Cannot believe it! OK, I just came back from lunch and will now take a nap. Hope you forgive me for a brain-dead “first” post:-)BTW, make sure you read the New Yorker’s Benny article. It is an A++. Link in the previous page. It will scare you!If Benny knows so much about the depression how come he didn’t apply the learnings from the NY FED letting the Bank of United States fail in 1930 when deciding to let LEH go under? I posted th Bloomberg article in the previous thread. IMHO, another must read.Me also a Profesore, so I can tell you: please Don’t be lazy do your homwork, read!:-)

BrainTrusters: Check out the stuff that got put on the bonfire today. We are shifting into 2nd on the analysis process – several posters have done some outstanding work. Don’t forget to check out Hubb’s post well down-thread from initial group of BT materials.Link to Latest BrainTrust Work

Well, I’m back after a fight with the Windows Perfect Defender virus on my computer. This thing is a real nuisance, and standard anti-viral software don’t seem to touch it. But actually, the fix is quite easy once you know what to do.———–Anyway …I’m having a hard time seeing how investors – esp. foreign investors – can maintain any confidence in the US markets given what’s been going on lately.First, it seems unlikely that too many people will be buying too many cars from Detroit – given the shaky financial situation of these companies. So the bailout (however it is achieved) seems almost meaningless at this stage.Along the same lines, the Fed is expected to lower rates this week. But the effective Fed funds rate is already zero! Lowering the official rate accomplishes nothing.Finally, the recent Maddox hedge fund scandle is likely to upset a lot of investors and lower confidence in general. News reports indicate that the fund was achieving remarkable (hard-to-believe) returns for some time, before going under. What is going on? We’ve got important funds operating under questionable circumstances, big Wall Street banks still playing around with “Dark Pool” assets, and apparently no effective supervision.It’s almost a wonder that anyone still wants to put their money in US markets right now.PeteCA

The question of course is which country is in better shape than the US? The answer is none, they all suck at least as bad as the US. The dollar can only fall relative to other currencies. Which alternative currency can investors turn to? And don’t say gold. That market is currently not liquid enough to handle the global economy’s needs.

BUSH WANTS SLAVELORD FARMERS [FARM BILL] TO GET GET MORE FOREIGN SLAVES INTO AMERICAYet this type of globalist buffoon fought the Detroit American jobs tooth and nail.Hey you globalist pork Senators driving your foreign cars, when you replace our domestic R&D engineers in America with Japanese and South Korean ones; where’s our technical leadership to lead us out of this mess? How are Toyotas $10/hr factory rats going to buy our homes [start up the subprimes again that just destroyed our economy?]?Forget most of the MBAs and economists currently at the helm; they led us down this globalist path to destruction. We desparately need a Harry Truman type again.You’re right; the Globalist Senators pounded the stake into the domestic Christ child’s heart [figuratively].

Ouch! THe Mad-Off Ponzi is hitting where it hurts Da’ most.Geneva banks lost more than $4 billon to Madoff: reporthttp://www.reuters.com/article/ousiv/idUSLD12500520081213

on the lighter side of things this from BloombergBush Ducks Shoes Thrown in Iraqi Leader’s Office (Update1)Dec. 14 (Bloomberg) — President George W. Bush ducked two shoes thrown at him by an unidentified man during a press conference in the Iraqi prime minister’s office.Bush wasn’t hit by the shoes, one of which sailed over his head. The president shrugged and said “I’m OK” after the incident in Baghdad today. “All I can report is it is a size 10,” Bush said.In Arab culture, throwing shoes is a grave show of disrespect. The man shouted an Arabic phrase, which an Iraqi present translated as “this is a farewell kiss, dog.”http://www.bloomberg.com/apps/news?pid=20601087&sid=aTcVwP9G67fo&refer=home

Believe me … I’m seriously tempted. All the updates from MicroSoft failed to fix this virus problem. In the end, victory came because of the advice of the common people – all the users on the Internet who offer their own advice.PeteCA

Capitalism can just as easily be an idealogy in support of slavery as it can be for freedom, and balanced prosperity.Though this is too complicated for a lot of people to undestand.

The world changes!Better shape than the US?Lets define shape. Manufacturing capacity shape? Financial shape?The main US advantage now is Confidence in the dollar because other countries are associated with a greater default risk. This is what can sustain the dollar short/medium term.Also, some investor believe that FED can smartly control the money supply (expand and contract) DESPITE its latest huge interventions.But it is not impossible that some countries begin to spend their export revenues internally. See China.Lou Jiwei, the chairman and chief executive of the China Investment Corporation, said today at the Clinton Global Initiative conference.“China can only save herself.”Hsu:”This is why the $200 billion China had earmarked for overseas investments will now be plowed back into China Banks… and why the nation also plans to spend another $586 billion on new highways and railroads.”How about this?

Everyone seems to be repeating the same *BOGUS* number of $14 billion for the auto industry bailout.Keep in mind, this is the number that is supposed to get GM and Chrysler through the end of the year. Just long enough (if everything goes well) to get Obama into office so that they can then ask for their *REAL* bailout.People aren’t buying cars. That is a GOOD THING in the real world and real economy. The domestic auto industry *SHOULD* contract massively. Both to bring it in line with a real economy that isn’t spending itself insanely on debt (by buying brand new cars for every man woman and child every two years, but instead actually buying only what is needed), and for the environment (how about not producing the planet into oblivion for our own decadence?)Cars that have been manufactured over the past 5 years are sufficient, if maintained, to support the driving needs of the entire US population for the next 10 years without any new manufacturing. What is the REAL ECONOMY purpose of a $14 billion “LOAN” (which has zero chance of being repaid) to produce a product that is environmentally damaging and not necessary for any real purpose?And to say that the $14 billion is just 1/50 of what wall street got is bogus for two reasons. First, the amount will be 10-15x larger if the intent is actually to avoid bankruptcy for these companies over the next 2 years. Second, wall street should not have been bailed out, so saying that as long as we massively f****d up with one bailout, doesn’t mean we should continue our errors to compound our problems.Sorry, these companies need to BK and restructure. One or two should go away and clear the path for new, more efficient domestic auto producers to emerge. It’s free market, and believe it or not, it generally works.

It is amazing how the 25-30bn original request, which in itself was an interim measure has morphed to $14bn – meanwhile Cerberus is sitting on billions and to your point who’s buying cars? So the problem is compounding by the day such that 10x to 15x is probably closer to reality. Rest assured though, come January Americans, working or retired, will be backing up and paying with their tax dollars the health care, pensions and the job bank (pay for no work)of the employees of the big three just like they are paying for the bonuses, perks and seven figure salaries of the Wall Street banksters.

We do live in a country of morons. Please look in the mirror.In case you haven’t noticed what the world (you know, that thing outside the sacred borders of the United States) is experiencing at the moment is a massive overcapacity in manufacturing capability. The idea that we’re soon to pay 30% more for our cars made outside of the states is pure fiction. Do you understand what overcapacity means? Do you understand deflation? Do you understand people are not buying the amount of cars that can be made today even at their current cost and yet you’re suggesting we’re soon to pay 30% more because of “union bashers”?If this is the extent of the analysis you can bring to the table you might as well just save yourself the embarrassment.

