“But the worst is still ahead of us. In the next few months, the macroeconomic news and earnings/profits reports from around the world will be much worse than expected, putting further downward pressure on prices of risky assets, because equity analysts are still deluding themselves that the economic contraction will be mild and short.”Concering bailouts:Does anyone knows some article explaining exactly what types of FED operations are being used, how this affects bank balances (asset/liabilities – specific account changes) and what are the maturities and amounts involved?Or is FED still hiding all details ?

It’s at 10:1 today.)

Here is a list of TARP recipients at propublica.org.

RALLY NEWS!10:00 a.m.U.S. December consumer confidence below 45.8 expected10:00 a.m.U.S. December consumer confidence 38 vs 44.7 in November10:00 a.m.U.S. December consumer confidence at record low

SSO about ready to break out! A gap above $25 means big rally this way headeth! Can’t have the dow finish worse than 1907!! That was the second worst year ever for stocks and we are a mere 1% above that level. PPT will not let it happen.

5…4…3…2…1…

nice call

From the prior days post, there were some people questioning the “Petraeus pick” as most influential…You are all entitled to your opinions, as am I. I have an acquaintance in the US military intelligence (whom is worthy of that moniker, as he is an extremely bright man), whom I have spoken about Petraeus at great length to. (I trust his opinions, and he has met the man.)In his words, Petraeus is a genius! He is not a guns blazing leader… but instead, comes from the Macarthur school of thought where, instead of kicking down doors, help build them. Talk with the people. Help them. That is how to win this “war”. His “surge” wasn’t about putting more troops on the ground that could shoot more guns. It was about “presence”, “support” and “aid”. It was about winning over people and their trust.We need his presence back in the US!!! Or at least the model that he represents, as we need to win back the faith of Americans and fight the corrupt and greedy excess. Don’t get me wrong… I’m not saying Petraeus would help our economy, but instead I’m saying he does seem to stand for what made this country great, and unlike other “leaders”, has been willing to “wear the uniform” and prove himself.As far as the many other “retired generals” during the Bush Admin… It’s my understanding that they many of them had received their title through political maneuvering, nepotism, and various other ways that left them severely UNDERQUALIFIED to lead, plan and carry out an ACTUAL WAR. They pretty much only knew the drop bombs and kick down doors method… which leaves you with an enemy that will look for vengeance. Many of these Generals were forced to retire… and some understood their shortcomings and knew enough to get out.As a huge fan of Nouriel, it’s hard for me to cast a vote against him…. but I begrudgingly agree on the Petraeus pick in a landslide!All the best,Miss America

Cerberus and Pimco win yet again on the GMAC bailout (FOMzi lives)http://www.portfolio.com/views/blogs/market-movers/2008/12/29/a-victory-for-gmac-holdouts?tid=true

All, I am working on my attitude at work trying to be grateful, but when I see this it makes it tough… I laid this book on the Trustee’s desk where I work. He did not read it, ignored it and now out of pride is not interested in a single thought i have on the economy and markets since he lost his ass… ayeI hope it was ok for me to drop Kindelberger’s name and book title here again and again a while back…Happy New Year!http://www.bloomberg.com/apps/news?pid=20601109&sid=a8KK_pGpxqL4&refer=homeMerrill’s Rosenberg Inspired by Farrell in Foreseeing CrashBy Carlos TorresDec. 30 (Bloomberg) — David Rosenberg drew on inspiration from market-rules theorist Robert Farrell and asset-bubble historian Charles Kindleberger to predict the economy’s demise this year….Kindleberger, the late economic historian who taught for 33 years at the Massachusetts Institute of Technology, is famed for his 1978 book “Manias, Panics and Crashes.” The work traced four centuries of boom-and-bust cycles, bringing to light a 17th century frenzy over Dutch tulips that sent investors offering land, houses, farm animals and gold in return for choice bulbs.

Wow Roubini is back to sounding more bearish all the time. I think even he sees that nothing the Fed or the Treasury or the world central banks can do will turn back the economic tsunami we face. Simply put, they cannot create capital, they can only create credit. However, credit and liquidity are not the problem. Solvency is. Or rather the definition of solvency. We allowed the definition of solvency to become that an entity had enough access to credit to satisfy cash flow. Therefore, many (most?) entities are not solvent when you look at a more traditional method of measuring it (say the balance sheet, for instance).Therefore, the continued application of bailouts aimed at increasing credit (like funding GMAC so they can ‘lend again’) will not work. Because the consumers they want to borrow are insolvent. And in fact, they have been insolvent for a very long time. They are insolvent, they are finally realizing it, and they will not be buying a car anytime soon. They realize that borrowing to buy a car is just about the last thing they would consider right now.This is why the deleveraging is and will continue to be so painful. Because, like frogs in a pot, we have reached a fatal boiling point, and we never even realized our jeopardy until way too late. No surprise NR is bearish, in my opinion.ex VRWC

It is likely worth checking in on Michael Pettis’ blog in the coming weeks – his current commentary points to some major articles that will soon be published. Everyone is working hard to increase global trade imbalances (mpettis.com December 30 commentary)

Stocks up 6% over the next 2 days in a PPT goose job to make the sheeple forget about the continual rape job being thrust upon them by the most corrupt leadership/business relationship in US history. I am goin glong lube!

Of course not, it’s insane.

Look on the bright side, The US government is investing your money in GM so how does it feel to be part owner in GM? See it’s not all bad. Oh and even better yet the list is growing day by day so I figure the windfall profits will mean early retirement and leisure for us all, even for those who don’t pay taxes.

New name for GM – Ben and Hank’s Auto BarnCome on over to Ben and Hank’s Auto Barn. Slow credit, no credit, no pulse, no problem.Come get your new car. Runs good.If Hank can’t get you financed, no one can.This is what we are reduced to, pimping car loans to bad borrowers with taxpayer dollars.I suggest we all stop by our local Ban and Hanks dealer. We should say: ‘Look Hank, I don’t want a car. I just stopped by to empty my pockets so you would have more to lend out’.ex VRWC

Dan: Just some thoughts. If I am right, you should see some immediate consequences in 2009. The USA is confronted by an immediate threat – the possibility of disintegration in Iraq and the idea that Iran and Iraq could become allies (or evolve to become one greater Shiite nation). Such a development is enormously threatening to America and the Saudi’s because of its implications on oil supplies. Every US president tackles those problems that he can solve … and leaves the unsolved crises to the next president. President Obama must decide how to deal with Iran. We will see that play out in the immediate future. But more generally, as American power subsides I expect new patterns of global behavior (incl. war) to play out over the next 5-10 years. Unfortunately, during that time period we will see past mistakes evolve into new threats. The wars in Iraq and Afghanistan have created an atmosphere of insecurity and terror. Possibly we will see newer and stronger terrorist groups in the future, and the use of nuclear, chemical or biological weapons becomes a likely possibility. Not all things are negative. An emergence of China as a growing power may cause a shift in the global balance (diifcult for America), but will add regional stability in its own way. I would like to hope that Pres. Obama will move the USA back to a “rule of law”, but he has very difficult circumstances to cope with. It may not be that simple.PeteCA

Great work, PeteCA. I’d like to comment on your 2nd and 4th paragraph.Fed actions this year basically transferred the garbage assets from the banks to the fed. Now the fed will transfer the problem to the treasury. As a result a crisis in the dollar is unavoidable, in my opinion.What’s next? I think defaults. Corporate defaults, municipal defaults, families in bankruptcy and foreclosure, countries defaulting, maybe even the US. These bad debts have to be worked through, the faster the better. Bush passed the buck to Obama, but the inevitable outcome is unavoidable. Wars too. The world is on a hair trigger. It will be a wonder if we make it throught the next 20 years, but isn’t it always

But hey, that was already priced in down in the 700′s…right?

“All we see are bailouts with money that does not exist. Nowhere do we see current (or future) administrations doing the really serious economic thinking that would put America back on its feet in a credible way.”Great synthesis, Pete.

Yes, but you are only a guest. Don’t you think you should have used your real name so everyone would know you are first?

If you do nothing, you can say nothing. If you allow it, you condone it…A former top executive at Merrill Lynch who received a $25 million golden parachute after just three months of work has purchased a $37 million Park Avenue palace.Peter Kraus, 55, paid the staggering sum for a five-bedroom co-op on New York’s posh Park Avenue after getting a $25 million buyout from Merrill Lynch when the company was sold to Bank of America in September, the New York Post reported.

PeteCA,It is with deep regret that I find myself in agreement with the predictions that you pose. There are few industries which the government influences more that Defense. At time of severe economic hardship, growing employment through expending defense projects is far more effective then creating a new industry such as green collar workers. Further, growing peace implies the need to employ soldiers returning home looking for a new path in life. Our economy can hardly absorb this influx of skilled, hard working individuals in its current state. The political and economic momentum is clearly with the war mongerers…unfortunately.

NEW YORK, May 5, 2008 — Merrill Lynch & Co., Inc. (NYSE: MER) today announced that Peter S. Kraus, 55, has been appointed executive vice president and a member of the firm’s Management Committee. Mr. Kraus will report to John A. Thain, chairman and CEO of Merrill Lynch. Mr. Kraus will be responsible for overseeing the firm’s business strategy and investments; global growth plans and opportunities, and corporate acquisitions. He will also lead initiatives to integrate the work of the corporate strategy and business development team with the efforts of the firm’s senior business leaders around the world to identify cross-platform synergies.”Peter Kraus will be a tremendous resource to me and the senior management team in identifying the best opportunities for growth and investment around the world,” said Mr.Thain. “Peter’s two decades of experience in the financial markets, including in investment banking, asset management, and private wealth management, will be a great asset to Merrill Lynch.”Most recently, Mr. Kraus was with Goldman Sachs Group Inc. for over 22 years where he was co-head of the Investment Management Division (IMD), and a member of the Management Committee. Mr. Kraus was also head of firmwide strategy and chairman of the Strategy Committee. Before joining IMD, Mr. Kraus was co-head of the Financial Institutions Group (FIG) until 2001.

