by those whoreceived the memo.The memo said, “we worked closely over the past six months” with eight officials including threestate senators.Jennifer Thomas, a former aide in Blagojevich’s patronage office, testified that she attended regularweekly meetings at Rezko’s office between the spring of 2003 and November 2004, and Rezkofloated names and specifically said Levine should be reappointed to the new Board….The Senate bill said, the “Board shall be appointed by the Governor, with the advice and consentof the Senate.” But the Senate Confirmation Hearings were a joke. For instance, the Feds recordedLevine talking to co-schemer, Jon Bauman, the day Levine learned he was approved by the Senatefrom the executive secretary of the Board.Levine told Bauman he ran into Jeffrey Marks, who said “congratulations on your appointment,”and Levine asked for what. Marks said, “well the Senate Confirmation Hearings on Health FacilityPlan Board members.”He told Levine Senate President, Emil Jones, only allowed 2 members to be approved and “thatwas you and the other person he just put in.”…”Isn’t that hysterical ’cause you know they had this big battle going on,” Levine told Bauman….Laughing away, Levine said, “don’t you just love it.”…”I’m one of those independents and not part of the block.”…”Well, good, you know it’s good to be just a true independent civil servant,” Bauman said laughingalong with Levine.

Long end of the curve headed much higher!

The House of Morgan did create teh entire banking cartel, including the Fed ya know…things that make you go Hmmm…..

Thanks as always – in too high and out too low but still green for the day

This posting about Obama is about as interesting as going to a political website and reading about economics – boring. Regardless of the worth of the reporting, IMHO this blog community is better served when the posts are at least tangentially connected to the article. Most of your posts previously at least had some connection to the article – however tangential. You appear to be straying vendetta like about Obama – free speech is ok but other blogs may be more appropriate. Just a thought.

The rumor I saw (not on the public internet) is extremely vague and it doesn’t call for a complete demise of the mighty one.I agree, the Treasury of the United States will go bankrupt before Goldman.What’s written on your Federal Reserve Note? “In Goldman Sachs we trust”

Friggin OUT OF CONTROL!!!4:36 p.m.Fed extends $922 billion in loans as of Wednesday4:36 p.m.Fed buys $144.8 billion in commercial paper this week4:36 p.m.Federal Reserve balance sheet tops $2 trillion

WOW! This is not going to end well. It’ll take some time thou.

Government job.

JOHN WILLIAMS’ SHADOW GOVERNMENT STATISTICS – FLASH UPDATE – October 30, 2008 – Gimmicked GDP Overstatement Continues, Despite Reported Contraction GDP Inflation Hits 18-Year High

Narrower-Than-Expected GDP Contraction Is Nonsense. The difference between the reported 0.3% annualized Gross Domestic Product (GDP) and the consensus expectation of a 0.5% contraction is no more than statistical noise, yet the reported result most certainly was manufactured so as to allow the hypesters on Wall Street and in Washington to spin their fairy tales of a “less-severe recession” in order to help draw the gullible back into stocks, at least for a day or two before next week’s election. This follows earlier economic scare tactics aimed at the public to help sell the “bailout” package.The 0.3% contraction was a plug number, as its calculation included significant “guesstimates.” For example, the “advance” estimate is based on only two out of three highly volatile and suspect monthly trade reports. The Bureau of Economic Analysis (BEA) could have brought in the reported growth at a small plus, just easily as a small minus, but the credibility of ongoing GDP growth may have reached its limits and was abandoned publicly by the White House, last week. The reported “advance” growth estimate usually is massaged so as to come in close to consensus, in this case a little bit better. Keep in mind that the 0.25% contraction is an annualized rate, only 0.06% ($7.4 billion out of $11,720.0 billion) quarter-to-quarter, a magnitude well within the scope of regular monthly revisions and statistical noise.

What does the “$” sign stand for?Not bad for a beginning.

So you don’t want to be Robespierre 2.0 – but the führer of the desperate. You want to show the “individuals”, who’s to live and who’s to die – and it makes things even worse, that you call human beings “monkeys”.Even if you address some right problems, your answer is definitely wrong. Because your answer is “John Ryskamp”.

is anyone keeping a tally on how much the fed has lent out since the bubble burst? I’m just curious if anyone is keeping tabs? or is there a link to a chart?

The more responses Ryskamp’s gets, the more he posts here. How about just ignoring him.

Sorry, hiring freezes are a-coming in the federal government. And state governments are laying people off.

That’s just silly. People in europe are living in houses hundreds of years old…

Very well said.

HaHaHa how does it feel to get your a$$ handed to you by a black man?

One gazillion dollars.OK, serious now, I have read that the size of the FED balance sheet is $2tn (you may check it out on the FED web site). Up from approx $900bn I think.Remember that quite some credit is extended directly by the Treasury (Fanny and Freddie, TARP(it), etc), and also the FHLBs are quite a bit in the hole with bailout loans.

From the same article:

Now, banks making credit card loans have reached a point where they can lose less by forgiving part of the debt than seeing the consumer walk away entirely.

Aren’t free markets wonderful? whodathunk, lenders themselves asking for debt forgiveness? This is a strong case against much of the rationale behind goverment interventions pumping and pimping trillions of dollars.

You would be surprised at what a 50/60 year old could train into. I know of two ladies that took RN classes and later went on to become RNs in their mid 50s…there are a lot of healthcare positions that a 50/60 year old could go to school for a couple of years for and they are HIRING, not laying off…I’m 55 and I don’t feel like I’m “too old” to do anything I darn well want to…

boy did I mess up my reply….sorry…

Kudlow who was hugely in favor of the 700 billion bailout of the banks doesn’t think the big 3 should get any help, he thinks they should file for bankruptcy and lower bennifits for workers. The elite and their news stations taking the worker out to the woodshed and telling them to bend over.

You’d only have to have been reading it for a few weeks to know the answer to that…

The typical way to do this is to list the house for sale at that price through a real estate agent. If it attracts no bids at that price, then there’s market evidence to support a reduction in assessed value.If he receives a full-price bid, he is still under no obligation to sell it, in the jurisdictions I have lived. He can just say he changed his mind — not that his realtor would be happy with losing a commission that way, but who carea about the realtor’s opinion anyway.

I think it’s coming to an end. They are creating a train wreck.Ben has learned all of the details of what happened in the Great Depression, but he has forgotten what his mother told him, namely, that you can’t have all the toys in the store and not pay for them. And, also, that you can’t have the neighbor kids’ toys, because those are theirs.

@JRI posted a reply to your comment up thread @ By JohnRyskamp on 2008-10-30 13:35:57.I would appreciate your input. Thanks.

It’s infuriating. If I lived on that coast, I would seriously consider doing exactly that, despite the cost of eggs and fruit.

Remember, if you owe the bank $1000, you’ve got a problem. If you owe the bank $2 trillion, the taxpayers have a problem.

AND NOW THE LATEST FROM MY LENDERS: BofA requires 10% up front to release 2nd lien on property and then asks for seller to sign a promissory note for the ENTIRE balance!Citibank-ditto! Primary lenders keep telling me: “the law to help homeowners has not yet been put into effect so we are unable to reduce your principle or your interest rate! But, I thought you were going to help us?Ha, ha, ha. Trick or treat! Well,I guess I’ll be renting!

Unlike most of your comments this one from you makes sense. However after so much drivel and annoyance I doubt he cares to dignify the comment with an answer.You are entitled to boast about your first cogent question, though I suppose. Maybe someone else should ask it.