For the past 10 or so articles I have been posting how ‘free markets/capitalism’ are ideologies that can very easily be used in support of an extremely unhealthy economy/slavery as much as it can be used to support a healthy economy and balanced prosperity. I’ve explained how a very profitable company can be extremely detrimental to an economy just as a unprofitable company can be very bennificial to an economy. What’s funny is not one person has dared take an effective argument to dispute these truths yet guys like Brian and countless more keep repeating their blind mantra of a “free market” system that has failed us all and is not free either. Profits for shareholders is a meaningless means without proper context. This overly simplistic linear style thinking that I’ve referred to in the past is unable to take into consideration any kind of dynamics or context as it pertains to the whole.

I second that – I now use ubuntu rather than the more unix-y linux flavours.The only downside is the lack of instant view netflix – for which I use the dual boot to go into vista….one day I will get around to virtualization…

I did not support the bailouts of the financial industry as they were done. We should have been using tax dollars to help revitalize the strong members of the industry and to lead the failing into some kind of controlled bankruptcy. We also could have strengthened the government safety net to help those unavoidably hurt during the ensuing fallout. Back stop the customers, not the company. Strengthen programs that provide basics such as food and shelter. Instead we bailed out insolvent institutions and will continue to live with the fallout for a long time. I prefer to get it over with, and build our financial industry back up with a firm underlying structure.The same goes with the auto industry. If we do not help them to restructure their debt, pensions, health care, and wages with a government sponsored bankruptcy they will never be competitive. If they are not competitive the bailout money will be thrown away. This industry has been heading for failure for a long time. For some to say that this is a sudden problem caused by the credit crunch is just plain wrong.I keep hearing people say the the UAW needs to have there wages cut, and I believe that they do, but there is not enough mention of the bloated wages and benefits of upper management. There has to be fair cuts across the board. We need to maintain industry in this country, and I say that we should fix the underlying problems not just bail them out.These are just a rough idea of my opinions, and certainly the problems are more complicated than I just mentioned, but it is the direction I would prefer our country to be heading.

The situation for the automakers is even worse than that. In a few years the Chinese will be sending perfectly good $5000 cars over here. I bet a lot of people will buy them, once their current car gets about 10 years old and needs replacement.This is a challenge for the Japanese manufacturers as well.

I wonder if they can do this and follow patent laws. I saw a report awhile back that showed one Chinese auto manufacturer as running a very shady business, at least as far as patents and intellectual property go. They will have to clean up their act or get sued by Auto manufactures who wish to protect their intellectual property.

I believe the coming downturn will be worse than the great depression for the following reasons;1. The bond market is pricing in a higher rate on corporate defaults than occurred in the great depression (GD1). Admittedly, junk bonds did not exist then so this may not be suprising2. The Baltic Dry index has plunged over 90%, and now exports from China have dropped for the first time since they embraced export driven growth.3. The US economy was been based on consumption, housing, finance and debt. Debt is now contracting (more about this later) and housing and finance need no explaination, as they are horriffic and everyone is aware of it.Easy credit has moved future consumption into the present. Anyone who was going to buy something for the next 5 years for which credit is available has already bought one – a car, a refrigerator, washing machine, etc. Everyone is set for mahor purchases for the next 5 years or so.4. Real income has been flat for a decade. Consumers made up for the rising costs of health care, prescription drugs, education, housing, autombiles, food and fuel by taking on more debt, especially tapping equity in the rising value of their homes. The Fed kept interest rates low and the administration removed some barriers in order to allow mortgages to be manufactured into securities, rated and sold. The mortgage originators profited on writing and securitizing and selling mortgages, not on holding them to maturity, so mortgages bacame very easy to get. Insanely easy. Soon marginal borrowers fell into foreclosure on homes they could not afford. Foreclosure sales flooded the market. House values are now falling, leaving many homeowners with negative equity in their homes.4. Debt is contracting. In a debt-based fiat monetary system, money is loaned into existance with interest. As a result, more money must be loaned into existance for the first debtor to pay off the original debt plus the interest. The money to pay the interest doesn’t exist until someone else takes out a new loan. As long as the debt grows perpetually, this works fine. But if debt stops growing or contracts, the music stops and not everyone can’t find a chair. There is no way all debts can be paid. No bank would lend in this environment. That is what is happening now.5. The government is now attempting to rescue the economy. Housing values have collapsed, and the finance industry securitized mortgage debt and sold teh securities which are now worthless. Many companies unwisely wrote insurance (CDS) or leveraged themselves in the easy money environemnt that just passed. The government could either try to replace the economic activity that has now collapsed, or ensure an orderly default on the now worthless debt through chapter 11, and FDICreceivership for insolvent corporations and bants. It is bailing out the industry with direct purchases of stock and by explicitly backing certain debt instruments, trying to replace the economic activity that is evaporating and support the debt and worthless securities. What should really happen is the worthless securities and insolvent companies should be allowed to wash out of the system, freeing the resources for productive companies.6. A deflationary spiral is now taking hold. As the government tries to support the now bankrupt and worthless aspects of the system, it is spending tremendous amounts of money. Since we have a budget deficit, this spending is financed by treasury auctions.7. In the past, Japan, China and oil producers (middle east and Russia) were the primarypurchasers of US Treasuries. Now that consumers have stopped spending, japan and china who are dependant on exports to the US dont have the dollars from the US to invest back into US treasuries. Oil exporters at $40 a barrel also have fewer dolalrs to invest back into US treasuries. Who is going to buy these treasuries now?The Fed will print dollars to buy them.8. To summarize, the Fed will print dollars to buy treasuries to fund propping up the bankrupted system. This puts the dollar at great risk. Inflation may take hold, and foreign investors may shun the dollar (they already are beginning to) or unload teir dollars while they are still worth something (China is already diversifying out of the dollar. The dollar may also lose the reserve currency status. This would be devastating for us as a debtor nation, since we could no longer determine the value of the currency we borrow in. We would have to make something that someone wanted to buy in order to obtain the reserve currency, since the world is already awash in dollars and if it is no longer the reserve currency no one will need any more of them.