Should be a “booming” year for arms dealers!

Roubini has been correct about the financial crisis facing the US and the world for more than a couple of years. He says that there will be no recovery in 2009. His reasoning is that deflation, or falling asset values will continue and monetary policy from the central banks has run to into the wall of zero interest rates (ZIRP) where they can do no more to stimulate. They have also run out of in house assets to throw into the mix. It will now be up to Congress and the Treasury to monetize debts or in plain English > Print Dollars or create them purely out of thin air.House prices fell 18% last year. The stock market fell about 40%. Retail sales are falling, oil and most commodities have fallen in price. Debt supporting all this has collapsed and is collapsing. This is a deflationary spiral downward. Money in the system or the value of the assets that is the basis for value in a fiat system is falling. All the money injected so far has been inadequate to prevent this from continuing.Roubini see us correcting the out of control system and getting it back on the road. I just can not see the mechanism the Keynesians are using being able to stop deflation in an extremely overly indebted system. My mind goes back to the charts I have seen about debt to GDP. We have almost twice the debt per GDP as we did in 1929. That crash caused the Great Depression. We had, on the books, almost twice that much and that doesn’t count all the other promises (agreed upon obligations).Roubini thinks that the FED and Treasury and the Obama crew will be able to successfully fight the deflationary cycle and stop it. I think that after 25 years of overly optimistic expectations for Boomer retirement, that the deflation from the last year and the deflation from next year will significantly reduce the speculative optimism of the Boomers and they will be selling, down sizing and saving. I think that pension funds all across the board will be forced to reduce their outlays due to their losses and that the banks who survive will have many fewer parties willing to borrow which will keep their profits and margins minimal. Retail sales will be poor and even if Obama gets a stimulus package right away, it isn’t likely to do anything for a while, while deflation continues. Besides his projection on jobs created is less than the jobs already lost. Not much of a stimulus IMO all the while states, counties and cities cut… And if you can create all these jobs with out income, why should anyone work, let’s just live off printed money for ever! But if you think this is possible, just look towards Zimbabwe or the past Weimar Republic for your answer.Roubini has been right but IMO has been very much on the careful side. He has had to expand his forecasts all along the way. He projects what he can see thru data but does not interpolate that into probabilities. What I am saying is that he didn’t predict deflation a year ago or even the extent of the losses or the current depth of the recession. He has been ahead of all his contemporaries or many of them but he is not saying depression. He is only predicting a deep recession lasting now 24 months. That doesn’t mean he won’t. His pattern has been to continually expand his forecasts as the data comes in to verify.Our job as investors or people just trying to stay ahead of or out of the way of these rapid changes is to interpolate into probabilities that we can use. Remember PROBABILITIES are no guarantees. They are best guesses. That means don’t marry a direction and put your money down and go away. The only thing constant is Change!I have read and thought a lot about Boomers and the psychology of economics. The Boomers will be a major influence on the US economy for another 20 years. The Keynesians think that they can control the markets by controlling the money supply via interest rates and fractional reserve requirements and such. I agree that under most circumstances the effect of pulling on this lever or pushing that button works. We are passing thru a very chaotic period, partially due to the Boomers.The system has been gaming the Boomers for the last 25 years. There was no way to make money in a savings account due to low interest rates and taxes for the last 20 years, Boomers had few choices on where to save for retirement. Some just gave up and didn’t’ try. Most tried and the main source was thru 401ks, SEPs and IRAs with others in government and corporate pension plans. These were mostly highly controlled by others (the financial industry), had high costs attached and were highly gamed by the system. This concentration of assets was directed at first into mutual funds. Then into the dot.com boom and then by the Madoffs and the Hedge funds. A lot of this money has gone into mal investments or eaten up by the managers. When transparency is again gained, Boomers are going to be really sad and then mad.. In the last years, Boomers were full participants in the housing boom as finally a chance to *make* some money for their retirement. This was also a monetary scam by the same financial industry that wasted away much of their retirement savings thru the equity market manipulations. Today over 40% of existing mortgages are underwater and by the end of 2009 it will be over 60%. Stocks are down 40% from their peaks too. Boomers will not be able to rely upon their homes or their stock portfolios for their retirement … This will affect their psychology going forward.Why do I think the Boomers are in trouble for retirement? Because IF you finally got transparency, the real value of our economy would be significantly smaller. Take out all the money from financial engineering and money changing and extraneous retail sales from a smaller economy and continued deflationary influences and the picture for them as a group looks bleak. The Boomers have been screwed blue and many will be forced to work until they drop, others will be homeless if they don’t have children to take care of them. Social Security? Medicare? Are extremely underfunded and their *surpluses* are not there. Been *borrowed* (off the books) and spent. So the gubbermint will just replace that with the printing press?If we don’t get transparency? I think things get worse faster as our economic system is based on faith, Faith you’ll do what you say and faith that the books are not Madoffed. The faith has been destroyed.This trust is a key element in the psychology going forward IMO. People who never cared about their retirement savings are now paying attention and are concerned with safety. This goes against the psychology of speculation. People believed that they could invest and have a guaranteed returns, whether it be in an IRA or a house. Both have lost their glitter in the last years and IF Roubini and I and etal are correct and deflation continues thru the next year plus, the psychology of guaranteed returns will vanish and speculation will diminish and so will the banking industry’s ability to make money from lending and then financially engineering the debts. Once faith is lost, it will take a really long time to be regained I think.The other scenario is that we eventually have high inflation rates as money is just printed to fill in all the gaps. I don’t think that anything they can do will be adequate to counter balance the collapsing debts. That is my best guess, an opinion. Maybe they can but it isn’t the right thing to do. If you don’t understand the implications you should. It is not good. Neither case is good. One leads to some form or real base and eventual revival. The other leads to Argentina or Zimbabwe or the Weimar Republic in the early 1920’s. Where money is based on nothing real. It is just paper. Can we just return to somewhere in the middle? Probably not.. Why? Think of the economic policy as a car swerving out of control on a crooked road. When the swings were small, it was somewhat easier to bring back under control but now that they have continued to push harder on the accelerator and spinning the wheels, the swings and corrections just kept getting bigger. Swing to the left, over correct, swing to the right, way over correct…. Can it be pulled out of the slide? Not with the drivers we have at the controls now. They have been madly swinging the wheel for years now and the car just gets more and more out of control as ZIRP and $4 trillion injected shows. So we either spin out or crash right or left. If we just spin out would be the best but that still means stopping and re-orienting ourselves and starting over (end of deflationary cycle). Crashing, or hyper inflation, would be the worse case but the most probable because those who rule are all of the same schools and re-enforce each other’s incorrect thinking. No one wants a correction. All they can see is steering and accelerating.So IMO deflation is the most likely scenario going forward for at least the next year but more likely two. It will go on until the debt based on mal investment and unrealistic expectations have been mostly wiped out, either by write downs or high inflation. By then the stimulus from Obama’s crew should be putting in a floor. This will be multi faceted in that interest rates will be higher and taxes lower for the middle class. Much depends upon what Obama spends the capital on and how much debt he is forced to take on. If he wastes it on digging holes and filling them back up, then the gains (bottom) will be temporary. If he pushes forward with real change in energy infrastructure and things like high speed rail to move people and products across this country with efficient speed then we may move back into a long road of gaining prosperity. But either way, I do not see printing money to support financial engineering and mal investment as positive. It must end sooner rather than later as the more debt, the longer it will take to regain prosperity. Someone has to pay. It is the law of physics and money. There are no perpetual motion machines.This doesn’t mean we still can’t have a hope rally for the first couple of months into 2009. If we do, be careful not to marry your positions. The future is the future and no one can read it but for the near term, holding cash appears to be the best bet unless you trade the possible rally with fairly tight stops.Have a Happy New Year’s eve and a safe and successful 2009.Best Regards and thanks to the Professor for providing this forum. It is by far my favorite reading each day.