Pete-I heard a discussion of this and other bonuses and pay-outs to investment banks – on one of the financial channels, can’t remember which — congressmen were saying that they would like to do something about these payouts, but that they could not interfere with “contract rights”, as if these people had some constitutional right to collect under their contracts. This argument is incorrect – employers often withhold funds from employees or principals where their performance has come under review, it happens all the time in my legal experience – they withhold the payments then litigate it. I could not believe that congressional leaders caved on this one, citing the they are bound by the “sanctity of contract law.” It’s all baloney. It’s an inside deal/gift to their friends on wall street.

i never suggested that a person of 50/60 was brain dead i simply was saying that there are not enough jobs for everyone. Whose picking up the education tab?

As far as I’m concerned they have one week to get themselves back to Washington and mitigate the damage they did by passing the Bailout Bill that allowed this, by passing legislation to control this damage. Otherwise they will have all the free time in the world next year.Write a law saying these bonuses are illegal. Let the courts decide whether the companies have a Constitutional right to ignore it.

Congress should pass legislation making any such payment illegal and void, and giving the govt the right to recoup from the partners/employees any payouts made in violation of law.If congress would act with some diligence, it would stick –Congress is just caving on this – the bonus payout seems to make the public very angry, much angrier even than the original bailout bill. It is so obviously Wrong.

Banks are still playing hardball with people, they are acting as if they are still in the drivers seat yet every ticking moment brings closer their demise. Our government and tax payers have ironicaly given them the staying power to demand they be paid in full when very few have the ability nor inclination. I’m loving every minute watching the elitist bankers/government get destroyed by their very own greed.

classic

This was known at the time. Nobody even talked about Treasury getting as good a deal as Buffett, or as the government got out of AIG.They aren’t representing us. Apparently they don’t really do that. So much for representative government, we need a different organic model going forward, we can’t count on Washington to help us.

Nice chart on CR comparing four stock market crashes. They are the program-trading crash in 1987, the oil crisis of 1973-1974, Dot-com bust of 2000-2002, and the Housing bubble/Credit crunch/Insolvency from 2007-to-date.We are presently down ~40% but the Oil Crisis and Dot-Com were down almost 50% and, as you can see from the graphic, we are not even halfway through the process.Now it’s time for your Rorschach test. Vat you sehen in diesem picture? Is um eine bottom Oder sehen sie einen precipice?http://2.bp.blogspot.com/_pMscxxELHEg/SQpCsNiVWuI/AAAAAAAADrc/UFK8UWbFW_w/s1600-h/SP500Crashes.jpghttp://calculatedrisk.blogspot.com/

Can some one locate or create a web site listing the names of the crooks?

Of course they deserve their bonuses! It takes a special kind of executive to screw up a world economy THIS badly! However, I think it that they should have to collect it in person at a special “Economic Darwin Awards” ceremony where they would have to stand in front of everyone and explain why they deserved their bonus. Just a thought….

A mish-mash of pigeon German – Do you see a bottom or the edge of a cliff?

It’s just the top management where payout is public. I remember the old head of MS Commodities, Neal Shear, had misgivings about being promoted to Head of Fixed Income, because his salary would be disclosed publicly, therefore his pay would go down.And sure enough mortgages blew up on his watch, within Fixed Income. He could have kept clean hands and a bigger paycheck if he had followed his instinct this time also and stayed in Commodities.Legislation is required to force disclosure of bonuses. Otherwise we’ll just have to assume that everyone got too much, and go from there.

This is also completely nuts!!!

@Martin Wolf: “Decisions made over the next few months may well shape the world for a generation. At stake could be the legitimacy of the open market economy itself. Those who view liquidation of past excesses as the solution fail to understand the risks. The same is true of those dreaming of new global orders. Let us first get through the crisis. The danger remains huge and time is short.”The crisis calls, not for more establishment economists presuming to make public policy, but for statesmen with the courage to demand solutions BEFORE awarding the perpetrators any more of our citizens’ precious treasure.

link does not work? it sends me to rge home page?

There is a time for anger. That time is now!

Copy and paste into a new tabhttp://2.bp.blogspot.com/_pMscxxELHEg/SQpCsNiVWuI/AAAAAAAADrc/UFK8UWbFW_w/s1600-h/SP500Crashes.jpgMaybe this will workhttp://2.bp.blogspot.com/_pMscxxELHEg/SQpCsNiVWuI/AAAAAAAADrc/UFK8UWbFW_w/s1600-h/SP500Crashes.jpg

If this is really actually happening, have they considered not charging 25+% interest on the cards as a way to alleviate problem versus this extreme measure?

Sorry Yankee. Are you fearing for the worst? Or are they handing out pink slips?

The recent display of power over our U.S. Congress in the Great $700 Billion Robbery was so obvious that no one could miss it.No one can steal like this without possessing total control of the committee chairmen in Congress. What vocation is it in the United States that within two weeks’ time can force Congress to session and force the President to read what it writes? There is only one such vocation – investment banker.The Federal Reserve private banking cartel, in partnership with the self-designated “too-big-to-fail” private banker cartel, have taken full control of the U.S. Congress. Note, it was not U.S. Senate Banking Committee Chair Christopher Dodd who announced that America was in financial crisis – it was a representative of Goldman Sachs.No one can use what Roubini says regarding “unlimited” resources without the functional control of the government: no one can flash a red light or a green light to the President and the Congress without this power.That level of power controls war, domestic policy, foreign policy, health care and off-shoring, borders and pensions, freedom and slavery…And while American is in crisis it is Hank Paulson and Benjamin Bernanke who remain in Washington, daily issuing national statements to the people, positioned in front of Old Glory, allocating the public’s treasury in billion dollar lump sums to banker designees, making world financial decisions based on total control of the U.S. currency, answerable to no one. They stayed: Congress left town.America does not have a financial crisis: America has a constitutional crisis.

Hellasious on the 50 bp rate cut:Wonderful, and how is that going to help, exactly? I mean, help the so-called “real” economy and not the panicky, tormented souls of financial regulators who are grasping at any blow-by straw to make them look like they are “doing something”.Official rates are already so low that another half of a percent will do absolutely nothing to ease the huge debt burden crushing the US economy. An economy that in recent years willingly (or was it, in fact, forcibly?) abdicated its position as a premier manufacturer and heavy duty productive user of capital. Lowering the cost of borrowing would be great – if there were thousands of healthy businesses eager to borrow and apply the funds to new plant and equipment, to hire new workers and to fund research and development. But, there aren’t – that was last century’s economic model.Today we are captives of the Asset Economy, the FIRE Economy, the On-Margin Economy, the Capital Gains Economy, the Debt-Above-The-Eyeballs Economy. What productive use of capital are we talking about now, for heaven’s sake?So what are lower rates supposed to do? Hope that millions of low income Americans will suddenly rush to buy new houses, putting themselves into more hock than they are already? Charge more Christmas trinkets to already maxed-out credit cards and hope the devil doesn’t care? Induce hedge fund managers, who are staring hundreds of billions of liquidations in the face, to rush out and buy more stocks on fresh margin? Make insurance companies underwrite more disastrous credit default swaps?None of the above, of course…http://suddendebt.blogspot.com/

Bloomberg Editors’ Video Picks: Yellen Says Fed May Cut Benchmark Rate Close to Zero. (And as Guest says, Congress went home.)

Guest:Come to think of it, I don’t get much benefit from you either! If I were in charge I would start with YOU to the gulag.