1. Money is the joker good, good for exchanging for almost all goods and services.Therefore2. Theft of money is theft of just about everything.3. Every theft comes with an angry person attached; theft makes people angry. Theft of nearly everything makes people very angry. They try to get their stolen everything back.4. This results in endlessly escalating conflict between robbers and robbed, with endlessly escalating weaponry, which produces endlessly escalating misery for all.Therefore5. Pay justice, the justness of the amount people get paid, is absolutely crucial to happiness. Pay justice is far and away the most important justice.6. Pay injustice is inherent in, is built into, transaction itself. The two things exchanged cannot contain exactly equal work. The workvalue in workproducts is not precisely measurable.Therefore7. There is a drop of pay injustice in every transaction.8. Over many transactions, this drop of inequality will make an ocean of inequality. A bell curve of personal net gain or loss will arise and widen endlessly, with a few making large net gains or losses from the sum of their personal transactions, many making smaller net gains or losses.9. Those who make net gains will, over time, more and more control the means of production, including land. This will accelerate pay injustice.10. The pay injustice in one transaction is too small to be detectable, but the accumulation of transactions will in time make the injustice detectable, and will lead to violence.11. Without people aiming to pay justice and getting close enough to it, the violence will increase endlessly, as both sides try to prevail.12. This violence is egalitarian, it envelops all, and therefore condemns everyone to misery. The higher the overpay, the more it is attacked. More money gives more power to protect oneself, but it also increases the forces against it. Every plutocracy has fallen.Therefore13. Pay justice is good for everyone, for both overpaid and underpaid. Justice is a virtue, it does cause happiness, and injustice does cause misery to all.14. History has been a succession of rises of inequality to extremes, and falls of same, and re-rises of inequality.15. Companies, businesses, are centers of transaction. Inequalities are gathered in them, concentrated by them. Many people buy there, but owners are few. All excess over fairpay for work is gathered by owners. Corporations are just bigger companies, with more power to lever things their way.16. Customers have few means to calculate the total costs [the work-input] in work-products. Companies have many means to monitor costs.Therefore17. In general, companies have the advantage, leading to exacerbation of pay injustice, leading to acceleration of pay injustice, leading to acceleration of violence [war, crime and weaponry], leading to acceleration of misery for all.18. History is unanimous in portraying growth of inequality, leading to violence, leading to fall of states, empires, plutocracies, causing temporarily a degree of reduction of inequality, which then regrew.19. Division of labour created the necessity for trade, to remix the workproducts separated by division of labour.20. Before division of labour, everyone mostly consumed their own workproducts, so equality was inevitable.21. About the same time division of labour began, wealth began to be more and more nonperishable and therefore storable. So that when trade began the drip-drip-drip of inequality, wealth was storable. If wealth had remained mostly perishable, inequality could not have accumulated endlessly.22. When people perceive inequality, they have two choices. They can strive to decrease and remove inequality, or they can try to climb the hill of inequality.23. If people fail to see the huge downside of overpay [ceaseless attack from both overpaid and underpaid, causing endless labour to hold on to the overpay, and inevitable loss of overpay], and if they do see the apparent advantages of overpay, they will choose the latter course.24. The greater the underpay is, the more attractive overpay will look. The greater the underpay, the more desires are frustrated, and so overpay will look that much more attractive. The underpaid have substantial desires unsatisfied, and overpay will satisfy these. The underpaid have no experience of the limits of desire.Therefore25. People have historically chosen to climb the hill of inequality, rather than aim for equality, causing themselves endless increase of inequality violence misery.26. Overpay suffers from the limits of desires, and from the endless security cost [in time, money and labour] in holding on to the overpay, so overpay is necessarily of negative benefit – increasingly negative in proportion to overpay. Fairpay satisfies all desires. This was true before machines and computers, and it is far more true now. The happiness effect of more money declines to zero below US$100,000/year per family, because of the limits of desires, and the world-average pay per family is US$200,000/year. [US$40/hr [2007] for all workers including housewives and students.]27. Overpay causes underpay, so uncontrolled growth of pay injustice exhausts the buyer base, leading to collapse. The cycle of money between buyers and sellers is broken.28. The purpose of money is to facilitate trade. Money is an artifical barter item, with the advantages of portability, divisibility, nonperishability over time and distance. Money in a transaction is ideally equal to the workvalue of items traded. The impossibility of measuring workvalue precisely lets the ‘imp of transaction’, the drop of inequality, into trade.29. The ever-growing defense costs of overpay force the ever-increasing extortion from the underpaid, accelerating violence.Therefore30. The overpaid promote and support inequalities in the system.31. The underpaid also support inequalities in the system, because they hope to repair their underpay by them. Also, they feel justified in their own injustice by the injustice [overpay] in the system.Therefore32. Everyone becomes increasingly entrenched in defense of injustice, and everyone becomes increasingly averse to justice, although justice would release the overpaid from escalating danger and defense costs, from oppression from both the overpaid and the underpaid, and certain fall [the greatest fortune is finite, and the attacks are relentless till the fortune is gone], and would release the underpaid [now 99% of people] from the miseries of underpay, and from the oppression from overpay. With the present super-extreme inequality, everyone is super-extremely averse to justice. Super-overpay is a beacon of hope to the underpaid, the pinion of their hopes and dreams. Justice, the demolition of overpay, seems to them the demolition of their only hope. People are psychologically blocked from examining justice and injustice objectively. They cling desperately, mindlessly, to injustice.33. The pressure, on both overpaid and underpaid, to participate in injustice ensures that everyone has guilt, which they cannot face. This strengthens the psychological block.34. It prevents people from criticising overpay. People cannot look at overpay, at present up to 100,000 times average, and say: this has to be wrong. The common-sense reflection that, if you gave people the same tools, materials, information, etc, and 100 varied tasks, the production of individuals would not be very different and would fall within a far smaller range than present pay from 100,000 times average pay per unit of time to 10,000th of average – is blocked. People cannot take to heart the justice implications.35. The sense of pay justice, of equal pay for equal sacrifice made to working, is indestructible. Overpay will always be under attack, under erosion. Pay injustice, robbery of virtually everything, the joker injury, the total injury, will always produce reaction. The underpaid have less power, but they never settle for being robbed. Injury energises. As doormats, people are totally unreliable. The underpaid can only throw sand, but sand erodes rocks. None enjoy unless all enjoy. The underpaid have lost many battles, they have never lost the war. All conquerors have merely begun a war with finite plunder against a tireless host. The person who has, by whatever cause, the workproducts of 1000, merely has 1000 times what he can use, and has gained 1000 enemies and lost 1000 friends. The golden rule is harder than steel, utterly unbreakable: hurt people and they hurt back, equally or excessively.Therefore36. Pay injustice is impractical.37. Weaponry is now at 60 times PDC [planet death capability] and rising.38. Inequality [ratio of highest to lowest pay for equal work] is now at one billion, and rising.39. Finance, communications, transport, weaponry are global. Global means every house. Money and goods flow easily through national borders. Though there are few countries with more than trillion dollar GNPs, trillions are traded daily. Therefore a national perspective is unreal.40. Happiness is everyone’s everything. Happiness depends totally on reality. There is no real happiness in unreality. Unreal happiness is a nonentity. Reality is in the big picture, in the perspective that takes in every part of the field that affects the individual. Part of the picture is nothing like the whole picture.Therefore41. Pursuit of happiness depends totally on pursuit of the big picture. Seeing part of the picture is complete blindness, complete abdication of pursuit of happiness.42. The third world is rising to 90plus% of population and of world wealth by 2100.Therefore43. Humanity will learn the sense of pay justice, or the third world will move to overwhelm and destroy or enslave the first world, probably in the next 30 years, give or take 30 years, and the first world will be forced to use the global bombs in self-defense, and kill everything.Therefore44. We cannot afford the luxury of unrealism, of clinging to familiar mindsets. We must immediately begin to be heroically mature in thought, or perish. We must face and accept a steep learning curve, and dig out longheld and deeply accepted ideas that don’t stand up to examination by cold hard rational sense.45. Technological progress would be, via pay justice, on the order of 100 times present rates, because at the moment 90% of educated brains are tied up in the consequences of the super-extreme inequality, in governments, military-industrial complex, legal systems, universities, hospitals, and 90% of brains are too poor to become educated. [90% of people getting between 100th and 10,000th of average pay/hr.]46. If a government took 90% of income off 90% of people and gave it all to 1%, there would be the loss of 81% of happiness just in the loss of the money, and on top of that, there would be the misery of the extreme violence, the severe loss of productivity from the violence and the destruction, and the extreme loss of safety for the 1%. The 1% would not gain any happiness from the overpay because of the limits of desires.Therefore47. Loss of happiness in this situation could reasonably be said to be around 99%.Therefore48. Reversal of this policy could reasonably be expected to increase happiness by a factor of 100.49. The inequality factor [ratio of highest to lowest pay/hr] in this example is only 820.50. The inequality factor in the real world is one billion, over a million times greater than 820.Therefore51. Happiness can very reasonably be expected to increase very conservatively by a factor of 100 with pay justice.52. Decrease of happiness over 3000 years would be imperceptibly slow [1% per 30 years], and lacking an objective measure of levels of happiness over that period, we have no way of knowing the levels of happiness of former times. We assume that things have always been as they are for us. But given that violence misery is caused by inequality, and that inequality has grown over that period from equality, it is reasonable to believe that former ages experienced levels of safety, peace, and fraternity that we cannot imagine, that wars affected few beyond those who chose to participate. [It is believed by archeologists of Crete [at the point in time when division of labour, trade and nonperishable wealth were in their infancy] that Crete had 3000 years of peace, and we know that everyone on Crete had multi-room houses with plumbing, whereas now 40% of people live in terrible slums, and nuclear extinction hangs over us all. War has grown to world wars and ICBMs. It is only in the 20th Century that civilians were embroiled in war in great numbers.]53. Violence [war, crime and weaponry] has grown for 3000 years, while human nature has not changed.Therefore54. There is no correlation between war and human nature. Noncorrelation proves noncausality. [Correlation does not prove causality.]Therefore55. War violence misery is not inevitable, and resignation to it is not appropriate.56. Violence correlates with inequality, and there are good reasons to believe inequality is the cause of violence. [Money is the joker good, good for virtually everything, including social power.]57. Inequality is very bad for both overpaid and underpaid.Therefore58. There is good hope that clarification of this reality can effect change in human culture. Culture is rooted in, and driven by, ideas. Change of ideas changes culture.59. If everyone who masters this clarification teaches it to just two people, every adult will master it in just 31 times the time it takes to teach two.60. If everyone, or the vast majority, masters this clarification, there is no effective opposition, and equality can be restored. 99% are underpaid, and so will be better paid, and equality will prevent nuclear extinction, and vast unhappiness to both overpaid and underpaid, so the majority for equality will be 99+%, and so any opposition will have no muscle to oppose it.Therefore61. The change can be made by education, and without conflict.62. The above assumes that the fundamental will of humanity is still towards happiness and not to self-harming. The vast evil mess we have got into may have so perverted our fundamental natural will that we do wish self-harming.63. The above also assumes that we can face, and forgive ourselves for, and put behind us, the unkindnesses that the pressures of inequality has led us to do.