Their are winners and losers. And you are a winner!

im not agree with some NR solutions or other varriant oflend-cheap-money-to-FED-good-friends orbuy-with-population-money-the-trash-of-FED-friends.Roubini knows the problem. In fact, read the excerpt below (long term consequences as you wrote):”The long-term consequences of the resulting surge in fiscal deficits are serious. If the deficits are monetized by central banks, inflation will follow the short-term deflationary pressures; if they are financed by debt, the long-term solvency of some governments may be at stake unless medium-term fiscal discipline is restored.”(Nouriel Roubini – Dec 16 Commentary)

http://www.investinginbonds.com/assets/files/Intro_to_Credit_Derivatives.pdf.THE J.P. MORGAN GUIDETO CREDIT DERIVATIVESWith Contributions from the RiskMetrics GroupPublished by..Credit Derivatives are continuing to enjoy major growth in the financial markets, aidedand abetted by sophisticated product development and the expansion of productapplications beyond price management to the strategic management of portfolio risk. AsBlythe Masters, global head of credit derivatives marketing at J.P. Morgan in New Yorkpoints out: “In bypassing barriers between different classes, maturities, rating categories,debt seniority levels and so on, credit derivatives are creating enormous opportunities toexploit and profit from associated discontinuities in the pricing of credit risk”.With such intense and rapid product development Risk Publications is delighted tointroduce the first Guide to Credit Derivatives, a joint project with J.P. Morgan, apioneer in the use of credit derivatives, with contributions from the RiskMetrics Group,a leading provider of risk management research, data, software, and education.The guide will be of great value to risk managers addressing portfolio concentration risk,issuers seeking to minimise the cost of liquidity in the debt capital markets and investorspursuing assets that offer attractive relative value..?..http://www.zealllc.com/2002/jpmgrows.htm..JPM Derivatives Monster Grows.Please note that the numbers in this quote are from the Q1 OCC report, and are far worse now as we noted above! As I mentioned in Monster, the doomed LTCM had an inverted derivatives pyramid of an estimated $1,250b supported by only $3b in owners’ capital for an extreme implied leverage ratio of 417 to 1. JPM’s implied derivatives-to-equity ratio was sitting at 712 to 1 at the end of Q3 2001, a staggering number beyond comprehension!.JP Morgan, Enron & Gold.http://www.fgmr.com/morgan-enron.htm.have today mailed the following letter to the Enforcement Division of the Securities & Exchange Commission. It’s about time that we learn the truth regarding JP Morgan Chase’s activity in the gold market, the full extent of its gold exposure, and whether it used gold loans to fund the so-called “disguised loans” that it arranged for Enron. Perhaps the SEC will help us learn the truth by investigating these matters and reporting the results..http://img293.imageshack.us/img293/8036/banksnb6.png.liquidity trap central?

When the budding retiree’s get spooked, all those no touch 401k’s will be redeemed at just the wrong time.

eco-minor… Do you read my blog?MA

p.s. The “end game” theory that I postulated a year and a half ago was named: My “soc-boom-K-owed” theory. I still find it catchy and appropriate.

The set up has begun for a massive run by the 2:00 ferries to close up 277 points today…

We cannot trust the safety of food made by Chinese companies, so now we’ll need to be wary of pharmaceutical products made by Chinese-owned drug companies.

http://en.wikipedia.org/wiki/The_Corporation.The Corporation.The film charts the development of the corporation as a legal entity from its origins as an institution chartered by governments to carry out specific public functions, to the rise of the vast modern institutions entitled to some of the legal rights of a person. One central theme of the documentary is an attempt to assess the “personality” of the corporate “person” by using diagnostic criteria from the DSM-IV; Robert Hare, a University of British Columbia Psychology Professor and FBI consultant, compares the profile of the modern, profit-driven corporation to that of a clinically-diagnosed psychopath. The film focuses mostly on corporations in North America, especially in the United States.

Well done Nouriel!

Dwarfing the Madoff Ponzi scheme, which in the end may turn out to be, at least in part, a scam to feign investment losses for purposes of ripping off insurance companies with invalid claims for fraud while bilking taxpayers out their hard-earned money with deceitful requests for government bailouts and tax breaks, is the Social Security Ponzi scheme. While the Madoff Ponzi scheme, so-called, may be measured in the tens of billions, the Social Security Ponzi scheme can be measured in the tens of trillions, making it a thousand times worse. The Social Security system is truly a Ponzi scheme in the classic sense, where the first contributors to the fund are paid benefits mainly out of the funds received from the contributions of later participants.The Social Security system we are familiar with was originally enacted in 1935 by an incredibly corrupt Congress (much like the current one), and signed into law by FDR, a corrupt and ardent Illuminist who did as he was told to do by his Illuminist Puppet Masters (principally John Rockefeller, Jr. and J P Morgan, Jr.). At that time, the Social Security system was known as the Old-Age, Survivors and Disability Insurance (OASDI) program. The OASDI was not implemented until 1937 due to Constitutional challenges, but suffice it to say, the Illuminist puppets in the Supreme Court of that day, who were every bit as corrupt as FDR and the Congress, made sure the Socialist agenda went forward.The Ponzi aspects of this Social Security scam were enhanced by one of the main conspirators in this scheme, the Federal Reserve. Shortly after the Social Security system was implemented in 1937, our central bank inflated our currency by increasing the supply of money and credit in order to boost prices and incomes and take us out of depression. This process accelerated in 1941 in order to fund the war effort as WWII got underway following the 911 event of that time, namely, the attack on Pearl Harbor, which our government knew was coming way before it happened, but then turned a blind eye to the upcoming attack so we could be dragged kicking and screaming into the next Illuminist war for profit. Incomes and prices rose as Americans went to work to power the war effort, thus causing incoming Social Security contributions to burgeon, while simultaneously debasing the value of the benefits being distributed, thus further enabling the Ponzi scheme to be perpetuated.Note how in 1933, just prior to the enactment of the OASDI in 1935, bankster-buddy FDR took us off the gold standard domestically, leaving only dollars and dollar-denominated accounts held by foreigners backed by gold. That meant we had a domestic fiat currency, which allowed the Fed to do as it pleased with the supply of money and credit in the US, and as you may have guessed, the Fed chose to increase the supply quite dramatically to fund WWII so the military-industrial complex could grow filthy rich. This tied in perfectly with the Social Security Ponzi scheme as we became an economic powerhouse in the aftermath of WWII, with a peak in the late 1960s, by filling the Social Security fund with fresh infusions of inflated cash to keep the Ponzi scheme going, while debasing the fixed benefits being paid out to retirees.Next came the Vietnam War, and more debt, especially to foreign nations, and more inflation from an increase in the supply of money and credit to fund the latest war for profit. This brought about the final debasement of our currency after the London Gold Pool failed to cap the price of gold, resulting in a bank holiday in Britain during the Johnson Administration. President Nixon, also an ardent Illuminist, at the request of his Puppet Masters, in order to stop the outflow of our national gold to foreigners due to war debt and to enhance the Fed’s ability to increase money and credit to fund Johnson’s Great Society welfare programs, took us completely off the gold standard in 1971. As a result, inflation went out of control as our currency became purely fiat in nature, with double-digit inflation peaking in the early 1980s. Once again, the resulting inflation furthered the Social Security Ponzi scheme, which was an integral part of Johnson’s Great Society program.In order to placate complaints about the effects of inflation on the purchasing power of benefits, which grew quite pronounced with the passage of time, an attempt was made to counteract the impact of inflation by providing for cost-of-living adjustments (COLA) based on official inflation rates. Not to be daunted, the elitists made sure that the Bureau of Lying (Labor) Statistics (BLS), which they totally control with their puppets at the BLS, put out greatly understated official inflation statistics, usually at one half to one third of actual inflation, a process known as hedonics, which they use to screw Social Security recipients out of their proper COLA increases. As you can see, Inflation is the best tool available to perpetuate the Social Security Ponzi scheme, by burgeoning incoming money at the full rate of inflation while benefits are increased by only a fraction of the actual rate of inflation. This has changed recently, because wages have stagnated, and this has put stupendous pressure on our already bankrupt Social Security system, a huge, gargantuan Ponzi scheme that is about to unravel.Make no mistake about it; this was an Illuminist scheme to impoverish the middle class, not to provide for people’s security. Ask Social Security recipients how many of them feel secure based on the miniscule benefits they are receiving. This was a Communistic spreading of wealth from the middle class to the poor, not from the wealthy to the poor, since FICA contributions have always been cut off at a level of income associated with the middle class, leaving the wealthy free of FICA liability on most of their income because Social Security benefits are capped, presumably making FICA deductions, above the designated maximum level of income, unfair. In the end, the poor are still poor, the middle class has now joined the ranks of the poor, and the wealthy are now fabulously wealthy, which results are characteristic of any Communistic or Fascistic form of governance. Between the Social Security system, the Income Tax system and the Federal Reserve System, they will spend, tax and inflate, respectively, the American sheople into oblivion.Their Communistic, Fascistic mantra has been: Give us your money and we will take care of you from the cradle to the grave. They will take care of you all right — in a Halliburton-built, slave-labor internment camp, complete with disinformation centers where they will brainwash your children to make them into good, quiet, dumb, cooperative sheople-serfs. This mantra has in fact been used to help fund all their plans for world government by extorting a myriad of taxes out of you, and one of the main taxes which has been used to fund their plans has been the Federal Insurance Contributions Act (FICA), which funds their Social Security Ponzi scheme, which, as a result, has actually become a Ponzi scheme within a Ponzi scheme.So how has our Social Security system become a Ponzi scheme within a Ponzi scheme? We’ll tell you how. Our reprobates and sociopaths in Congress have regularly, over many decades, overspent money to fund their pork projects and social welfare programs to win votes, and to grease the wheels of the Illuminist wars for profit which power the military-industrial complex. This has resulted in massive budgetary current account deficits.Adding to our woes are the trade deficits, which we have to fund by borrowing from foreign nations, thus increasing our national debt. These trade deficits have been caused by the gutting of our manufacturing sector through free trade, globalization, off-shoring, outsourcing, and both legal and illegal immigration. Illegal currency manipulations by exporting nations like China, Japan, Russia and EU nations have also contributed to the trade imbalance by giving these nations unfair trade advantages via debasement of their currencies, which makes their exports cheaper in our country, and which makes our exports more expensive in their countries. These nations also provide subsidies to their domestic industries, thus decreasing their cost of goods and increasing their bottom lines. All these currency manipulations and subsidies make a mockery out of the concept of free trade. We need fair trade, not free trade.And now we have trillions in bailout money being given to the so-called too-big-to-fail banks and transnational conglomerates to make sure that their executives keep getting their salaries, bonuses, dividends, stock options and golden parachutes while we get hyper-inflated into oblivion by throwing good money after bad.Now mind you, these are the same executives who, on orders from their Illuminist masters, have burned their once prosperous companies to the ground to screw non-insider shareholders and bondholders, to bust unions, to ship our good-paying jobs and our once huge manufacturing infrastructure overseas where they can take advantage of slave labor, to repudiate their obligations under pension plans, to cut off employee benefits, to hamstring our economy, to consolidate with and to eliminate their competition and to ultimately become nationalized by our government to form a fascist police state while we undergo hyper-stagflation, recession and then depression from the deleterious effects of all the bailout money being bandied about like booze at a wild party.What has happened to our once dynamic auto industry is a perfect example of this intentional waylaying of some of our major corporations in the manufacturing sector while the insolvency of our major investment banks, commercial banks and insurance companies are a perfect example of this procedure in the financial sector. The ultimate objective behind this intentional decimation of our leading companies and destruction of our economy is to bring us to our knees so we will accept a corporatist, fascist, feudal, Orwellian police state in lieu of our Constitutional republic.Due to all these deficits and psychotic overspending on moronic bailouts, in order to help plug the gaps, our morons and village idiots in Congress invade the Social Security reserves, handing back a worthless IOU that will never be repaid. So they are using current Social Security benefits to fund both current and past deficits in the general budget, thus creating a Ponzi scheme within a Ponzi scheme. They have promised you security in return for the tax contributions they have extorted from you to help fund your retirement and the retirements of others in the system, and have then turned around and spent your hard-earned money on their projects to implement world government, leaving the Social Security fund totally bankrupt. So not only are they robbing Peter to pay Paul, they are using the funds robbed from Peter to pay Judas as well.Now let’s examine why the Social Security Ponzi scheme is about to unravel. The first reason is the use of Social Security reserves to help fund the general budget, which by and large is used to fund the Illuminist scheme for world government. This money will never be repaid. Where could such gargantuan repayments possibly come from, the printing press? Well, if that’s the plan, get ready for a reenactment of the Weimar Republic, or if you prefer, put on your Mugabe costume and get ready to have a Zimbabwe experience you’ll never forget. This bankrupting of the system has been intentional. The old and poor are now at the mercy of the Illuminati, while the rest of us slave away to keep our heads above water and to keep the Social Security Ponzi system from collapsing and impoverishing our parents.The next reason is that the Social Security system is not just a pension system; it is an insurance and social welfare system, meaning that benefits are often payable to those who have contributed little or nothing to the system. This is a thinly disguised form of Communism. You are supposed to reap what you sow. They should have had segregated accounts, and let voluntary contributions to charitable organizations, churches and hospitals take care of the poor and the sick as was done in the past. Without taxes dragging us down, we could all take care of the poor quite well, thank you. Instead, we now have an ingrained welfare mentality in a large cross section of our population. Fraud and abuse is out of control.Another reason is the population control agenda, spearheaded by Planned Parenthood and people like Commie Comrade Obama. Thanks to their efforts, we now have a stagnant population that can no longer keep the Social Security Ponzi scheme going. Soon there will not be enough new participants to contribute sufficient funds to pay current entitlements of the soon-to-retire Baby-Boomers, much less to fund future entitlements as well.Also, as you might expect, Big Pharma and Big Medicine have gotten their digs in on the huge pot of extorted taxpayer money in the Social Security fund. Doctor, hospital and prescription drug programs are spiraling out of control as healthcare costs push into the ozone. The government is too loose with our money, unlike private insurers, who try to contain costs. Our government is too busy flooding Big Pharma and Big Medicine with tons of cash as payola for the big campaign contributions they make via their powerful lobbies. Many in our government have sat on the boards of Big Pharma companies. And of course, our allopathic system of medicine is not meant to heal people but to treat their symptoms, keeping them alive and very sick so they continue to make office visits and buy tons of drugs which often hurt more than they help, necessitating the need for ever more drugs to fight the side effects. People need to lose weight, get exercise and take supplements. That would solve at least half of all the outstanding medical problems in society today and reduce Social Security medical, hospital and prescription pay-outs by hundreds of billions each year. But of course we couldn’t have that. That would be too easy and make too much sense, and it would drain money away from these allopathic parasites.We already mentioned the fact that wages have stagnated, not even keeping up with official inflation, and that has put a crimp in the Ponzi scheme by preventing contributions from increasing at a rate faster than the rate at which benefit pay-outs are being increased by COLA adjustments. This is a huge problem.Last, but not least is the destruction of our economy. Unemployed people contribute little in the way of FICA taxes. And as more and more become unemployed, FICA contributions will diminish at frightening rates. You are about to see one out of every three Americans recently unemployed, unemployed long term and no longer looking for work, or only partly employed in part-time positions. And as businesses go under and their employees hit the unemployment lines, their matching contributions to FICA will diminish as well, giving the Social Security Ponzi fund a double whammy. Just imagine FICA tax contributions being cut by a third from where they are now. The government does not even have enough money to keep Social Security going for more than a few years as it is. What will happen when contributions are cut by a third? We shudder to think.Based on all the above, all we can say is don’t retire, and buy as much gold and silver as you can afford and lay your hands on after getting out of debt, buying freeze-dried food, purchasing a water filter and obtaining a weapon for self-defense. IS ANYONE AS OUTRAGED AS WE ARE ABOUT THIS SOCIAL SECURITY PONZI SCHEME?! Look at all the hubris about the Madoff scandal, and we have a Ponzi scheme greater by three orders of magnitude that is about to unravel while everyone goes ho-hum. It is nothing less than surreal.You have to love some of life’s coincidences. It certainly looks like Mr. Madoff had the perfect name, as he “made-off” with everyone’s money. You just can’t make this stuff up.http://theinternationalforecaster.com/International_Forecaster_Weekly/A_Ponzi_Scheme_Within_A_Ponzi_Schme