Wall Street Won’t Surrender on Bonuses, Veterans Say (Update1)Oct. 30 (Bloomberg) — Wall Street’s chief executives will hunker down and pay bonuses this year in the face of the worst financial crisis since the Great Depression, a taxpayer bailout and mounting political outcry, industry veterans say.Odds that Wall Street will forgo the payouts are “slim to none,” said John Gutfreund, 79, president of New York-based Gutfreund & Co. and the former chief executive officer of Salomon Brothers Inc…Three of the firms, Goldman Sachs Group Inc., Morgan Stanley and Merrill Lynch & Co., have already set aside $20 billion to pay bonuses this year…House Speaker Nancy Pelosi of California and Senate Majority Leader Harry Reid of Nevada, both Democrats, urged Treasury Secretary Henry Paulson to put restrictions on severance pay for executives that participate in the bailout.The nine companies receiving the initial $125 billion from the Troubled Asset Relief Program, or TARP, are Goldman Sachs, Morgan Stanley, Merrill Lynch, Citigroup Inc., JPMorgan, Wells Fargo, Bank of America Corp., Bank of New York Mellon Corp. and State Street…http://www.bloomberg.com/apps/news?pid=20601109&sid=aX6xQJdexEEo&refer=home

There’s a pretty lass on Bloomberg.com Portfolio Matters: RGE’s Ziemba Sees Risk for Oil Producers, Exxon Mobil. Worth the watch.

Ryskamp:have you read Carol Rose “Property and Persuasion: Essays on the History, Theory, and Rhetoric of Ownership”Any thoughts?What about rights to common property? Communal rights to neighbourhood spaces etc.?

thanks for the tip. Pretty lasses are actually the only reason I come here to Nouriels blog (the financial discussion is totally secondary).

6. Insure that the population is mis informed through propoganda. 7. Academia will mean nothing when we are all making nice gruel in the streets. 8. A sustainable market collapse provides opportunity to ‘educate’, ie I’m paying attention because I’m starving to death.

good points. But when USSR collapsed it was going from nearly “maximum government power over individuals” to “less government power over individuals”. US of A on the other hand is going the other way.

A new London Banker post is up.Byways and Tribal CapitalismI don’t seem to have missed too much in my extended absence from the blogosphere.

Hogwash from Mr. Wolf – a “slump” is just what the doctor ordered…not a global one, but a Western one.More than anything, this is not a financial/economic crisis but a crisis of the “growth above all” model which has taken hold in many countries around the world thanks to American economic propaganda over the past 30-40 years.Most people mistakenly believe that unless the economy is constantly growing and growing and growing everything will collapse. This is an utter falsity. Steady, smart, and clean living should be the goal whilst rampant, unsustainble, and environmentally damaging growth should be avoided.For the international financial/economic elites, ordinary Western citizens do not consume (i.e., “grow”) near enough – and this financial crisis is exactly that…the vast majority of Westerners already have all which they need for basic survival and even ‘the good life,’ and now they ask themselves: “Why do I need more? Why keep going in to debt and working my life away in pointless and terrible jobs for all of this stuff I really don’t need” And they do not need more than they already have in a material sense; to suggest so is ABSURD.The best business opportunites now will be in the countries in the world where most of the people still live in terrible poverty and desperately need basic amenities like housing, infrastructure, transportation, etc. — places like Africa, much of Asia, South America, and so on.People in The West do not need these all of these unnecessary material things any longer because most people already have them and are perfectly content and happy with what they have, and so they don’t need or want anything else. The West has reached a growth plateau, and unless each woman in these countries starts having AT LEAST 4-5 kids it will remain on this plateau indefinitely, and this is not a bad thing — however, many economic big-shots and governmental authorities want to flood Western countries with tens of millions of immigrants to falsely keep up this rapid growth: this is a VERY bad thing. We should be working to improve, develop, and modernize the countries of poor immigrants so that they don’t want or have to immigrate to Western countries.The tallest trees in the world (redwoods) can only grow so much before gravity starts to prevent water from being pumped up to the upper reaches – it then reaches its maximum height (its growth plateaus), and lives out the rest of its life. This is what has happened in The West – and we should not be scared or unnerved about this…we should actually be happy that we have reached such a pinnacle of achievement in the material/worldly realm and seek to grow in other ways, being happy with what we already have.In short, to continue to live by the “unlimited growth” hyperconsumerist philosophy of the malignant cancer cell will eventually lead to the slow death of our planet upon which we all depend for survival, which is bad for everyone.So sit back, relax, and take the time to revel in the soaring heights which Western civilization has achieved in terms of material things…it doesn’t get much better than this, and to tell you the truth it should not!

“I’d rather see higher wages overall so that folks could actually afford what they need and not have to go into debt for it.”Actually, I think the price of the vast majority of goods and services in America needs to drop by AT LEAST 25-33% for the economy to get back in sync with reality.Everything is just too unnecessarily expensive, and some things are quite obviously already hyperinflated and outrageously/stupidly priced like houses, food, cars, a college education, dentistry and medical care, lawyers, clothing, and so on – there is a HUGE oversupply of these things in the USA yet they still overcharge for them…overcharging on goods and services in America is rampant because there is a massive oversupply in so many sectors for so many things and since each business doesn’t have enough customers so it must overcharge the customers it does have more and more and more in order to remain halfway profitable.It’s the myth of scarcity reigns supreme in modern America and its utterly ridiculous!If anything, many of America’s so called “professionals” (bankers, Wall Street workers, and other so called “financial professionals”), lawyers, doctors, dentists, college professors, and others need to take a pay cut or accept a pay freeze while the wages of other workers catch up with them. It’ll take some time, but it needs to happen.

Sidcup,I am neither stupid or an idealogue. You however are obviously absurdly naive if you think that the Democrats (US), Labour Party (UK) or Labour Party (Australia) do not have their policies and core beliefs set firmly from within their rich socialist/leftist histories. Sure they are dressed up and camouflaged, but still clearly are socialist.Wake up to yourself Sidcup. Politics are the battlefield for “solutions” to this crisis.NR is very much indeed proposing Socialist based solutions to this crisis and unlike you, I’ll call it as I see it.

That was an awesome post! I only wish is wasn’t true. I just finished reading a book called “The Creature From Jekyll Island” which says about the same thing. This whole crisis is being orchestrated by TPTB for one goal….To scare the sheeple into accepting a one world government and currency. It’ll probably take another 10-20 years to get there, but make no mistake, that’s the goal.

Growth for the sake of growth is the philosophy of a cancer cell-Edward Abbey

GSMThe American right now calls anything to the left of itself socialism, just like the old communists used to call anything to their right fascism. On both sides its empty propaganda designed to disguise the true nature of reality. It is my belief that your definition/understanding of socialism is highly inaccurate and this unfortunately devalues the importance of the points you make above.These points I think are more important to pursue as a subject of discussion on the blog.(and please, my title is LORD Sidcup).

How about paying workers so we don’t have to borrow what we can’t afford to borrow.

Uh… why doesn’t the over supply of lawyers and bankers bring their rates down? I thought in a “free market” economy supply and demand self adjusted prices through competition?

I am happy to discuss the political dimensions to the various so called “solutions” being tabled- by NR and others.I think it is naive in extreme to believe that whatever “remedial” actions are taken do not have a solid political dynamic embedded within them. In fact, it will be the superior political “weight” for such solutions that will determine whether they are acted on – or not. What is right or wrong is of secondary consideration at present. Politics and greed determines all. Being a pragmatist, I don’t see any other way forward for the immediate future.It will not be until circumstances are obviously very dire indeeed, with no clear prospect of a turnaround, that politics will fully be sidelined from the renewal process.