Keep voting for the same parties and you will always get the same results every time. Each party tells the base of their people; vote for your trusted party again because this time we can not afford to lose look at what might happen if they win. Bull, nothing but the same over and over again those who associate themselves with the two parties expecting change have actually given up and do not know it. Keep pulling for your team and believe the propaganda spewed by both that all will be lost if you vote for a third party, any third party would be better than what we keep getting from the established two party system. Don’t even try to say oh but this time it’s going to be different, Please wake up.

@ painter and Theta, I hope you found my Chapter 6 posts in the thread 2 threads ago.

I was not disagreeing with what you had to say, just adding my feelings on the topic.

The implications are far greater than that, if you thought you had 10 billion dollars but over night learned you really only had 5 billion that would cause a huge shift or pull back in your investments. You’d likely pull out half to 3/4 of the money you currently had invested as a result. It would completely alter your strategy and level of current risk.

PeteCAIs this happening with silver as well? THX.

Funny how when this credit crisis hit a few billion euro seemed like a lot of money, now when the financial pundits are tossing around the trillion number, a few billion seems like peanuts.

I should have said, funny in a sad kind of way.

Well I for one completely agree, I agree it is the source of the problem and the focus on the credit crisis though necessary also diverts our attention from the truth. I wish N.R. would address these issues I sometimes get the impression he believes the crisis was created in a vaccum.

Jason,When the dollar crashes, it will be quite easy for the US to make things. US wages in proportion to Europe, Japan, etc will be quite low at the new exchange rate. A crash in the US Dollar will see a boom in US manufacturing. Certainly a painful process, but long overdue.I might add the foreigners holding US debt will be severely disadvantaged because the debt is in USD. You may in fact see them sell at cents on the dollar just to get rid of it. Oddly, US banks (with bailout funds) would be well placed to buy this debt below cost.

excellent post!do sneakers count? -sandals? -galouches?

Long overdue, but the pain is hard to overestimate.How will we make things? With what factories? They have all been boxed up and shipped to China, or left to rust. Workers who know how to manufacture – the welders and machinists and lathe operators, have retired or died, and not trained apprentices. Build new factories, train new workers? Who will we buy the factory equipment from? With what money? Who will loan us money to build factories? Who will teach new factory workers? How long until they know what they are doing? Assuming we can get some things manufactured, who will buy the stuff? China?A painful transition indeed. And it is made more painful the longer that the government tries to prevent it.

Thx for your reply. I guess you believe that the ratio Gold-Silver will widen further…

Hard to say how people will see silver in next couple of weeks. But watch gold and see if it heads decisvely above $850-$860/oz. That’s important.PeteCA

JB: Lotso of good points there, and the items related to T-Bills, UST’s & Bonds and the Baltic Index bother me the most.PeteCA

I think we will go through some kind of blow-off top like in November 2007 but I don’t see how this can hold. I am happy watching on the sidelines. It is to dangerous out there to be betting on year-end rallies, january effects, etc.But never forget market forecasting is a very low success adventure:-)

got the utube link yet?

In a previous tread I reminded y’all not to forget about the sub-prime loans originated about 18 months ago and that they are “low hanging fruit” ready to drop into our bowl of economic misery.Well, 60 minutes has a segment this evening http://www.cbsnews.com/stories/2008/12/12/60minutes/main4666112.shtml reporting on the coming second meltdown that NR has been predicting since 2006.Investment fund manager, Whitney Tilson, ran the numbers on what were supposed to be higher quality mortgages: “It was data we’d never seen before and that’s what made us realize, ‘Holy cow, things are gonna be much worse than anyone anticipates,’ I mean, you can look back at what was written in ’05 and ’07. You can look at the reset dates. You can look at the current default rates, and it’s really very clear and predictable what’s gonna happen here,”"… the sub-prime was approaching $1 trillion, the Alt-A is about $1 trillion. And then you have option ARMs on top of that. That’s probably another $500 billion to $600 billion on top of that,” Tilson says. (That’s $2.6 trillion in loan defaults yet to come.)Asked how many of these option ARMs he imagines are going to fail, Tilson says, “Well north of 50 percent. My gut would be 70 percent of these option ARMs will default. We know it based on current default rates. And this is before the reset. So people are defaulting even on the little three percent teaser interest-only rates they’re being asked to pay today,” Tilson says.Sean Egan, runs a credit rating firm that analyzes corporate debt, says he expects 2009 to be miserable and 2010 also miserable and even worse. Fortune Magazine cited Egan as one of six Wall Street pros who predicted the fall of the financial giants. “It’s getting worse,” Egan says. “… the supply of housing units on the market … grown from 2.2 million units about three years ago, up to 4.5 million units earlier this year. So you have the massive supply out there of units that need to be sold … the economic difficulties, are not going to be resolved in a short period of time. … we’re looking at probably about three, four, five years, before this … supply overhang is worked through,” Egan says.And to echo NR: “we’re maybe halfway through the mortgage bubble. But we may only be in the third inning of the overall bursting of this asset bubble,” Tilson says. But then Tilson jinks his commentary and says: “…with U.S. stocks down nearly 50 percent from their highs, we’re actually finding bargains galore. We think corporate America’s on sale”

Response deeply appreciated, nedhead.I (and a few others I know) be living proof that people can get this. I was once not ready for this kind of thinking, either – and I am just an average housewife and worker from the working class.And you and guest are getting it. I am passing it to you. We are succeeding right now.On the other point, I hope you’re not waiting for God to disappear, Sugar. God’s scientific name is Existence Existing.Relax, You’re soaking in it!Welcome to the eternal happydance of the dance-happy atoms, Love.”I laugh at those who look for God as I would laugh at a fish in the ocean looking for water.” – some Saint I can’t remember said something close to that.)