no, where is it?

5 star post! Please re-post it periodically1! I wonder if a minimum 5% to maximum 10% (depending on inflation) guaranteed interest on SAVINGS would have eliminated or at least greatly reduced the unprecedented risk taking and excessive leveraging that has precipated this financial melt down? Could this also be a solution to creating a more sane, safer system?

waaiittt forrr ittt, waaaaiitt, waaaiiiitttt here com da cash boys/girls!!!

5…4…3…2…1…BOOOOOM!

Looks like we run to 1020 on the S&P before Jan 20…Just a hunch…

maybe at the wrong time for some but could be the right time for them..I know what you are thinking, they will be exiting as we bottom. That could be but for many it won’t be a choice.Then again, timing is everything. If we follow other major declines in the market, there should be a significant bounce before it goes down again, like tech in 2000 and the Dow in 1930 or the Nikkei in 1990. These are watershed events happening I think and life is going to be different no matter what.

….and in a world that’s gone insane, they call ME mad?

Although not a Ponzi scheme, this is yet another kind of scheme:Holocaust ‘greatest’ love story a hoax(CNN) — Oprah Winfrey once dubbed it the “greatest love story” she had ever heard: a boy held at a Nazi concentration camp during World War II and a girl on the outside who tossed him apples to keep him alive. They eventually married and grew old together.It turns out the story of Herman and Roma Rosenblat isn’t true.The two had told their love story for years and years, inspiring a book deal, an upcoming movie, and stories across the globe on television, in papers and on the Internet. A children’s book, “Angel Girl,” was also based on their love story.When the couple appeared on “The Oprah Winfrey Show” more than a decade ago, the famed host called it “the single greatest love story in 22 years of doing this show.”http://www.cnn.com/2008/US/12/30/holocaust.hoax.love.story/index.html

nice call CM

4:36 p.m.[FNM] Fed MBS purchase program separate from Treasury program4:35 p.m.[FNM] Fed to buy MBS by creating additional bank reserves4:34 p.m.[FNM] Fed to buy MBS from Fannie Mae, Freddie Mac, Ginnie Mae4:33 p.m.[FNM] Fed to start buying mortgage-backed securities in January

Hello Anon Ibid,I hear ya… Remember, I have never met the man, so I’m going off of a valued opinion.At the same time, as far as economists go, Nouriel was not the only voice. He did not create the bear mentality or naysaying.In the grand concept of “ranking” and individual, I find that if Petraeus’s actions saved 1 life (US or Iraqi) then he warrants the kudos. I believe it’s likely that even if Petraeus did not create this methodoligy… his influence and implementation have likely saved MANY lives… thus, I still say: Landslide.MA

and the yield on the ten year will soon take a one handle -http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtmlTBT / PST seemed too easy -

Everyone should be worried about their 401K’s, given that the dollar could fall dramatically this year, perhaps to 60 or lower on the USD index. I, for one, believe the first order of business is to get out of US dollar and into a more secure currency or into precious metals. This can be done with currency ETFs and or PM ETFs which are permissable 401K investments as I understand. Just my humble opinion, not investment advice. Indeed, I should mention that I read someone the other day who thinks the dollar will go to 92 in 2009. So do your own due diligence.By the way, what a scam the 401K turned out to be as a replacement for the defined benefit pension! Naturally it was promoted by Republicans.

It’s more likely that my grandmother will fly rather than Gold reaching 5kGold is dead and Dow will be at 30k in 2015But first it has to be renamed to Down Jones

jb,i see the pattern, it’s the rational part that escapes recognition.? the market has de-coupled from the consumer / real economy? is that it? then, to what has it become coupled?