“So, says Hazlitt, when the government comes to repay for the public works, it must necessarily tax more heavily than it spends.”This sounds like classic republican shallow bologni. Public works can be a form of forced income redistribution which is very healthy for an economy to have wealth spread more evenly when it’s obviously being grossly horded. The above statement would only be true if the taxes were taxed to all people evenly.

It immediately lowers the interest that banks et al. pay on your savings. Given that it does not lower the interest they charge to lend money, it means higher profits for them. What’s wrong with that? As long as we the sheeple go along with it, and leave our hard earned money in the financial system, why should they not keep on raping us?

Great post and excellent thoughts!I’ve often thought about this in smaller terms: at the company level. Why is it so great that a company grows rapidly — or at all? If a company has developed a stable market, is making a profit, and has happy employees – isn’t that enough?It seems that the only reason for the “growth is good” mantra has been to keep fattening up the stock market beast.

Never trust the MSM to give you the whole story. Propaganda takes many forms and in the US, the MSM is largely an arm of the government – they tell you what they want you to know.News more and more takes the form of “infotainment” and is directed at the lowest common denominator. They also want you to pay attention to their TV shows instead of what is happening around you.Try this: go out on a street and ask any 10 people to name their US representative and their state’s 2 senators. Then, ask the same people who won on American Idol last season.If you are like most of us here, your jaw will drop when you realize how many people are ignorant. It’s what our society has been moving towards for decades. We will all pay the price for our diversions.Keep this in mind: the people who control the information can bend it any way they want. See CNBC and their “analysts” for a good example. These people have been calling for a short slow down and a quick return to normal, but reality is nowhere near that level of optimism. If I, as a non-economist and non-economic person at all, could have seen something like this coming, how did it get by them? Did it really, or are they simply telling you what they want you to hear in hopes you and others don’t get too depressed and stop spending.Suspect that those with authority want to keep it. It is human nature.

One simple question. Why is that the most of you see an extra $2T deficit as a catastrophe? The cost of Bush tax cuts is $400B/year. Can’t we just go back to the pre-2000 tax code, and get the 2 trillions in 5 years? Of course now the economy is not doing as well as in 2000, but does anyone know what is the tax revenue loss for a 1% loss in GDP?

This implies a technological cut off point where energy is ultimately in limited amounts. This is of course foolish at present we are only able to utilize a tiny fraction of the available sunlight energy and I could go on and on. This argument or hope comes from a save the planet mentality that hopes and prays the exhaustion of resources causes a self-sustainable paradigm shift. If this happens it will only be temporary ultimately the planet must be saved through raised awarenes and elevated consciousness. Hoping for technology to reach a cut off point is fanciful.

Excellent point, Guest. Please consider adopting a nome de plume, and weighing in frequently.

ABSOLUTELY AGREE: one of the fundamental building blocks of equality and fairness is TRANSPARENCY!

Andrew Jackson Speech – Farewell AddressMarch 4, 1837

… Honest and even enlightened men are sometimes misled by the specious and plausible statements of the designing. But experience has now proved the mischiefs and dangers of a paper currency, and it rests with you to determine whether the proper remedy shall be applied.

The paper system being founded on public confidence and having of itself no intrinsic value, it is liable to great and sudden fluctuations, thereby rendering property insecure and the wages of labor unsteady and uncertain. The corporations which create the paper money can not be relied upon to keep the circulating medium uniform in amount. In times of prosperity, when confidence is high, they are tempted by the prospect of gain or by the influence of those who hope to profit by it to extend their issues of paper beyond the bounds of discretion and the reasonable demands of business; and when these issues have been pushed on from day to day, until public confidence is at length shaken, then a reaction takes place, and they immediately withdraw the credits they have given, suddenly curtail their issues, and produce an unexpected and ruinous contraction of the circulating medium, which is felt by the whole community. The banks by this means save themselves, and the mischievous consequences of their imprudence or cupidity are visited upon the public.

But when the charter for the Bank of the United States was obtained from Congress it perfected the schemes of the paper system and gave to its advocates the position they have struggled to obtain from the commencement of the Federal Government to the present hour. The immense capital and peculiar privileges bestowed upon it enabled it to exercise despotic sway over the other banks in every part of the country. From its superior strength it could seriously injure, if not destroy, the business of any one of them which might incur its resentment; and it openly claimed for itself the power of regulating the currency throughout the United States. In other words, it asserted (and it undoubtedly possessed) the power to make money plenty or scarce at its pleasure, at any time and in any quarter of the Union, by controlling the issues of other banks and permitting an expansion or compelling a general contraction of the circulating medium, according to its own will. The other banking institutions were sensible of its strength, and they soon generally became its obedient instruments…

…No nation but the freemen of the United States could have come out victorious from such a contest; yet, if you had not conquered, the Government would have passed from the hands of the many to the hands of the few, and this organized money power from its secret conclave would have dictated the choice of your highest officers and compelled you to make peace or war, as best suited their own wishes. The forms of your Government might for a time have remained, but its living spirit would have departed from it.

Oh, I don’t know. It only took the likes of Greenspan, Bernanke, Barney Frank and Goldman Sachs to create the mess.

ECRI weekly leading index plunges to all time new low, worse than prior low set in Dec 1974!!! This ought goose stocks a few hundred points higher! LOLOLOL

“power reverse dual currency notes” ouch!so the world’s humans are getting to stage three -anger …i don’t see acceptance yet Dr. Roubini

…My humble efforts have not been spared during my administration of the Government to restore the constitutional currency of gold and silver, and something, I trust, has been done toward the accomplishment of this most desirable object; but enough yet remains to require all your energy and perseverance. The power, however, is in your hands, and the remedy must and will be applied if you determine upon it…

Andrew Jackson Speech – Farewell AddressMarch 4, 1837

Spot on, GSM, especially including your last point.

Obama Camp: Expectations DangerSenior campaign advisers disclose urgency to lower unrealistic hopes of change in face of economic crisisNice, in other words, it doesn’t matter who is elected, we are screwed either way!

Is that you Raoul Pal???

LOLOL, the magic of market painting! This miraculous 10% rally just in time for month-end saved what would have been the 2nd worst(September 1931) Dow monthly drop on record, we will end up in about 11th place now. More obfuscation to suck in the sheeple! “See, the markets are telling us things aren’t as bad as they were in the 1930′s”