Well, I admit that it was a bit beyond my attention span (especially given that my cat appears to have had another stroke a short time ago, and my son informs me that it’s dinner time).The points that I was going to make were as follows:1. Even if everyone who frequents this board were to respond to your post in agreement, how would that help to further your cause?2. How do you propose that these ideas be implemented? I mean, specifically–not just “pay needs to be equal”, but “a series of pay scales would be developed in terms of all currencies, including straight-across trading, like milk for butter”. I mean, I guess my brain simply isn’t sophisticated enough to be able to envision this sort of thing in this day & age. I appreciate philosophy, but you seem to be frustrated that nobody appears willing to translate your ideas into a working real-life model, and I don’t know that it’s so much that people aren’t willing, as that they cannot conceive how to achieve such a thing (especially when few others, if any, are on board).3. I was once married to someone who felt that everything was his due, that he was entitled to whatever anyone else had, regardless of the amount of or lack of work/effort he had put into achieving the same results in his own life. He despised work, he only liked others for what they were willing to give to him or do for him, and as far as he was concerned, everything ‘bad’ that ever happened to him was the fault of other people. Nothing was ever his fault. Pay justice is not going to make much of a difference to people like him. Is that to say we shouldn’t try? No. Only that pay justice is not the one & only key to happiness, although it certainly would go a long ways towards it.Thanks for posting, though. You have a lot of well-thought-out points, and I will be coming back again to read them in more depth when I have more time to devote.

If you add in all debt the debt has grown to 53 Trillion dollars.Debt calculator as of tonight shows, $10 trillion $609 billion or $34,715.00 a piece.So my wife and I owe $69,430.00 combined. That’s for $10 trillion now $53 trillion would be $183,989.50 roughly or $367.979.00 combined that’s if we paid it today tomorrow would be a little different. Sure I think we can pull this country back together no problem since we produce so many great things the world need and wants, now if we were a service based economy I might reconsider. Good luck on getting my brother in law to pay his share or the other 300 million people out picking up cans today.

Pete, what course of action do you expect habitual gamblers to take? After all, isn’t the stock market all about “betting” and gambling these days? The recent investor behavior in the markets is just like going to Vegas. How many times have you seen gamblers “doubling-down” in face of severe losses? Isn’t that how they try to recoup their losses? Do you see any difference between the casino we called the New York Stock Exchange, and Caesars Palace or the Bellagio?The main difference I see is that the Federal Reserve is guaranteeing the looses in the NYSE casino. The FED believes that this kind of gambling and speculation is good for the economy, and the prudent should be taxed and pay for the losses of the idiots. Needless to say, other central bankers have followed suit.A casino would not stay in business long if it paid for the losses of its player, and neither will the U.S. government.

Agree. So what are these investors going to do? Will they retreat into gold? That would be my guess. This will only deepen the recession/depression.

You know … I’m starting to think that Caesar’s or the Bellagio actually makes a lot more sense than Wall St. After all, if you put $$ on a roulette wheel then you understand the risks exactly, right? You know the odds, and if you can stand them then the transaction is yours. And if you actually happen to win, the house will pay off the entire winnings. On the other hand, Wall St is just feeding people more and more BS – and at the same time destroying their life savings. It’s conceivable that people could be better off just withdrawing what’s left of their 401K’s and sticking it in their mattress. Maybe some are doing this. I am receptive to the argument that P/E’s will eventually become attractive (but don’t necessarily agree that the US market is the best choice).PeteCA

An “idiot” was a person with a very severe mental retardation, or a very low IQ level, as a sufferer of cretinism, defining idiots as people who’s IQ were below 20 or under a mental age of less than 3 years.Yes that word works well for your description. Good Job.

Once upon a time, there was a man who was head of the CIA. He was also a good friend of the royal family of Saudi Arabia. By and by, he became the president of the U.S.A. He presided over a war against a nation he formerly supported. The war was quickly won but the government was left intact and in power.After a suitable amount of time elapsed, the man’s son became the president under questionable circumstances. This was unexpected by all because the son had a habit of ruining everything he touched, kind of a reverse Midas. The son wanted to impress his father in spite of being a perennial screw up. His father wanted to help his son so he used his CIA contacts to infiltrate an Islamic terrorist group. They found a group of Saudi’s who were willing to die for the cause of Islam. The Saudi’s were given training in the rudiments of aviation and sent on a suicide mission.Meanwhile, agents of the new president planted explosives in the buildings of the World Trade Center, at strategic structural points so that when they were detonated, the building would collapse in a planned demolition manner. Everything went as planned. Four planes were hijacked. Two flew into the buildings and the charges were detonated, causing three buildings to collapse. One building collapsed “in sympathy” with the other two since nothing hit that one. The explanation was that the burning jet fuel melted critical structural elements causing them to fail. This was widely accepted by most, even though the temperature of the burning fuel was insufficient to melt the steel members in question.The other two planes continued towards their targets. One crashed in Pennsylvania, but no one saw what would be expected at a crash sight. There was no luggage, no seats, no bodies, nothing, just a groove in the ground. The second plane crashed into the Pentagon. It left a hole smaller than the height of the plane, even though the plane was reported to penetrate the outer wall. Again, there were no bodies or debris visible.The whole terrorist act was attributed to the black sheep of one of the leading Saudi families. The 9/11 “act of terror” was used as a rationale for starting a second war with Iraq, even though Iraqis weren’t involved. Iraqi oil was going to pay for the war. Many friends of the president’s father were going to profit handsomely from the war and the father was duly proud of his son. He had finally turned in his ugly duckling costume and became a swan. He traveled to the nation he conquered were he was given a hero’s ovation. The people there have an interesting custom. Instead of throwing flowers, they throw shoes. They make their feelings known with Rockports, Doc Martins and old Buster Browns. The proud father will have the shoes bronzed and placed on his mantle, next to a photograph of his son on the deck of an aircraft carrier, proclaiming: “Mission Accomplished.”

No, I’m not waiting for God to disappear. I meant “religous” names. I think it was a Muslim saint.

I like the bumper sticker that says ‘I have no problem with God, but his fan clubs are driving me crazy’.IMO, there is a silver footprint of truth that has been left for us in the scriptures, but the words of the ‘churchmen’ have often been far from the word of God.Henry George once wrote that religion was perhaps the only thing powerful enough to cause the needed change in people’s minds, and I found his remark well worth contemplating.Whatever, this plan has no religion and no anti-religion in it, making it the biggest tent where everybody fits.And when you’re in the political arena, it’s ALL about winning a majority to the idea, eh?

Nice essay. U the writer?