Please try this link as it should open up the article directly

Given that many economists expect an 1-2 year period of deflation, how quickly could a transition to all out inflation or even hyperinflation occur? Hours,days,weeks?Would such a scenario be preceded (triggered) by a frenzy of buying up of hard assets by banks while their dollars still hold value? Once all the money has been emptied out of the banks’ reserves to make these purchases, wouldn’t the world suddenly be flooded with money?What about the bond markets? How much/how fast could 100s of billions or even trillions of dollars dissolve?Any historic precedents that might suggest a time table?

g,welcome back. what he said.

Part of me is tempted to withdraw from the economy all together and go underground. Pull my cash out of the banks and find a way to make a living on the black market. But how? Any ideas on a good underground economy to tap into are greatly appreciated. I’ve played it straight and narrow all of my life. It is obvious now that the spoils go to those who game the system.I no longer wish to support the biggest Ponzi scheme in history. Screw this economy and the bastards pulling the levers. Its all a scam, and it has been for a long time.

one third of today’s volume was in the final 20 minutes -

Do you think we could get Henry Winkler to play Ben Bernanke in the “made for TV’ movie?

Mr. Pete,While I agree with most of your synthesizing IMO your timeline is much too elongated. The fact is is that the acceleration of the inevitable breakdown of ALL major global power economies will happen quicker than most anticipate. The premise of a major global power war is now GUARANTEED. It is not a matter of if it is now a matter of imminent when. The military-industrial complex will endeavor to employ hundreds of thousands as it did during WWII. It will NOT allow Obama to divert remaining the majority of ‘discretionary’ (sic) funds to infrastructure.We are about to undertake entering into the TRUE start of WWIII my friends. It will no doubt involve the cooperation of China, Russia, and Iran, against the U.S., Britain, and of course, Israel. China and Russia as we write all this have ALREADY plans in place to assert their domination over petro resources in the Middle East through their pawn which is Iran. Iran will instigate the first move on the board. We will then follow along with Israel with the second move. The third move will be an amassing of ground forces from both sides. The nuclear option will not come into effect until ground forces have been decimated sufficiently on both sides that it leaves it as the ONLY remaining option to ensure continued survival.It is inevitable. Plan accordingly. And if you’re under the age of 62 and male you will be called upon to serve your country in some form or capacity as was done during WWII as well as it was with females. There is really no escaping this momentum now. History does repeat itself and we all honestly knew it was coming sooner rather than later.The party is over.DM

This is part of the reason for the decoupling from the real economy mentioned earlier.

Legitimate approaches: People always need food, water and electricity (or heating oil). Very likely there will be little investment money in the USA in the future to fund improvements in these basic services. So whoever controls them, or their distribution, will occupy a key place in the local economy. You could, for example, buy into a water company in some local area where water is relatively scarce. You could also set up some sort of local food co-op in an area that’s not well-shopped. People are getting poor, and good quality food at low prices will be a really essential business. OR you could start some sort of education service. Young Americans are not going to be able to afford to go to college in great numbers. So they will need training for various occupations and businesses (e.g. mechanics, plumbers, electricians). Some sort of cheaper vocational training will also be in great demand.Less legitimate: Well, many US states will be forced to cut services and hike taxes. Very likely, state taxes on gasoline, alcohol, tobacco, and luxury items will probably see sizable increases. In the past this has created a thriving black market for people who transport these items across state lines. I’m not telling you to violate any laws. But it probably will happen.

Pete,If we are really heading down the the path of unbrindled monetary expansion, it will only be a matter of time when hyperinflation rears its ever so ugly head. In no point of history (with the exception of Japan with its massive savings) has monetary expansion not lead to hyperinflation. In the case of an overlevered economy like the US, it will actually happen a lot quicker, especially if the US$ decides to take a 30-40% depreciation. We will see that investment in ANYTHING will be pointless in terms of USD because there is no way to predict what the return of the investment can be. Zimbabwe and Weimar Germany are cases in point. The situation is worsened by the status of the USD as the reserve currency and the trade settlement currency. There will be a move from USD pegged currencies away from the USD as inflation in America surges. And to add fuel to the proverbial fire, countries WILL stop accepting USD for settlement of trade. There is no point accepting a currency that cannot hold its value. We are about to see a major and painful shift in paradigm and modus operandi in the world economy. I only hope it will not lead to military conflict (hope but in reality, it probably will).I hate being so negative but I see no way out of this problem. We are heading towards a seismic shift of epic proportions and I hope the rest of the world is ready for it.

g,so the fed/banks are using the market as a stop gap utility to reflate the banks.that is the attempt, in part. to cover bad bets on mbs, derivatives, etc..

I’m curious too, Hubbs.

IMO, this news (also posted above), which actually came out after the closing bell, is what made the market go up today, not the GMAC bailout.Who are the people who get access to this privileged information and how do they get it?I was so naive at 19, when I first came to the US 30 years ago to attend college that I actually believed there was a lot less corruption here than everywhere else in the world:-)By Craig Torres and Jody ShennDec. 30 (Bloomberg) — The Federal Reserve chose BlackRock Inc., Goldman Sachs Asset Management, Pacific Investment Management Co. and Wellington Management Co. to manage a $500 billion purchase of mortgage-backed securities it plans to complete by June.http://www.bloomberg.com/apps/news?pid=20601087&sid=a160y41WSJvk&refer=home

I nibbled a bit into bonds today: 5% each into TIAACREF bond and TIPs accounts. Also, I bought SPY 88 Feb’09 calls and puts (0.3% each) seeking to profit from a significant move from current levels, either up or down, by February 21. Actually, I believe the most likely outcome is that we don’t see a big move in which case I will gladly loose the option premia.

wow. funny timing, just before that Bush and Dick are leaving office.

Despite what naysayers might think, I am also confident you are first. Well done.

If the FED continues to act alone in throwing billions of our money into corporations or programs without congressional approval, I’m renaming it the Fanatical Elitist Dictatorship!

401k contributions – happens a day earlier in December.

Several generations ago it was common for people to have large families for more than just lack of birth control. Children meant old age security, and children were taught to take care of their parents and were honored in doing so. Blame society, blame ourselves, but we all need to look in a mirror and ask how we, as individuals and parents, contributed to this attitude shift.

你班儍西,日日夜夜講股災,美國都唔知幾能好!任印銀纸,屌西唔駛錢,食飯有人找數.

Well Folks: What is it going to be??WORLD WAR #3 or BRETTON WOODS #3 Anyone care to bet ????WILL SANETY ACTUALLY WIN OUT !!!!!

Maybe that’s the plan…Hmmmmmmmm…

Grow Marijuana! Always in demand, great ROI! Local markets all strong! Cash business!http://www.youtube.com/watch?v=G9YFlmmRenY

Far be it from me to try to discourage anyone from finding hope in this dark age, Miss America. If Petraeus is your hero, so be it.And it’s true that Nouriel was far from the only cautionary voice. I think, however, that he was the only one who saw the full sweep of the crisis, that although it had originated as a housing bubble, it would hit areas that no one suspected were linked. Even though I believed him on the main thrust of his predictions, I thought he was too early on the call on the date of the recession (he wasn’t) and too sweeping in predicting linkages in the countries that have large reserves and therefore could fall back on internal demand (while this could have played out differently, in practice, he was right).So, a serving of heroes all around. Except in Washington and Sacramento, where they need dunce caps and slaps.

Miss America, please look outside the military for advice about Military personnel. I have also known many military men but most if not all are blinded by their affiliation.The US military has failed miserably in Iraq. The surge only succeeded because the Shia defeated the Sunni in Iraq’s civil war. If you want to use the Anbar example then that only succeeded because Al Qaida operatives overplayed their hand. The Sunni Iraqis wanted them out of town and used the America’s as a means to this end. The US will leave Iraq in disgrace.You may choose to keep your blinders.

Noticeable vacancies in shopping malls in N. Illinois. The resale shops are crowded and prices are higher at Goodwill & the Salvation Army. No lines at the upscale grocery stores, but the Aldi’s stores are quite a lot busier. This , I’d say, means that people are adjusting to diminished expectations. I suspect the longer folks are living down the better they’ll like it. Cheap is the way to go at all times, especially when the economy is roaring along. You’ll save more money.

the last made in USAENOUGH is ENOUGHafter laying off about 40 of my employees in 3 years time when is our country going to realize the biggest mistake they ever made when they started sending all the manufacturing to overseas ^BIG MISTAKE^I am so dissapointedjewelery manufacturer in NYC

sometimes i get the most interestinge mail. messy new world disorder..?shizzly:look into the cauldron:http://www.youtube.com/watch?v=4bKwH3kJew4if you so desire.pizzle-T.ps. please to meet you, won’t you guess my name?but what’s puzzling you is the nature of my game.pps. never mind, music by flipper..notice the cut at time 1:54. “…everybody else” (to learn their limits.).the grand folly beat of the armchair emperors. as children theylearned to enjoy playing with other peoples lives.message. mess people up enough and then you can get them to reachyour conclusions.? and then they wonder why it isn’t sustainable. is that whatthey teach at yale?

Petraeus took on a paradigm and changed it.That is Leadership – something that has been sorely lacking at the top levels of US gov’t. He did it with a combination of actions, words, and reason. If someone can change a paradigm in the military, that person deserves a very, very public “at a boy”.Let’s hope that Obama has a number of Petraeus- like folks in his inner circle who can make the changes we all know the US needs, and maybe some changes that none of us know that the US needs but really do.

Included under the heading “market garden”. The drawback is that I would probably be paranoid about getting caught.I submit that the world would be a happier place if herb was legal and available.

yes, i also remember seeing a tv report on that captain who rallied support among sunni elders in Anbar .It was a last ditch effort that worked. I guess a little more respect than they were receiving from Al Qaeda was just the ticket. Thank god.