KAREN HOWLETT AND JENNIFER LEWINGTONGlobe and Mail UpdateOctober 31, 2008 at 9:53 AM EDTThe Ontario government will relieve the province’s cities of responsibility for welfare costs beginning in 2010 under a landmark agreement that will see them receive benefits totalling $1.5-billion a year when fully implemented by 2018.The McGuinty government will assume all social assistance benefits and security costs from cities. But the 10 years for move to reach its full effect is much longer than cities had initially hoped.Under the consensus agreement, municipalities’ costs for welfare benefits will be reduced by more than $400-million a year by 2018. The cost of court security will also be assumed by the province, beginning in 2012.”This is a milestone in our partnership with municipal governments and all Ontarians will benefit from the spirit of collaboration of the review,” Municipal Affairs Minister Jim Watson said Friday.He said that the agreement will help reduce cost pressures on municipalities and property taxpayers but that the province has not been able to move as quickly as initially hoped because of the weakening economy.Carried out in co-operation with the city of Toronto and the Association of Municipalities of Ontario (AMO), the review was due last February, then delayed to June and, most recently, to the end of this month.The review was supposed to look at the delivery and funding of housing, health and social services, use of user fees and other municipal financing tools, infrastructure funding and the Ontario Municipal Partnership Fund, the vehicle for transfer payments to local governments.AMO estimates that more than $3-billion of $18-million collected in municipal taxes pays for provincial social services.Other provinces foot the entire bill for welfare, but municipal taxpayers in Ontario pay 50 per cent of the cost of welfare administration and 20 per cent of benefits.This year, for example, Toronto contributed $111.1-million toward administration and $155.7-million for the city’s share of benefits.Of particular concern to municipalities is the capping of provincial payments, effectively putting more of the load on local taxpayers. The cumulative impact on Toronto over the past decade has been $127-million.Meanwhile, current rules require municipalities to pay for the cost of security (such as police) when the province builds new courthouses. The cost to Toronto, for example, is $40-million a year.The McGuinty government has already taken steps to ease financial pressures on local governments, including a sharing a portion of provincial gas tax revenues.As well, the province has assumed the cost of public health, land ambulance and, by 2011, the municipal share of the Ontario Disability Support Program and Ontario Drug Benefits for social-assistance recipients.In a pattern expected for the deal to come, the province back-loaded its commitment on the disability and drug benefit programs, so municipalities will not feel the biggest relief of the $935-million upload until the fourth and final year of implementation.Last August, Mr. McGuinty also pledged $1.1-billion for municipal infrastructure, with $238-million earmarked for Toronto, as a stimulus in uncertain economic times.Toronto Mayor David Miller praised the agreement, one that he said will no longer force cities to divert millions of dollars collected with property taxes to provincial services from core municipal services.”Today, together we have righted this lingering wrong,” he said at a news conference.

The main reason given is that it is an efficient way for a company to grow and reward its investors with an increasing stock price yet how many investors truly benefit relative to the top shareholders (owners and investment bankers who do the deals). Many opaque mechanisms are used to dilute the actual shares the public buys to put them at a huge disadvantage. We really don’t need the type of unfair stock market we have as well as multinational corporations who look out only for their best interest: profit. What is so terrible about having many small businesses all competing on an equal level (McDonald’s buying power vs the local diner): it would lead to a de-concentrated and equitable distribution of wealth, a more stable system and a more friendly business community; of course then we might not have as many billionaires our there!

Socialist solutions to financial crises always involve huge deficit spending…”By GSM on 2008-10-31 05:30:39One thing that has precipitated this crisis is the huge deficit spending of the private sector, that is, individual and corporate debt.The private sector has exhausted its capacity to absorb any more debt for the moment.Why are we worried about state deficit spending, when the state holds a large proportion of the collateral, including the right to levy taxes of all shapes and sizes.If it is OK for individuals to be burdened with debt well beyond their own collateral value, why get excited about the state also holding debt?The private debt was underpinned by rising asset and commodity values.Incomes, or rather median incomes, faltered, they were swamped by these same asset and commodity values.(Median income has also been plundered by the ever increasing share of income going to capital and its accompanying exorbitant fees.Unless the median incomes can get a share of the capital and its income, the median income sector will continue to contract as will its ability to absorb debt.)The events needed to contract the economy have already occurred.There is now an urgent need to minimize the contraction, so until asset values can rise “naturally” (by income induced inflation), I can’t see that we have much choice but to encumber some of the state’s collateral.Call it socialism if you like, but offhand I can’t think of a better solution to un-seize the asset value dependent credit markets.Whatever we do short term, I think we have to address the problems of the ever increasing proportion of capital in the production process, (some industries spend tens of millions/per job created) and the deflationary effect of automation and productivity.I also think that we need to treat markets as a common asset that needs to be managed sensibly.No regulation will ever be anything more than a hurdle to jump (and maybe a handy barrier to entry) if we continue to view the market as an uncivilized free for all.We also have major international arbitraging issues to consider and the current volatile currency fluctuations are paralysing international trade.Much of the gaming of the markets , both local and international might also be reduced if we can tackle these issues.It is not a good time to be shackled by the largely false dichotomy of the left/right ideological divide.To my mind the Gospels sometimes offer sounder economic advice than the gurus of the left or the right, and I say that after having spent a deal of time looking into the matter.

@ GuestYes, transparency is needed. It’s needed NOW! You say true transparency would scare the daylights out of us … we need to stabilize first … then bring in total transparency. I find it curious that you are afraid to see what’s there. Secondly, if things get stabilized do you think anyone will then press for transparency at that time?What good does it do to investigate the accident scene 5-10 years after the accident?We have a special prosecutor appointed and impeachment whispers for sex in the Oval Office, but we shower money on businessmen who raped us and continue to find new ways to ream us!

This is worth 500 Dow points!More U.S. Homeowners Have Mortgage Higher Than House Is Worth2008-10-31 04:01:21.0 GMTBy Dan LevyOct. 31 (Bloomberg) — Almost 20 percent of U.S. mortgageborrowers owed more on their loans in the third quarter thantheir house was worth as foreclosures depressed prices and theeconomy weakened, according to First American CoreLogic.More than 7.5 million properties already have negativeequity and another 2.1 million will follow should home pricesdecline another 5 percent, Santa Ana, California-based FirstAmerican, a seller of economic and real estate data, said in areport today. Six states account for almost 60 percent of homeswith negative equity, led by Nevada and Michigan.“As long as job losses continue and people face resets ontheir mortgages, the housing market will be under severedistress,” Sam Khater, a senior economist at First American inTysons Corner, Virginia, said in an interview. “We’ve createdan entire class of homeowner that is very sensitive to pricechanges.”Home prices fell in August in all 20 metropolitan areasmeasured by the S&P/Case-Shiller home-price index, which dropped16.6 percent from a year earlier and has fallen every monthsince January 2007. U.S. foreclosure filings rose to a record inthe third quarter, and will probably increase as the economyworsens and the availability of financing shrinks, RealtyTracInc., a seller of default data, reported on Oct. 22.The number of houses with loans higher than the property’svalue may increase to almost 25 percent should prices keepfalling, First American said.

isnt this the definition of “recapitalization”?

@ SWKI think it’s a little worse than 5.5. The debt you refer to form 1946 was only operational debt. No inclusion of any social programs. If you include current obligations of social programs the internal IOUs, then the public debt is something like 5-6 times GDP. This would put public and private debt based on your other numbers @ 10-12 times GDP!

This is where the market fell apart just before the close a couple days ago. SSO $32.3 failed 3 times and we tanked, if we break through that today, Dow will try 10,000…

so what you are saying is that the govt is more solvent than the private sector, and the private sector f’ed up. so the government is gonna attempt to fix a very large problem, a problem that it is not sure if it can fix.the government has started off on the wrong foot by not using carrots and sticks (third world government relational strategy) with wall street and corporate america – that is the only answer.we may even need to send in some commandoes and laser guided precesion bombs to goldman and setup a puppet ceo that really does the bidding of the u.s. gov’t and it’s citizens.lets get this going! – coups on corporate “states” is the answer. and they are states – lets treat them like rougue states and bring down the hammer!