So?That doesn’t answer my question as to how any of the proposed fixes, including trying to bail out the 3 big auto makers, does anything to solve the underlying insolvency that is at the core of the crisis. At best, all it is doing is keeping the patient on life support. But anything more than that, just doesn’t compute.How can this possibility be over in 24 months as the professor predicts? Don’t we have to get rid of the over indebtedness first? Isn’t that going to take a lot of years as we wind down from the highest peak of debt to income ever recorded in this country? Not quite 2 times the last peak in 1929/30 but close to it. And that is just the debt that is on the books… How much debt do we have hiding in SIVs and Level 3s. And what about all those insurance contracts (derivatives) that will have to be paid, renegotiated or decided by the courts. There will be bankruptcies and right downs and job losses and more foreclosures for a long time. We haven’t even gotten into the extreme mess of the commercial real estate over building on steroids either. There is just no way this is going to be cleaned up and back to positive growth in another year. Not even close.The predictions are extremely over optimistic and neglect the most likely human reaction to all this obfuscation and that is to not trust financial institution or leverage for a long long time.AND all these programs the fed and government are doing is just to keep the system from imploding and have nothing to do with fixing the problems. Unfunded mandates and program promises and a totally broken health care system for the majority of Americans. Not to mention where most pension funds are going to be when they finally mark to market realistically. And most of our educational system sucks. My brother who runs a research lab, can’t hardly hire a qualified American. Most of the people who know anything about lab research work are foreigners.I see the only possible way out of this is massive middle class tax cuts along with massive rebates so that personal and business debt can be paid way down leaving them with lots of room for new spending. Otherwise, where will the new spending come from? The government? No where near enough to pay down the burden of debts we have signed up for and can’t service.And none of these fixes consider the aging population either..Not going to be over in a year. No way! Maybe 3 to 5.

I read that article on Bloomberg…it’s about timethey go under.hero

There is one difference, the banks make money. If their debt was wiped out and they started from zero they would make money. If the Big 3 were given a clean slate they would immediately start losing money again on day 1. That being said, I don’t agree with the bank bailouts either. And lets be honest, even with a bailout the domestic automakers are going to lay off AT LEAST a third of their work force and realistically more like half. If the car compainies are allowed to fail and go to bankruptcy they will have to cut about half their production so how is this any different? Either way it’s massive failure and unemployment only the US taxpayer saves another $14 billion. I wish we had saved the other $335 billion too.

So how do you explain the lack of bodies to the families of those who died on the aircraft? I’m just curious? maybe you and others that believe this are just dumbshits? I mean i’m just throwing that out there. You may be right then again you may be a total fuck tard…I just don’t know

Dear Guest,I’m happy that my comments were received by you in such an open minded way. You allow for the possibility that I may be right or I may be wrong. Is it possible I could be wrong without being all the names you called me? The explanation to the families of those who died could simply be their bodies were incinerated, even though credit cards and other items were found unscathed.

M.O.G. Thank you for the thorough analysis of justice and its impact on the human psyche. I am reminded of the writings of Buckminster Fuller from forty years ago. The title one of his wonderful books was “Utopia or Oblivion”. It was a very uplifting treatise that proclaimed the promise of a rich future for humanity if we chose the right path. Those who are pessimistic often invoke “Human Nature” as the mark of Caine that dooms us all. In fact, most pessimists have a very limited view of human nature, based on religious teachings such as original sin or their own personal experiences with injustice. The information about human nature is in its infancy but there are aspects of it that are undeniable, even to the most pessimistic misanthropes. Human beings behave altruistically every day in a thousand different ways. That is also part of their intrinsic nature. We don’t need to examine Richard Dawkins selfish gene ideas or the writings of Edward O. Wilson as he examines social insects, in order to see this. We simmply have to look at compassion and empathy as it is practiced in this world in all cultures that are not under severe economic or environmental duress. If we do, we can observe the germ of Utopia waiting to emerge when conditions are right.By creating the right environment, we can minimize aspects of human nature and maximize others. Life acts in such a way as to alter the environment to make it favorable for more life. This can be seen in nature all the time. It is the basis of the Gaia hypothesis and the reason a beaver builds a dam or a termite builds a tower designed for maximum ventilation. Our capacity to change the environment should not always be seen as a negative trait. We must remember that our environment includes each other as well as the soil, water and air. I am convinced we can create super brain power with the same technology that threatens us. With this brain power we can advance the prospects of humanity by huge quantum leaps. It is in fact, our only choice. We are at that critical juncture now. It is now we must choose between Utopia or Oblivion.

5:30 am i hope that today i can shed yesterdays unwillingness that keeps me inside of me

Thanks for the most interesting reminder and update. Since this is “old” news in Internet terms one tends to forget.I have no doubt that people who are good at picking individual stocks more often than not (there aren’t too may of them) would find companies that are priced so that long term returns are more attractive that they were in the most recent “lost decade”*.* check the 10 year return for the indices and most mutual funds. You will find it is close to negative 1%/year compounded, including dividends. Ouch!

WB some people don’t seem to know what an essay is.

And, don’t forget Asia and Europe closed SHARPLY lower Friday. These markets are just “adjusting” the Friday drop given that the US was green on Friday. Asia roughly got back to to the Th close level and Europe may not achieve that.Short term, foreign markets correlate very strongly to the US, specially in times of fear.

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/09/AR2008120902816.html?sid=ST2008120903238&s_pos=No, “Leadership” failure…!Yes, incompetence and stupidity.Ho hum

Bingo! My coonclusion seems to be right.I Knew Bernie Madoff Was Cheating, That’s Why I Invested with Himhttp://finance.yahoo.com/tech-ticker/article/145115/I-Knew-Bernie-Madoff-Was-Cheating-That’s-Why-I-Invested-with-Him?tickers=%5Edji,&gspc,%5EixicInteresting tidbits coming in about Bernie Madoff (read indictment here).Specifically, we’re hearing that the smart money KNEW Bernie had to be cheating, because the returns he was generating were impossibly good. Many Wall Streeters suspected the wrong rigged game, though: They thought it was insider trading, not a Ponzi scheme. And here’s the best part: That’s why they invested with him.For years and years I’ve heard people say that [Bernie's] investment performance was too good to be true. The returns were too steady — like GE earnings under Welch — and too high given the supposed strategy.One Madoff investor, himself a legend, told me that Madoff’s performance “just doesn’t make sense. The numbers can’t be straight.” Another sophisticated Madoff investor actually went through trade confirms in order to reverse-engineer the strategy and said, “it doesn’t add up.”So why did these smart and skeptical investors keep investing? They, like many Madoff investors, assumed Madoff was somehow illegally trading on information from his market-making business for their benefit. They didn’t consider the possibility that he was clean on that score but running a good old-fashioned Ponzi scheme.And another from Whitney Tilson:One friend who saw this coming said Madoff had his own broker-dealer and a relative as his finance guy; another friend said he was suspicious because of the 1-2%/month returns with never a down month (much less quarter or year), combined with never showing a a down month (much less quarter or year), combined with never showing anyone his portfolio. 99% of the time, if it sounds too good to be true, IT IS!Got your own Bernie Madoff stories? Please send them in. (hblodget@alleyinsider.com).video is good too!

Capitalism and socalism are not mutually exclusive. The US has many socialist programs.

Here is the reasoning that is scaring me:1. Most housing loans are underwater – the net amount realized from a sale (should you be fortuntate enough to actually sell) will be less than the equity and so the seller will have to bring money to the table. Since no one has cash, this difference will have to be financed. Since the underlying property collateral is sold – who will finance the seller ? Secondly, why bother selling and still be stuck with a mortagage with no asset ? In my opinion anyone who does the numbers will realize that the only logical course is mail the keys in and rent.2. Most banks are now not making jumbo loans (> 475K). What is going to happen to the thousands on “luxury” home and apartments that now nobody can finance even with good credit rating ? What are the people who own these properties and need to sell (lost job, bonus, equity loss, Madoff ..) going to do (see item 1) ?We are going to see a housing collapse and foreclosures on a monumental scale. The only thing the govt can do is inflate like crazy so your million dollar house is now worth 10 million useless dollars.Comments ?