India – PakistanThe whole mideast – it might as well be a free-for-all.China – Taiwan?Look at 1870′s and WW1 for analogs.

Excellent book.

Falling here in MN.

yes saw him this morning on cnbc. he said the final risk was a price overshoot to the downside. as always, location is key- imo tracts in the hinterlands not so good for some years yet, closer in stabilizing after quite a haircut.

Since the last word in this comment didn’t happen, I argue that the first two didn’t either.

hate to tell you but the reality is much tougher than the dream. Everything cost more in my rural area. Phone, Internet, food, gas, just about everything cost much more and wages are half what they are in metro areas or less. And you need many more things to survive, like well pumps and septic systems and garden fencing and …… shovels and picks and ….. post hole diggers, roto tiller, chain saw ….. lots of tools and many things you don’t even think about living in a city.I’ve been here 35 years and I still haven’t gotten the self-sufficiency down to a point where my wife and I don’t have to work off the place most of the time. Well my wife works more than I do these days. The engineer said the solar system I want will cost $27k and that won’t supply even 1/3 the power I use. But I will have water, Internet and some lights in worst case scenario.Dreams are nice but in most cases, reality is much different.Just the knowledge base for rural living is different.I’m not saying not to do it, but be aware and ready for a difficult first few years of change.

dr. strangelove indeed!”Mein Führer! I can walk! “

Calendar and clock say it’s the last day of the year now. 2009 is coming at us at the rate of 1 second per second. Passengers will please return your tray tables to the upright locked position, and fasten your seatbelts.Another Year – A Biography Of My Spiritanother year of rockets launchinganother year of bombs raininganother year of madnessanother year of landmine amputees, pre and post pubescentanother year of fantastically overpaid and underpaidanother year of struggle of all against allanother year of grab all you cananother million girls sold into sexual slaveryanother million blinded for lack of vitamin Aanother year of being trampled by everyone above and trampling all those belowanother year of stupidityanother year of human intelligence as useful as stupidityjudging by resultsanother year of pride in our achievementsanother year without fairpayanother year of torture, oppression, secret police, kidnappings, disappearingsanother year of confidence that things are pretty much as they must beanother year of confidence that things are pretty much as they should beanother year of genocides, assassinations, mercenaries, terrorists,and pardonsanother year of toxic spills, lethal products, death of millions from simple lack of a clean glass of water to drinkanother year without shame or sorrowanother year of waste of buildings, people, talents, possibilitiesanother year with pay ranging from a million times to one thousandth of fairpayanother year of war, crime, disturbance, crises, depressions, triads, and cabalsanother year of nonearners taking over 90% of earningsanother year of billions with trillions starving 50 million to deathanother year when every family in the world working average hard is creating US$200,000 of wealthanother year without taking out of the social pool of wealth as much as you put inanother year of glossy magazine gossip about the rich and famousanother year of action, horror, drama, sci-fi, thriller, war, comedy – children’s dvdsanother year of government by mafiasanother year of between a tenth and a thousandth of fairpay for 90% of familiesanother year of riots, protests, massacresanother year of giants of overpay and overpower trampling lives, peace, safety, justice and democracyanother year of pulling leavesanother year of hope fatigueanother year of the human chimpanzee not knowing the connection of justice and happinessanother year in which there exists US$1 million in income per starving personanother year of acting like everything is fineanother year of anxieties, money worries, job worries, corporate infighting, dangerous streetsanother year of stress, mental breakdown, troubles, abusesanother year of pyramids, schemes, and financial destructionanother year of ostrichismanother year of vendetta-endless-revenginganother year of not knowing that the golden rule is good senseanother year of hurting and being hurtanother year of tyrants driving their millions of slaves to waranother year of thinking the superoverpaid are greatanother year of not knowing that no one can contribute to the social pool of wealth more than twice the average of 50 hours a weekanother year of bullets and tanks and depleted uraniumanother year of everyone in agreement that taxing the income of 99% of the people 99% would lead to extreme disturbance and endless problemsanother year of everyone not knowing that 90% of people are taxed between 90% and 99.9%another year of silence on this super-glaring point from all our most honoured thinkersanother year of humans sharing 98.4% of the genes of chimpanzeesanother year of perfect commitment to ‘everything I get is mine’another year of super-scarcity when there is plenty for allanother year of stealing from workers by threat of unemploymentanother year of vast horrendous unnecessary suffering for overpaid and underpaidanother year in which all have a birthright to US$200,000 a year per family working average hard, to 10 acres of arable land per family, and to 1/nth of all the natural wealth of the world per person, where n is the human populationanother year in which overpay has robbed everyone – overpaid and underpaid – of peace, safety, wealth, and happinessanother year of wealth ceaselessly drifting from underpaid to overpaidanother year in which the 1% overpaid take over 90% of wealthanother year in which the 99% underpaid do not campaign for fairpay, peace and happinessanother year in which the 1% overpaid do not campaign for fairpay, peace and happinessanother year in which 90% of human talent and brains are wasted by gross underpayanother year in which population is uncontrollable because of underpay another year in which environmental degradation is uncontrollable because of overpoweranother year in which topsoil is being lost at the rate of 100% per 100 yearsanother year when the economy is deprived of the spending power of 90% of peopleanother year in which war and weaponry increaseanother year of revel in our achievements, our technology, our erect buildings, our advances in scienceanother year in which the weaponry can destroy all planet life 60 times overanother year in which humans are unalarmedanother year in which this mother of all messages will not spread like wildfireanother year when people will wish each other a happy new yearanother year when people will say that money is unimportantanother year when people will work for money every day and nightanother year in which people will have confused and inadequate ideas another year in which people will slight realismanother year in which people will not respond to realityanother year when people will treat themselves at Christmasanother year when people will shoot the messengeranother year when people will punish the teachers of happinessanother year in which people will think they are awake and at peaceanother year in which people will think they can have democracy without the people taking responsibilityanother year in which we will be as far as possible from liberty, equality and fraternityanother year in which people will be valued in proportion to their assetsanother year in which people will not know injustice is theftanother year in which people will not know theft is dangerousanother year in which people will not know that ‘everything I get is mine’, is theftanother year in which people will not know that unlimited power is unlimited sadismanother year in which people will not know that they are being taxed by inflationanother year in which people will not know that they are giving tens of $thousands to the overpaidanother year in which 99% will not know they would be richer with fairpayanother year in which 100% will not know they would be infinitely better off with fairpayanother year when people will not know that none of the inherited reasons for higher than average pay per hour – business risk, responsibility, brains, talent, skill, experience – are soundanother year in which people will not know that siding with higher pay for business risk, responsibility, brains, talent, skill, experience, will make 100% of them infinitely poorer in happinessanother year in which people will not know that every transaction causes a shift of wealth from earners to nonearnersanother year in which people, despite knowing that the rich get richer and the poor get poorer, and that this is not because of the rich working harder and harder and the poor working less and less, do not know that this is unjust, and that this injustice has turned the human world into a whirlwind of sufferinganother year when people will not know that society needs, as the mother of all needs, counterbalances to the ceaseless drift of wealth to the overpaidanother year when people will not cotton onto the survival importance of limiting overpay and underpayanother year in which people will think that pay from a million times to 1000th the average must somehow be rightanother year in which people will not know that our greater intelligence has made us vastly more suffering than the other animalsanother year in which we will lack the intelligence to be masters of moneyanother year in which everyone will successfully resist the impression of this messageanother year in which the most overpaid will take out a million hours’ work for every one he puts into the social pool of wealth created by workanother year in which just 6000 being overpaid up to a million times the fairpay would take all the earnings off the 3 billion workers, and we are within 10% of thatanother year in which housewives and students will not be paidanother year in which housewives and students could and should be paidanother year in which genuine workers will have been elbowed out by the more aggressive and moneyhungry in all overpaid jobs, ruining the quality of work in those jobsanother year in which humans will wallow in maximal injustice and call it peace and happinessanother year in which no one will show me I am wrong and no one will say I am rightanother year of viagra commercialsanother yearanother yearanother yearanother year

due lei no mould height

another year of very long, very negative posts?

no i did not get mail. i will love hearing from you. tacschroeder@aol.com

Great perspective. Congratulations on understanding/appreciating the meaning of life.

yeah, those 50 million actual persons actually being continued to starve just don’t know and appreciate the meaning of life, eh?

another year of very long, very negative real real reality, but of course you should continue to show more concern about the length of Mom’s post. now THAT is a horrible thing that deserves to get you upset.

I once wanted to be a philosopher, but the actual condition of the world caused me to become a hard-nosed realist, instead.It’s an uncrowded field of endeavor.

Do we have an early close today?

Treasury Has Pledged More Rescue Funds Than AuthorizedBy MICHAEL R. CRITTENDENWASHINGTON — The Treasury Department has committed nearly $10 billion more than the $350 billion Congress has authorized to date for the financial-sector rescue package, which could constrain how the incoming Obama administration deploys the rest of the fund.http://online.wsj.com/article/SB123068292824744097.html

(I am glad you asked because I was thinking 1pm and was not going to check — also S&P gets rebalanced today)December 31, 2008 – US equity markets will follow regular trading hours. US fixed income trading will close at 2:00 PM EST. January 1, 2009 – All markets are closed.

Looks like a full day on the NYSE:http://www.nyse.com/about/newsevents/1176373643795.htmlSWK

Yeah, I saw that, too. Good trick. Don’t know why I thought Henry Paulson could add numbers…SWK

I believe this was in response to China and others pulling back on Fannie and Freddie investments.

thanks!