Yes, and a lot of that public debt is currently being transferred to the US government.I think the national debt will make a new all time high (as a % of GDP) before this recession is over. Tax revenues will be down and the budget deficit will worsen over the next couple years.I really don’t know why they even bother with a budget anymore. It is meaningless. A few years ago I thought that all the supplemental appropriations W was asking for to fund the war might actually force them to scale it back because of the big impact on the deficit. What a laugh! I see now that the budgets mean nothing. There is nothing too big for us. They spend whatever they want / need to spend. Why did we / they ever worry about the coming SS shortfall / crisis? We can see now that it shouldn’t really matter – just borrow and spend!But the world still flocks to the USD and US Treasuries in these troubled times, so no worries. And if all else fails, they can simply monetize some of the debt and keep paying the interest.I was surprised (I used to think he was a rational guy!) to hear Mark Faber say a few days ago on Bloomberg that the USA would go bankrupt. He was certain of it. I don’t remember what the timeframe was, but I think he was saying it would happen as a result of the current financial / economic crisis, so that should mean probably within five years at the latest. But others have predicted dire consequences before. Remember Ross Perot in the late ‘80s saying the debt would be a catastrophe? Well that was 20 years ago and the deficit has continued to soar with NO consequences! Interest rates are lower now than they were then!I do agree in principle that at some point it must matter, but, surprisingly, from what I can tell we really are no where near that point now, so even the deficits likely to occur in the next couple years are not going to bring significant negative consequences.

god know.

one way to look at that falling apart similar to the 200 point dramatic scary 200 pt sell off the other day was scaring out longs and sucking in the shorts before even further lift off… this is a casino you have to figure out where the bets are placed and what they are trying to do… this week has been rally on bad numbers…

Capone you are stating the obvious even a novice trader understands. Of course we are trying to climb a wall of worry. Stupid money are covering their shorts and buying into this becasue they are so afraid they are gonna miss something. This culture and mentality of “buy the dips” that has permeated for so long will not die easy. We have heard six different times starting in late September that the bottom was in (just listen to CNBC). You need to view this as simply a counter trend rally in a secular bear market that started in 2000.

I you are not a professional trader then that is the best place for you to be, in cash or treasury bills. Of course you will never know the exact bottom of the economy but there will be tells, just like there are many macro tells now that people are ignoring (just look at the Street’s earnings estimates for 2009!!!!!!)

yes it is all obvious… so simple silly me

He who has ears to hear, let him hear!In Jackson’s veto message rescinding the central bank’s federal charter, he made these points in the need to abolish the Second Bank of the United States:· It concentrated the nation’s financial strength in a single institution.· It exposed the government to control by foreign interests.· It served mainly to make the rich richer.· It exercised too much control over members of Congress.· It favored northeastern states over southern and western states.A wise man, Andrew Jackson. Alas, after Jackson’s titanic struggle and success in destroying the Bank by vetoing its 1832 re-charter and withdrawing U.S. funds in 1833, the creature “moved into it’s final lair in 1913 and has snorted and thrashed about the landscape ever since.“If we wish to know if it is a creature of service or a beast of prey, we merely have to look at what it has done.” G. E. GriffinFor a tree shall be known by the fruit it bears.

Don’t be a moron….

The point being … a lot more of these people could just choose to mail back their keys and just walk. It might very well pay them to do this.PeteCA

WE FINISH UP 535 POINTS TODAY!!!!

i wonder how the markets will react to the election? Will it make a difference who wins?Just wondering

yes.

why you just like to quote bad news.

Nah. According to the VIX, folks are only “moderately terrified” now – down from “Aaaarrrggghhh!!” earlier this month.In view of this stability, I’d say that the Dow should close within +/- 400 points of the opening level.

BOOMMMMMMMM!!!!!!

THIS SUCKAS GONNA BLOW!!!!!

You have the S&P overvalued by 10.72%?? Not 10.71% or 10.73%?Sorry – couldn’t resist!

$34.05 on the SSO is 3 std devs…

“Cough.. cough…”Sorry, I think I just heard the stock market engine sputter…. I think she might be coming down for a hard landing!

LOLOL the SSO is up 33% in just 5 days!! You gotta love bear market rally’s!!!!!

I think the markets already expect Obama to win, so most of it should be priced in already. But this is only my personal opinion.

Study any economic collapse in history. (Argentina, Mexico, Germany, Rome) Big power/involvement to no power/involvement made the fall softer. We have been charging/living beyond our means and not saving. The general citizenry is not prepared if the collapse is permanent.More Orlov:One important element of collapse-preparedness is making sure that you don’t need a functioning economy to keep a roof over your head. In the Soviet Union, all housing belonged to the government, which made it available directly to the people. Since all housing was also built by the government, it was only built in places that the government could service using public transportation. After the collapse, almost everyone managed to keep their place.In the United States, very few people own their place of residence free and clear, and even they need an income to pay real estate taxes. People without an income face homelessness. When the economy collapses, very few people will continue to have an income, so homelessness will become rampant. Add to that the car-dependent nature of most suburbs, and what you will get is mass migrations of homeless people toward city centers.Soviet public transportation was more or less all there was, but there was plenty of it. There were also a few private cars, but so few that gasoline rationing and shortages were mostly inconsequential. All of this public infrastructure was designed to be almost infinitely maintainable, and continued to run even as the rest of the economy collapsed.The population of the United States is almost entirely car-dependent, and relies on markets that control oil import, refining, and distribution. They also rely on continuous public investment in road construction and repair. The cars themselves require a steady stream of imported parts, and are not designed to last very long. When these intricately interconnected systems stop functioning, much of the population will find itself stranded.Economic collapse affects public sector employment almost as much as private sector employment, eventually. Because government bureaucracies tend to be slow to act, they collapse more slowly. Also, because state-owned enterprises tend to be inefficient, and stockpile inventory, there is plenty of it left over, for the employees to take home, and use in barter. Most Soviet employment was in the public sector, and this gave people some time to think of what to do next.Private enterprises tend to be much more efficient at many things. Such laying off their people, shutting their doors, and liquidating their assets. Since most employment in the United States is in the private sector, we should expect the transition to permanent unemployment to be quite abrupt for most people.When confronting hardship, people usually fall back on their families for support. The Soviet Union experienced chronic housing shortages, which often resulted in three generations living together under one roof. This didn’t make them happy, but at least they were used to each other. The usual expectation was that they would stick it out together, come what may.In the United States, families tend to be atomized, spread out over several states. They sometimes have trouble tolerating each other when they come together for Thanksgiving, or Christmas, even during the best of times. They might find it difficult to get along, in bad times. There is already too much loneliness in this country, and I doubt that economic collapse will cure it.To keep evil at bay, Americans require money. In an economic collapse, there is usually hyperinflation, which wipes out savings. There is also rampant unemployment, which wipes out incomes. The result is a population that is largely penniless.In the Soviet Union, very little could be obtained for money. It was treated as tokens rather than as wealth, and was shared among friends. Many things – housing and transportation among them – were either free or almost free.We have squandered resources arguing: right and left, Democrat, Republican. The propaganda is so subtle. Grammar school is geared to create little consumers. They grow into big consumers. Mussolini said Fascism is “Government for the corporations by the corporations.” These corporations own the “free” press and tell us what to fear. Meanwhile we’re all so busy fighting each other that we are not watching what these ‘representatives’ are doing to the ideal we thought we espoused.We may now have an opportunity to save that idea. It requires intelligent, coordinated effort from a united and informed citizenry.This site is useful in the many varying ideas and viewpoints presented.

I’m imagining how great it must be to be making money in the market right now…….. just like I’m sure I’ll be imagining how great food tastes a couple years from now when I’m sleeping in a gutter….