European banks suffer new hit from Madoff scandalhttp://sg.news.yahoo.com/afp/20081214/tts-us-finance-crime-fraud-victims-europ-972e412.html

……A British investment fund that also acknowledged being a Madoff client criticised what it called the “systemic failure” of US regulators.Bramdean Alternatives Limited said the accusations against Madoff raised “fundamental questions” about the American financial regulatory system.”It is astonishing that this apparent fraud seems to have been continuing for so long, possibly for decades, while investors have continued to invest more money into the Madoff funds in good faith,” the firm said in a statement.Bramdean Alternatives invested around 21 million pounds (23.3 million euros, 31.2 million dollars), or around 9.5 percent of its portfolio, with Madoff’s company.British newspapers reported that among Bramdean’s clients is property magnate Vincent Tchenguiz, one of Britain’s richest men, who apparently invested 40 million pounds with the firm.……Swiss bankers face losses of up to five billion dollars (3.7 billion euros), Geneva’s Le Temps newspaper said.……

The question is, how many other Madoffs are currently functioning in the U.S. but have not been exposed? As Bramdean Alternatives Limited said in the statement, it is astonishing that Madoff was able to continue the scam for so long. Apparently the U.S. financial regulators suffer from a on-going inability to control that country: there was the Enron scandal, the Worldcom scandal, the mortgage crisis fueled by laissez faire regulation, and now the Madoff type scams on the Wall Street.In fact there could be many Madoffs on Wall Street, knowing U.S.A.You would think that Capitalists would know best how to run an economy, but apparently it is not a given.

Agree with JB.Statsdoc, you say “Capitalism flourishes even in socialist countries. “. This is 100% right but this is not a virtue it is just a show of our natural, animal, egotistic nature. Since this cannot be changed it is better to embrace capitalism that utopic economic systems for which mankind will never be ready.However, capitalism with now rules, i.e., “capitalism Darwin style”, might not be what you want if you have any compassion for folks that are not as well endowed to accumulate wealth as you are.

Perhaps, it’s more like this: Capitalists know best how to profit from an economy. Take away regulation and guess what? An economy sucked empty, the state pumping it up again. Capitalists looking forward to the next round of sucking. The bigger the flows of money, the greater the attraction on the greedy ones. Where is the cure?

On a first thought, the Mad-Off Ponzi appears to be a “black swan” event (i.e., a very very low probability event). What do I mean by this?If you read the guy’s CV, most folks, the unsophisticated and sophisticated alike, would imagine that guy with his “pedigree” was as likely to run a Ponzi as an asteroid to wipe out earth (The sophisticated investors actually thought he was cheating other investors to their benefit). I am sorry, Mad-Off investors made a BIG mistake in their probability assessment. The proportion of crooks even among the most educated, most ethical circles is a lot lower than 1 in a million.So the truth is that the Mad-Off Ponzi is not a black swan. People are a lot more crooked than more people think. And the incidence of crookedness may be independent of education, hierarchical level, fame, etc.Learning: We need to be more skeptical about the “goodness” of people of stature.

and watch for the appointment today of Nobel Prize-winning physicist Steven Chu as energy secretary – a very hard c(G)ore human caused Global Warming dude – notwithstanding the frigid temps in much of the West (as I had alerted last week) and a few hundred renegades who dispute the notion that we are causing climate change. Of course Obama considers it settled science so it must be so.U. S. Senate Minority Report: More Than 650 International Scientists Dissent Over Man-Made Global Warming Claims Scientists Continue to Debunk “Consensus” in 2008

Fully agree, especially about those who are good in boasting about their goodness. Bush (great defender of freedom, not mentioning oil barons), Madoff (ethical standards), Mozillo (making home ownership possible for Americans) etc.. When will society finally accept this given and protect itself against it?

Be careful when calling man made warming a fluke you are treading on the next bubble needed to restart the economy, however with the investment banks all but destroyed we the tax payer will pay for the next bubbles rise and its ultimate collapse. It doesn’t matter who is right, it only matters from which point of view the most money can be generated. If it is solar flairs causing the change then no money will be spent as you can not regulate those. It’s not about science, its all about the money.

Now, this is stupid:-)

Excellent article. Thanks for the pointer PeteCA

exactly

couldn’t agree more but it’s going to happen – after all it’s impacting “charities” and some high powered folks -

and now on CNBC an elderly couple of modest means that had invested their life savings with Madoff – Moms Dads and just regular folks have been hurt by this — College funds for their kids – - just wait when the PR machine gets going on this you’ll see a piece of tarp cut out – after all it was the SEC that let everybody down …

“A crash in the US Dollar will see a boom in US manufacturing. Certainly a painful process, but long overdue.”I agree we need more domestic manufacturing, but a major component of this crisis has been overproduction and oversupply of goods – too many houses and cars, too many consumer goods of all kinds, etc. The government even pays farmers to produce LESS food. Factories are idle all over because there is already an oversupply of so many things (cars, TVs, appliances, and so on) and they don’t want prices to fall any further on these goods.The capitalists keep churning out all of this stuff for people to buy but the consumers cannot buy anymore because people already have what they need, they are deep in debt, or their wages are stagnant and they are only buying the basics.We need deflation (prices on everything fall at least 25-33%, especially basics like houses, cars, food, clothing, etc) — otherwise, we need a huge rise in the average wage while prices stay the same. Doesn’t look like this will happen anytime soon so we’ll be in this slump for a long time to come.

Obamajobs: yup, filling potholes — http://isteve.blogspot.com/2008/12/obamajobs-yup-filling-potholes.html

Ain’t Gore gonna get some kind of prominent appointment in Obi’s land?

Dishonesty-cheating, stealing, lying, always seems to partner with Greed; but once you’re branded dishonest, watch out, because like a common thief, America’s way of life will be imprisoned by the rest of the world’s refusal to lend money to us! What goes around comes around or better put by John Lennon’s song “Instant Karma”!

The rally police are sticking their nose into things here…

Keep in mind that the human made global warming business can be quite lucrative and generates huge grants for the scientific commnunity.Here is a link from a pro human made global warming site (nsdic.org) – they were really beside themselves back in October as there was a significant increase in Arctic ice formation – that has carried on into November but they frame it in such a way so as to discount any data that undermine their position. The following is based on their data and commentary (link below)Average Arctic sea ice extent for the month of November was 4,100,000 square miles up from 3,880,000 square miles in November 2007 vs. the 4,360,000 square mile November average between 1979 and 2000. graph and this quote from them

The period of very rapid increase in ice extent that characterized October and early November has ended. The rise in ice extent through the remainder of November and early December has been much slower. The daily rate of ice growth has slowed simply because there is less physical room for ice to grow: the area of open water shrinks as ice fills it.

National Snow and Ice Data Center Then there is the issue that relates to human made versus climate cycle.

speaking of grants … I guess big oil won’t be leaving the White House after all: circa 2007

Berkeley Lab is a member of a partnership with UC Berkeley and the University of Illinois at Urbana-Champaign that won a stiff competition for a $500 million grant from global energy giant BP…But in the end, it had what BP needed — Nobelist Steve Chu of Berkeley Lab, whom Berkeley Chancellor Bob Birgeneau calls “our messiah” and whose vision is generally credited with paving the way for EBI’s success; bioscientist Jay Keasling, whose synthetic biology innovations set the standard for transformational science; a Who’s Who of great minds in multiple fields from both campus and lab; and research facilities unlike any other, featuring cutting-edge technologies that developing an entirely new fuel source will require.