You far left socialist hippie! You guys always want something for free, the truth is very expensive and way out of your reach the sooner you realize this the better off you’ll be.

g,i take that as a joke. No? if not, perhaps you could tell me how much you charge for the “truth”. or how much you payed for that which you refer to as “truth”. also, how did you manage to achieve your exalted position of gate-keeper of “truth”. perhaps you work at the fed. the same fed that is endowed by it’s creator with life..liberty ..and leap seconds.but.. i think you were joking.happy new year.

Yeah, I know. If I were writing 25 years ago, I would have been heavy on sex. Whadaya gonna do.

Congratulations on getting married this year, Danielgk! Marriage can be challenging, but richly rewarding, too. Financial storms always pass eventually, and the sun returns, and life goes on. Best wishes for a Very Happy New Year to you and your spouse!SWK

The Democrats have been like the Washington Generals to the Republican’s Globe Trotters for years.

just wrote to painter, and am sharing it here. Surprise!Hi ya, painter!Can’t write too much right now, but sure glad to get connected with you. Don’t be worried that by getting onboard the pay-justice train you’ll be commiting a lot of time to it. You can devote all the time you want to, but not much is required. The world can be saved if enough of us spend a few minutes a day, or maybe a couple hours a week or month, learning and passing along the principles of pay justice to family, friends, acquaintances. This is a word-of-mouth campaign for very good reason – a word of mouth campaign, because of the lack of any central organization, cannot be targeted, co-opted, subverted and undermined by “the powers that be”.And please know there is nothing to buy or sell ever, no leader to follow, nothing to join, no dues, no meetings to attend, no religion and no anti-religion in this plan. there is no cost but the time to read and learn and pass the thinking along if you agree with it. no force whatever, no coersion, no new isms and ologies to learn – we’re really just marrying the capitalism everyone knows to justice – because capitalism is a good workhorse for humanity, being worked very badly. Capitalism is too powerful a weapon to be left in the hands of the capitalists! My positions sound socialist to people, but I am not pushing socialism because i don’t see how socialism puts the wealth people produce back in the hands of the earners where it belongs. there is a difference between “soft socialism” and the hard variety, so it can be said my plan is in great accord with what “soft-socialists” do want, and i have no beef with socialists and communists except that their plans wind up creating big, inefficient bureaucracy via centrally-planned economies. The money people earn goes into the hands of The State, and the question is never “what” is The State, what *form* is The State, the question is always WHO is The State. We can do better. “My” plan really does have no downside for anybody – the trouble is that the ideas come hard up against the very most cherished mistakes in thinking this species has, ideas accepted without testing the ideas for soundness for a very long time.I’ve met a lady who published books for 40 years, and she was in my face 4 times to say “you HAVE to get the book done and published!” Once it’s finished, it will be a full explanation of the plan, and will be a handy guide for you. i do not expect you to start passing along the plan until i get you the book so you’ll have ALL the “arguments” you’ll need, all the information you’ll need. At that point, you can just refer to the book when people ask questions. The book will be your thinking, too, if you agree with the ideas, so you’ll be able to take it verbatim and call the words your own – you won’t have to struggle to write up the ideas in another way.painter, the tremendous eloquence in “my” writings belongs to my teacher – who is too brilliant for this world, if you ask me. MY only genius is RECOGNIZING genius when i see it. i’ll explain more about that part, this teacher of mine who taught me to see through the fog, as we go along. but mostly what i do is “translate” his writing so hopefully us commoners who are used to being fed writing aimed to a fifth-grade level can read his thoughts – which, yes, are my thinking, too.i’m hoping that you will help me in this way, for now: over the next few months, as i finish “editing” each chapter, you could read them and give me ruthless feedback on what’s right and wrong with them…you could tell me what bits are confusing or unclear and could be better.you up for that?gotta go now. lemme know you got this, ok?oh – and please know, p, that my poems like “Scuttle the Ark” and “Another Year” are truly just creative writing designed to, yes, slap the reader upside the head with a super-overdose of reality. The poems are love-poems to humanity, in disguise. waking people to reality is the most loving thing you can do for them, even if the truth pisses them off before it sets them free, har har. The forum thinks I am a miserable, depressed creature, which is hilarious to me. What they don’t know is that I am about the happiest person on earth, each and every day. Why is that? Because I’m on the right track and can be and am RATIONALLY certain of it (in 25 years of meeting every test of logic and reasoning, no one has been able to show where the thinking in the plan falls down), calmly doing every day the only thing that it makes any sense to do – learning and teaching the principles of pay-justice, murdering the idea to allow overpayunderpay so we can have the only revolution worth having, the lasting, peaceful revolution where ideas change in order to change society and culture – and knowing you have the map to get unlost is great, great joy in itself. Yes, I am joyful every day of my life. Knowing you are doing all you can and not wasting your time and energies going down a fruitless path is great joy in itself, and it gives you daily strength and defeats hope-fatigue other activists suffer.Welcome to greater joy, painter!Every best wish for you and yours goes here, for good health and happiness, peace and prosperity. Goodness bless your family.cheers for now,my real name is *****guess i wrote more than i thought i would, eh? tee hee!

Mother of God,There is not one line of your post I can find fault with or that does not concern me as well. If you will forgive a little testimonial, I will tell you why I am thankful for the positive things in my life in spite of the cruelty and misery that abound. I am now 66 years old. During most of my life, I have been involved in high risk activities that forced me to confront how bad things could be if it were not for some kind of intervention by events over which I had no control. In the military, I was in parachute training. I was peacefully descending when I landed on top of another trainees ‘chute. My ‘chute began to collapse. I rapidly ran off the underlying canopy, slid off and my ‘chute reinflated. As an elctric utility lineman, I found myself hanging from the cross arm of a pole, 45 feet in the air. My climbing hooks slipped out of the pole as I was unbelted and changing position. As a helicoptor pilot, I was flying over a salt marsh at 1500 feet. Dual controls were in place. The seat cushion of the adjoining seat fell off and lodged behind the adjoining control stick and I was in a dive with no ability to pull up. I kicked the cushion out of the helicoptor and regained control in the nick of time. My wife was pregnant and I was broke. The obstetrician wanted $640 up front. In desperation, I went to the local OTB, put 10 numbers into my hat in order to randomly pick three, to try to win the trifecta with my last 2 bucks. In the process, I dopped my hat and the numbers spilled to the floor. All but three were face down. I played those three and won. The payoff was $640. As a union official, I had many adverserial relationships with politically powerful individuals. There were times when discretion would have been the better part of valor but I opened my big mouth anyway. Each time I did, some intervening event or person pulled my chestnuts out of the fire just in time. I could go on with many more such anecdotes. The result of all this is I had my nose rubbed in all the bad things that might have been so often, that I can’t help but be grateful for what I have, and am always trying to find ways to be helpful and compassionate to those who seem to be brought before me. No one’s heart is big enough to generate all the compassion needed to address the issues you wrote of, but we can do much better by raising the level of awareness of all of us, as you have done so well in your post. Then we must take action where we can.I wish all the love you have shown be returned to you many fold. Happy New Year. Peace and Love. Wild Bill

@ ORYou’re nibbling into bonds (TIAACREF/SPY88 etc) and believe The Gross-man will start making some money in 09.Is this gut?Or is there some techs behind it.I’m always curious on your moves (as you spell out many of your moves for us) If you have some time and don’t mind sharing, can you give me a little theory or what trends you see happening that points you in this direction?Much obliged.Miss America

Have you ever noticed how conservative the views on this board concerning spending of the FOMzi schemers to rescue us from our credit woes? Take a gander why we with common sense distrust the unholy trinity. “Why, then, do so many economists and commentators hold Keynesian views? Because those same mechanisms are also the core of the elite’s wealth and power, and since the elite control the major broadcast and print media and most universities, any economist or paid commentator who does not champion the Holy Trinity of government intervention, central banking, and fiat currency is shut out of the system. Gary North describes the process, especially in regards to academia, in a reality-based horror story titled How Academic Guilds Police Higher Education.”

http://www.strike-the-root.com/82/allport/allport6.html

Let’s hear it for yummy, nourishing food and loving sex! BIG YAY!(I just took an apple pie out of the oven, and i wish i could send it through cyberspace to all of you)

Cap, “LOVE never fails… it always hopes… always trust… always…

Yeah, but Bernanke, et al, ain’t.

A hispanic friend and I move on towards our destination, home in New York City. So we hitchhike a bus ride with hispanic worshipper’s singing native tongue melodious songs late into the night. We arrive in Trenton to their young energetic familias’ grinning with anticipation of good reports. Onward my friend and I must go. The AmTrac arrives in Newark at the 3 AM, followed by tubes to Journal Square and a 4:30 AM jaunt by Russian cabbies to a surprised homecoming event. Sunday’s first glimpse of the city as we emerge from the PATH/subway station to the jackhammer sounds of 42 nd street. A brisk walk from midtown past SOHO, Chinatown and Little Italy we arrive at the World Trade Center. A quick slice of pizza in a tucked in small shop across the street.Than the vision begins.

Hush money?

j,don’t stop there.!

A view from the trenches; from Reggie Middleton’s Blog – A few grim thoughts for the New Year, as I reflect upon the past year

Thus, any asset that was normally lent against, was most likely abusively lent against under this scenario. Real assets and mortgages were simply the first to pop, starting with subprime, and as we have already seen, definitely not ending there. As a matter of opinion, it is quite probable that the other asset classes that have bore witness to the lending abuses very well may be hit harder than real estate and mortgages – if not on an individual basis, then definitely on an aggregate basis. This is where Goldman, Morgan, HSBC, et. al. will see real pain. This is why Goldman’s level 3 assets are actually increasing as they delever. Think private equity, think, leveraged loans, think venture capital. Just think…Do you really think the government can prevent another big bank failure? It will happen sooner or later, but looking at the current condition and prospects, it appears to be more likely to happen than not.