Thank you Pete. I appreciate your insight. Your comments have been invaluable to me through out the last year.It is all lies. The DOW is not a reflection of the real economy. We have been in a recession since at least March. It’s a comedy that some media is still asking ‘if’ we are in one. Will we stave off a depression?I have : cut expenses, laid people off, continue to manage utilities and inventories. Customer counts are dropping. Maybe the US Government will think of bailing me out once I’m bankrupt. Oh that’s right, I’m not an Ivy league elitist. My twenty year old small business doesn’t matter! Well except to my veteran employees, loyal customers, and three kids.Keep you passport ready!

I agree Petes commnets are some of the most insighful and worth reading on this baord

Hey P1AQL…Ohhh I agree that the bloggers and indy’s did their job…What I’m mostly referring to is the mainstream media.I’d love to see one of these “experts” that’s still employed as an analyst say:“WOW, I can’t believe I didn’t see the severity of how big this crisis really is/was. I hope you don’t rely on “experts” like myself for advice and if you do, I apologize for not warning you (the pubic) as I missed this “once in a lifetime” financial tidal wave. …BIG TIME!!! I thank god I’m still employed as an “expert” and hope I can give some guidance in the future that is at least 1% better then the bullshit I fed you in the past.…now for my new advice. Blah blah blah blah blah.” (OK… where’s my paycheck)You see… the media loves to hold people accountable for their mistakes. They rake people over the coals whenever it’s going to draw a crowd. Well, when do they hold themselves accountable?I’d love to see the Wall St Journal take out a 1 page add in its own paper and say:Dear Readers,We humbly apologize for not focusing more attention on the warning signs of the crisis we are now in. We did have quite a few article about the possibilities/dangers that existed, but we buried the on page 3. For all of you that have lost half of your retirement funds value, because you were looking to us for guidance we can only say sorry.Going forward, we will continue to look at money making possibilities (sinse that’s what sells papers) but we will also put a little more focus on risk analysis since “saving money” over “losing money” can sometimes be the best investment!Just some more ranting…(I don’t know why I get so mad… I really haven’t lost a cent. I guess I just feel bad for those that did. …and so many that lost, just don’t understand finance and depend so much on the media for that education.)OK, I’m done.Thanks, Miss America.p.s. Don’t forget to visit my blog at:http://www.rgemonitor.com/globalmacro-monitor/254214/trick_or_treat

LOLOL AHAHAHAA! WE are set up SWEET! The buying ferries start unloading cash in 8 minutes…ready to watch the Dow run 300 points in the last hour??

RIGHT ON TIME!!!!!

It’s amazing to watch this airplane climb without any gas!What’s this?? On the ground I see a couple folks desperately blowing into the air to keep this baby up! It’s hard to make out the faces but.. wait! There’s Ben … and there’s Hank! Son of a Gun! They look like they’re about ready to pass out!

Number for what……980 was resistance before

Hurry….buy! buy! buy! you are going to miss the opportunity of a lifetime…..

CRISIS OVER BABY! OBAMA GONNA SAVE THE WORLD!!!

A question for those of you with crystal balls on stock market short term movements:Are we gonna get an election week rally?

So under the new “redistribution” paradigm, does that mean that kids who actully go out and do the work of trick-or-treating, have to give up half their candy to the government so it can be “redistributed” to those who were to lazy or stupid to go out and do it themselves?

yes

Yippee!! A Zepplin!Sorry… that joke would be in better context if this were Christmas and not Halloween..

Can Somebody,(PeteCA ?) gimme a map of what has happened and what is coming up ? The CDS blow then ? The dollar crashes ? The USA defult ? Thanks !

There, now becuse of the warm fuzzy ferries this week, we can all have a nice weekend and ignor the horendous news cause stocks went up 15% just this week, everything must be fixed, eh?

4:06 p.m.[SPX] S&P 500 tallies 10.5% weekly gain4:05 p.m.[INDU] Dow Jones Industrial Average up 11.3% for the week

They could bring back debtors prisons, it would be good if bankers had the ability to have a large segment of the population thrown into ‘gaols’ if the fancy took them.

good one!I saw them flying away in a large chopper afterwards

Stock-Fund Investors Pull Record $70.7 Billion, TrimTabs SaysBy Sree Vidya BhaktavatsalamOct. 31 (Bloomberg) — Investors withdrew a record $70.7 billion from U.S. stock mutual funds in October, according to data compiled by TrimTabs Investment Research, raising questions about how long they will stay out of the market.Hurry up get back in everybody – the market is BACK !

The key phrase in here is, of course, “eternal vigilance by the people.” Sorely lacking, IMO, for years now. Witness our loss of civil liberties. Excellent postings, jomos, and I thank you.

We have stepped into the unknown, into a new paradigm and there is no going back!There are those who say, if it’s not broken, why fix it!Well, the current system is irreparably broken and if the status quo remains, then the global society will collapse.In looking for some foresight into possible futures, we first need to get some background on how we got here and where here is?This event had its origins in the population explosion (commonly referred to as the Baby boomer generation), which started as the Great Depression was ending.With a few relatively minor interruptions, the period 1945 to 2005 was the greatest Global economic BOOM in history.In particular, the period 1995-2005 experienced massive growth, driven by the Peak earning and spending capacity of US & other Baby Boomer consumers.In addition, around the same time, technology drove massive gains in productivity, leverage multiplied and interest rates in the US remained artificially low, for far too long, following the events of 9/11.This was a perfect storm, for making money.Inevitably, GREED followed, sub-prime (NINJA) mortgages flowed, on the assumption that property values would continue to escalate, the party would go on forever and leverage went into orbit.However, around 2005, the Baby Boomer BOOM broke and the Supply & Demand basics went into reverse, as did US & Global housing prices.Also, around 2005, Murphy’s Law also came to play, with Oil production Peaking and with demand exploding internationally, Oil prices burnt thru the roof.So, we now see Supply & Demand constraints, the de-leveraging of markets, a Global population set to age, at first, then decrease over time and looming problems relevant to Climate Change and Food production.And, with Debt levels already at historical highs and past fixes, either not able to be used or possibly set to cause more harm, than help, we really are between a Rock & a Hard place!Now, expectations build of a slowing economic future, as reflected in stock markets and oil prices, next comes the reality.Now, the perfect storm is reappearing, this time it is a Cat 5 in financial demolition!Where do we go from here?The truth is, I do not have any magic wand solutions and nor does anyone else.The truth is, there is no pot of gold at the end of the Kansas rainbow.The truth is, things are going to be tough, for quite some time.Had corrective decisions been made earlier, then it may have been possible to reduce some of the worst side effects, regrettably, that did not happen.Regrettably, if we opt for a better now, then future generations will pay for our mistakes and indulgence.That reasoning is not acceptable and can not succeed!As we look to the future, the effects of the Baby Boomer Bust increase in severity. Health and Social Security costs increase dramatically and Demand continues to fall, first as Boomer retirement numbers increase and then as Boomers leave us in increasing numbers.As we look to the future, we need to look thru different eyes, thru different thought processes.The days of Smoke & Mirrors, of Shock & Awe, of the Desire to Acquire & Retain Power, of Self interest, at the expense of Societal interest, must end.There is an overriding need for a change in human psychology, in order for humanity to have a future.Can we make those changes, the answer is YES!Will the required changes be made?The answers will come on these boards and others, in other forums, in politics, in business and the answers will need to come quickly.Good luck & watch the Debt!