Read more

12:36 p.m.[TM] Toyota to suspend building at new plant in Mississippi: WSJ

@ OR”Not unreasonable to expect following the excesses of the two* largest bubbles in history”It wasn’t 2 bubbles. It’s all the 401k bubble. Those were just 2 parts of the flow and masking.It is unravelling.As I stated on my thread… My jitters are at all time highs. (remember, my write ups were started before much of this new news had come out. I’m literally “scared” right now.)Miss America

It was reported that the Arena football league will be suspending it’s season after 22 consecutive years of play. A spokesman for the AFL said that they will be applying for TARP funds to stimulate fan interest…;^)

MA, if you can reply, where is this “unravelling” emerging from-hedge funds?

Guys,I completed my blog on China and its ability to adjust to the slowdown. If you will forgive me for linking another blog here: A Dragon on Winter’s Eve China is a fascinating place. I hope I have added a unique perspective on this most fascinating of questions – can China adjust?ex VRWC

The next to come with their hands out begging…1:23 p.m.State budgets expected to drop for first time in a generation

This is bad news (at least for people who live off USD savings like me). It means they are beting the USD will be a “competitive” currency. I guess a weak USD ain’t bad news for everyone:-)

Well looky here, 0 is near! No welling allowed! Rally Police said so

I was just wondering that. A green close would not be a surprise to me. Green and red are both favorite Xmas colors. But do we get more green than red? Let’s see, Xmas trees are mainly green but Santa’s outfit is mainly red. Rudolph nose is red but…Dr. Seuss provides just the right blend of the two colors:http://i40.photobucket.com/albums/e202/Maoman/Grinch.jpg

Forget the Amero, the dollar will be replaced by the PONZI. The exchange rate for one PONZI will be somewhere betweenzero and 50 billion $ range….

Your new currency at least is frank (not franc)

booom!

Arena Football League (AFL) announced today that it would cancel its 2009 season citing “the current unprecedented economic climate.”

Potential Illinois Governor Floats Chris Kennedy For Barack Obama’s SeatChris Kennedy, President of commercial property realtor Merchandise Mart Properties, Inc., is the son of former Attorney General and New York Senator Robert F. Kennedy and nephew of current Massachusetts Senator Ted Kennedy.Why the Kennedy double play? Read more

Speaking of Ritholtz recently this on Roubini’s “Finance & Markets Monitor:“NYT: Don’t Forget Shumer’s Role in the Mess” by Barry Ritholtz | Dec. 15, 2008“Since the financial meltdown, people have been asking, ‘Where was Congress? Why didn’t they see this coming? Why didn’t they provide better oversight?’ And the answer for some, including Senator Schumer, is that they were actually too busy pursuing a deregulatory agenda. Their focus was on how we have to lighten up regulation on Wall Street.”-Barbara Roper, director of investor protection for the Consumer Federation of AmericaToday’s New York Times has a damning article linking Senator Chuck Schumer to many of the radical deregulatory policies that underlie much of the current crisis.I have assessed a lot of blame for the crisis on several people — Greenspan at the top of the list, followed by several others, including President Bush. Phil Gramm was a prime sponsor of all manners of ruinous legislation — which, I hasten to add, was signed into law by one President Clinton (he sure isn’t blameless in the mess).In the Senate, on the other side of the aisle from Gramm was Chuck Schumer. The votes and support noted by the NYT shows Schumer was not much better than Gramm:“But in building support, he has embraced the industry’s free-market, deregulatory agenda more than almost any other Democrat in Congress, even backing some measures now blamed for contributing to the financial crisis.Other lawmakers took the lead on efforts like deregulating the complicated financial instruments called derivatives, which are widely seen as catalysts to the crisis.But Mr. Schumer, a member of the Banking and Finance Committees, repeatedly took other steps to protect industry players from government oversight and tougher rules, a review of his record shows. Over the years, he has also helped save financial institutions billions of dollars in higher taxes or fees.He succeeded in limiting efforts to regulate credit-rating agencies, for example, sponsored legislation that cut fees paid by Wall Street firms to finance government oversight, pushed to allow banks to have lower capital reserves and called for the revision of regulations to make corporations’ balance sheets more transparent.”Schumer, nicknamed the jackhammer for his fund raiser technique, apparently drank deeply of the deregulatory Kool-Aid also.There’s a full table of the legislation he supported here: Schumer’s StandsSource: A Champion of Wall Street Reaps Benefits ERIC LIPTON and RAYMOND HERNANDEZ NYT, December 13, 2008 http://www.nytimes.com/2008/12/14/business/14schumer.htmlRelated: Schumer: Cut regulations, make NY more competitive (pdf) Schumer Letter to SEC regarding “Soft Dollars” (pdf) Schumer co-signer on letter regarding derivatives (pdf) Schumer to FDIC on Bank’s Capital Reserve Requirements (pdf) Schumer to SEC on Credit Rating Agencies (pdf) Schumer objecting to Proposed Auditing Rule (pdf)http://www.rgemonitor.com/financemarkets-monitor/254769/nyt_dont_forget_shumers_role_in_the_mess

Not good news for the future…From Floyd Norris:Over the last four years, since the buyback boom began, from the fourth quarter of 2004 through the third quarter of 2008, companies in the S&P 500 showedReported earnings: $2.42 trillionStock buybacks: $1.73 trillionDividends: $0.91 trillionso, this would imply that these guys spent every dime they made in profits on stock buybacks and dividends?http://norris.blogs.nytimes.com/2008/12/10/shareholder-value/

off topic — back in September I squirreled away a fair bit of currency – with travel plans looming and the banks still open we began depositing the currency back in the banks – let me tell you it was easier getting the currency out (and that wasn’t a cake walk) than it is putting it back in – one branch has a deposit limit of $5k – another branch took a larger sum but needed to see my original withdrawal slips + drivers license even though the manager knows me and was right there – my wife is going to make another deposit today but won’t go back to the one branch(after the third degree she was put through last week)- and we still have a safety deposit box full of fifties and hundreds –

OB :Will gladly provide my view of the material when I have completed it. Your initial take on what the book offers vs. what it does not – is accurate.That said, I don’t believe there is a solo perspective or solution to the multi-tiered/multi-dimensional “crisis” we are facing, and Prof. Victor’s thesis (or something like it) might be a component of focus as a starting point from which more clarity will prevail.Cheers …

LOOK AT THE PPT!!!

2:30 and the cash assult begins!! Shorts spanked again! You folks still think I am nuts? Dow green…

I send you back to my call hours ago of the $25 SSO test, we are knocking as I type ;^)

Wea re going to test $25 on the SSO, that will determine the close today. Break above, green, break below…Reply to this comment By CM on 2008-12-15 13:05:30

great call today – as is the case most days

New Thread

click on the “home corner above” then in the list of blogs in the right click on the Finance and Markets monitor. You will see a LONG list of bloggers. MA is the only one with first name Rich (the list is according to alphabetical first name)

As we all knew would happen. It is nice to see the guys who are supposed to be the experts come in line with our views.

Thanks.

Mitch,You have said exactly what I have been thinking and feeling as I have watched this charade over the last few weeks. Only someone who doesn’t have the background knowledge of what is the true motivation behind this “holier than thou” grandstanding.It’s hard to believe. It is more than past time when citizens need to educate themselves so they can hold our elected officials accountable for their failures.