Taxpayer,I hear what you say. But, please don’t miss my point. Think of the bailouts at the present, as monumental as they are, still PORK. There still is entrenched a fundamental belief that “if we spend enough money, we can fix it”. Things wont change until that is disavowed. My premise is twofold;1) This time may indeed be different. That money being spent is resourced from monetized debt. That was the road Wiemar went when trying to make war reparations. At some point, enough creditors may say something like ” this paper is not enough collateral”. An epic currency crisis ensues.2)Spending money bailing out insolvent banking institutions is counterproductive to long term financial well being. Find a way to prop them up with absolute MINIMUM funding. If necessary nationalize most of it but conserve taxpayer treasure for the REAL and PRODUCTIVE expenditure. Take that money, and more even, and invest it into the US’s decrepit infrastructure, energy self sufficiency, re-engineering the economy job wise, massive education and health system overhaul.MAKE THE EXPENDITURE PRODUCTIVE!!Mind you, this would not guarantee success. But most importantly the US would be tooling itself up for what will be a considerable battle defeating this financial debacle.

If the government covers half of mortgage companies’ losses incurred in rewriting mortgages, as is being discussed, that could easily cost $40 billion to $500 billion.That’s a tremendous price to pay to reward the reckless and, indirectly, penalize the prudent. The benefit is obvious. Bailing out millions of individual property owners saves them much disruption and, ideally, serves to stabilize the housing market.But consider the lesson it imparts. City by city, neighborhood by neighborhood, people who live beneath their means and manage money carefully will see more careless neighbors supported by federal decree. Those who are current on mortgage payments, but still squeezed, may be tempted to let two or three payments slide, so they can negotiate money-saving terms on their own mortgages.We are becoming a nation of people who feel it is not only okay but justified to cheat, lie, and swindle each other and the rest of the population. Personal responsibility is discouraged by the govenment. White collar crimes are rarely prosecuted because FBI is so stretched. Our nation is eating ourself from within just to keep a facade of prosperity. Hope is being replaced by anger and desperation. Welcome to the new dawn.

You’re not allowed congratulate your own posts for being good. That’s cheating.

Fractional reserve banking is pretty much an all out evil scam by bankers and gov. that bids up the price of everything, steals productivity and enslaves the worker and then when morality gets brought up it’s always enforced on the little guy/the home owner. You can keep your form of morality I say let the home owners steal back what’s rightfully theirs! It’s our turn to hold the bankers/gov. hostage!

In our fiat currency system, money is loaned into existance. But, that money has to be paid back with interest, so debts have to grow so money will be created so interestcan be paid. As soon as credit stops expanding, there isnt enough money to pay back the debts with interest. Some people or corporations will have to go bankrupt. The music stops playing and everyone has to grab a seat. If defalation also occurs with the credit freeze, its like someone took away some of the chairs when the music stops.By backing corporations, banks, and so on, the Fed as also ensured that there will not be enough money for the populace to pay back our debts. In effect, they have reserved chairs for the corporations and banks and insurance companies, and the people have to fight over the remaining chairs.

There is a deep growing resentment over the bailout and FED injections into the banking system. If enough people end up without chairs and look up to see bankers sitting in comftorable recliners I suspect there will be some form of political backlash towards the federal reserve banking system. You hear about fake anthrax letters to banks, I go into a lot of foreclosed homes and you wouldn’t believe the deliberate sabotage and disgruntled messages written on the walls, people are pretty angry.

@Guest on 2008-10-31 21:22:07Here I go again, “debating” someone hiding behind a “guest” login, sigh…Demonstrate to me where “waste” is occurring in nature.Spouting off everyday physics equations doesn’t impress me, sorry… While you’re at it I suggest that you pay attention to the Laws of Thermodynamics: just because you’re wanting to get energy out of that equation doesn’t mean that you’re going to come out ahead (and so far physics tells us that we cannot).

Excellent trending of S&P/Case-Shiller data on housing in US citieshttp://www.nytimes.com/interactive/2008/10/28/business/20080624_HOUSING_GRAPHIC.html

Ahh, that ‘free market’ Wall Street Kool-aid sure tastes good, eh?

Wow, PeteCA, tonight I will sleep like a baby (never mind Halloween) on that “positive advice” … I’m not sure whether you are referring to some of my “complaints” or others’ … but I only requested you refrain from posting bad news past 8pm (take example on Gloomy). More seriously, I always find your contributions the most objective, balanced and helpful they could be.You mean that Americans should expect another Halloween instead of Christmas???

MA:All the journalists out there are doing their job, some better, some worse, some are honest, some are corrupt, some more dependent on advertising, some less. What get’s published is not decided in conspiracy boards, but in daily chaos of content mass production. What gets positive feedback, will be tried again, what gets negative feedback, not. That’s all; it’s just a market, and as we know, markets can fail.Please remember the summer of ’07. You knew what would happen, the professor knew what would happen, I tried hard to learn it from you, and a lot of other journalists as well. I started to write about bursting bubbles and coming armageddon in july – but what happened: The dow climbed and climbed to reach an all-time-high in october. No armageddon around. No bursting bubbles. Only heavily burnt short sellers.What can you do in that situation if you’re a free lance journalist?1. You can shout “sucker’s rally”, as the professor did. No one will listen to you at that time (i.e. you can’t sell), perhaps someone will remember later2. You can murmur “it’s all about allocating the losses to the right losers”, like Rich H did, and will be seen as a follower of conspiracy theories, i.e. you can only sell to esoteric or far left (or right) media.3. You can try to find an editor for writing a book. My agent tried it last year: No chance, too early. And now, of course: No chance, too late.So what could I do? I wrote and wrote and wrote about it in my blog (that’s neither about macro nor micro, but about finding new German words), and I wrote and wrote and wrote about it in my column in the rather influential German newspaper Die Welt, that is labeled as satirical. So everyone can read, but no-one takes it serious. So today I can be proud of being the only one in Germany who predicted in 2007, that the Fed would rush to 1,0 in 2008. But no-one noticed it.You say: Don’t bash the politicians – they are what we made them to be.I say: Don’t bash the media – they are what we made them to be.

I wonder what will happen…How high is the CDSspread going to rise?Will the US end up like BSC?Scary thoughts…hero

On a broader perspective, this process of cyclical degeneration of a domestic financial market ( albeit, sub-prime, credit, cdo’s, cds’s…whatever the factor/mess..lol) can be considered a type of purification and consolidation of individual sectors within our economy in adaptation to a globalized market which has not been playing by the same rules ( social govt’s, dictatorship, oil dynasties, communistic tsars/ emperors, etc). The fact is value has been destroyed worldwide and now contraction must take place to balance the other side of the equation. So i feel this process was absolutely necessary , in order for our free market economy to be able to compete and expand. As the gov’t and market screens all of those that are fit to survive and grow, colossal powerhouses in terms of capital and resources will emerge throughout sectors of industry. With guidance and investment by G-7 private markets, expansion and globalization will accelerate in the decades ahead at an accelerated rate. Although the interim will be slow and monitored meticulously, free market and democracy will prevail through this global crisis.

One more point to add:The fact is value has been destroyed worldwide and now contraction must take place to balance the other side of the equation. Temporary capital infusion along with regulatory overhaul seems necessary to allow adequate stabilization and transparency of valuations. This infusion of taxpayer/ gov’t funding can be gradually reduced or withdrawn through refinancing and adjustment of market crediting rates as markets stabilize and become more transparent.Thank you.

The flat tax raises far less revenue than the current tax system. A realistic flat tax rate is not 10%, but 30%.Still in favor?