11And the merchants of the earth shall weep and mourn over her; for no man buyeth their merchandise any more:12The merchandise of gold, and silver, and precious stones, and of pearls, and fine linen, and purple, and silk, and scarlet, and all thyine wood, and all manner vessels of ivory, and all manner vessels of most precious wood, and of brass, and iron, and marble,13And cinnamon, and odours, and ointments, and frankincense, and wine, and oil, and fine flour, and wheat, and beasts, and sheep, and horses, and chariots, and slaves, and souls of men.

MOG, this was not a post that requires any defense. Note the reference to the “powerful.” The “powerful” as in those who control much of the illusion of reality we all see. Those who prefer to operate behind the curtain in the banking system and the war industry whose actions in 2008 were visible more than ever to the public eye due to the enormity of the situation. Those who own the failing system and via their natural inclinations to save it and maintain power and control will continue to starve the planet via inflationary actions. Those whose natural inclinations are to promote war as they the believe the business cycle serves their war industry company’s performance and entitles them to even more wealth.

“Will Banks and Financial Markets Recover in 2009?” Maybe, but what of 2010…11…12… The destruction of the lady is already complete. But, LOVE always protects…always trusts…always perseveres…LOVE never fails…And now, today! theses three remain faith… hope…and LOVE. But the greatest of these is LOVE. fini

Great post!

1 Cor 13:13 nice

As More US Retailers Fail, Malls Could Be Next VictimThis talks about malls and box store and big retail but what about all the small strip malls and recently gold plated auto malls?We have retail space all over southern Oregon and from what I read, all over the country that was recently built to take advantage of all the growth in retail sales surrounding the expansion of the housing markets.This includes space to sell to all those HELOC buyers that no longer exist and Cash Take Out loans and spending from the inflated sales prices of homes. All that is ended and all those retail spaces from lighting fixture stores to furniture stores to bedding and accessory stores, plus the restaurants and everyone else that benefited from the boom are now with much smaller incomes sitting on huge rents or leases which rose as the properties they occupied were built at peak times or sold at peak times… Plus the increases in electrical power and phones and insurance and … that all went up during the *good* times.All of this is unsupportable going forward. First the rents stop coming in. Then the payments on the loans aren’t made. Then defaults, foreclosures and bankruptcies. This section of our economic down turn is only in the first inning. We have a long way to go with it and it will lessen the income of the store owners who will lay people off. Most of whom will no longer make their payments on their homes, autos and credit cards and the whole thing gets worse…. Commercial/business down turn resulting in lay offs resulting in a further weakening of housing prices resulting in more business contraction. All started with SubPrime. But has become a consumer led recession of the worst kind.This is what deflation is… This is what the FED and the government are so frightened about. Once it starts, it is very difficult to stop.The insane thing is that it was not necessary. It has a history. It should not have happened. And it is all about an unsupportable pyramid of debts that have no basis for economic viability. Debts built huge by consumption. Consumption of oil, consumption of wood, brick, granite counter tops and wars that were put on the credit card. Consumption by elderly and retirees who’s pension money was lent to support consumption and not industry.When will we learn?Looks like the lessons are here and we will be learning. Those who refuse to learn from history are doomed to repeat it…

Dismal holiday sales may spur thousands of shop closures > LA TimesMore on retail sales and store closings.

Capone, your post seems to be saying that our future hinges on converting the rich and powerful “leadership” in this world to true religion (meaning the word of God, not the word of the “churchmen”, to put it too simply).I do not think that is a realistic goal at all, so I think it is very fortunate for us that our future actually hinges upon humans gaining economic clarity, and simply coming to act in accord with what everyone already really believes. THIS, is utterly doable.Ever heard that phrase; Justice will be done? We have that on our side – humans crave justice. We’re going to give in to our craving sooner or later. If we’re still here.

Treasury Drafts Broad Guidelines for More Aid to Auto Industry Dec. 31 (Bloomberg) — The U.S. Treasury drafted broad guidelines for aid to the auto industry that would let officials provide funds to any company they deem important to making or financing cars.The Treasury already has provided $6 billion in aid to GMAC LLC, the financing arm of General Motors Corp., and up to $17.4 billion in financing for GM and Chrysler LLC, using funds from the $700 billion bank-rescue package.http://www.bloomberg.com/apps/news?pid=20601087&sid=aR8huxXy_VWI&refer=home

Pour me a sparkly glass, too, please. I want to toast your post from above, and your good perception, kilgores:”MOG, I don’t think you are as cynical as you sound. Surely you appreciate that one does not discount the suffering of others by being thankful for the positive aspects of one’s own circumstances. Wallowing in a recognition of the patent misery and injustice of the world, without more, does not bring about positive change for anyone. Appreciating what one has and cultivating compassion for others leads to tangible actions that can help alleviate, at least to some degree, human suffering. Nihilism is a paradigm of reality I have never been inclined to embrace.”Like I explained, my poem is a love poem, creative writing hellbent on shining a spotlight onthedark because it needs more press, more voice…because embracing all of reality is simply vital to our survival and happiness.But here’s some more of the important whole of reality. May we all keep remembering this: We are existence, existing, and knowing it exists. Love is existence existing. Each of us is awash in the highest pitch of Lovegift – this perfectly imperfectly perfect world. Each of us inherited the never-ending goldmine when we took our first breath, and may we recognize that we inherit it again, with every breath we take.”And I think to myself, what a wonderful world”(definitely worth the clean-up effort)

@jomos; gee whilikers this forum is a tasty treat today!

Well, em, I think we won’t learn the lesson history has been trying hard to bang into our chimpy heads until it finally dawns on us that market forces constantly and automatically shift the work in one direction and the wealth produced by the work in the other direction. I think when we learn that, we’ll see that we must put measures in place to counter this ceaseless drift that does all the damage.

…and will there be a far left socialist hippie party with champagne and fatties here later?just askin’. when you’re an oracle, CM, the questions never stop.

Debt and inflation are two separate animals. Debt is created out of thin air and is the promise of future earnings, while inflation is the real effect of monetary policy delayed by about 6-8 months (i.e., putting more money in the system to replace lost debt).

I use to read Prudent Bear 5 or 6 years ago and still read a link here and there.There really are a lot of great writers and good researchers. Safehaven, Calculated Risk,so many…. Doug Nolan writes for the Prudent Bear. He is one hell of a researcher and writes a credit report I think every week. I have a hard time with all the details so mostly go to his summary. He has been way ahead of the curve on what was coming down.With so many who understand what is going down and none of them picked by our new President who ran on a ticket of *Change*, it is somewhat disheartening to say the least. I just see things getting worse and worse until those at the top have eliminated themselves thru their poor decision and lack of understanding or good judgment. To Pig Headed to be good leaders. I think it really gets down to that good old quality called Common Sense! Greed and arrogance fueled by their education and connections has led them and our country astray.Thanks for the reminder to check with them off and on for updates and info.

as we did in 1929. That crash caused the Great Depression.I was reading until I hit that. You may want to consider adding some classes in HISTORY – maybe the history of economics and the 1930s. So sorry but the stock market crash did NOT cause the Great Depression. The economy in the US had been sliding downwards since aorund 1926. Manufacturing was pulling back,spending was dropping and all before the Crash. Only a very small number lost money in the Crash. The Crash was a symptom, not “the Cause” of the GD. Thee underlying microeconomics in 1926-1930 were very much as they are today:(1) Flat or stagnant incomes(2) Huge income inequality with the gains going to the top 1%(3) Households burdened with too much debt having discovered that new-fangled idea of ‘buying on time’(4) Major sector of the economy was failing – then that sector was agriculture which had too much debt from expansion during WWI and too much production (food surplus) which drove done prices.

something positive

Actually Grimms Fairy Tales are quite scary. Perhaps a Disney World, controlled-imagination environment is better suited for Anon. Much less scary.

The collapse has started to slow at least the panic part of it, there are no runs on the bank, we’re off the gold standard they can print and inflate all they need to. They’re protecting jobs and figuring out ways to get banks to lend etc. The bigger picture is that U.S. will be a poorer nation going forward to pay for its excesses. Not the end of the world we’ll be ok.

Here’s a big positive the political climate is changing, it’s becoming more and more unacceptable for management to pay themselves 100 times the average worker.Another huge positive are forums like these were people can exchange and express their ideas and views freely, this takes the power out of the hands of the big business’s agenda and counters their control and manipulation of traditional media.Bankruptcies are up and this frees up businesses and peoples ability to apply their productive gains at a more grass roots level and that’s very beneficial to society. If everyone is straddled with debt and the fruits of their labor are disbursed to the people who control the money supply then this chokes off the middle class and the greater economy-you can’t have just a few with all the money. Bankruptcy is a form of government backed robin-hood.

Just finished reading ” The Great Depression of Debt”by Warren Brussee. He analyzes the S&P 500 price/dividend ratio history and sees a regression to the mean at 17 to trigger investing back in the market. His idea is to seek refuge in TIPS while the S&P 500 is above 17, then get in after and get out at 28. I agree with him that price/earning ratio analysis is a joke, because of all the fraudulent accounting. His thesis is to stay out of equities until the price/dividend ratio is rational! He implies an S&P 500 at 500 at some point soon!

What’s a few billion between friends?

What a wonderful board. Cheers!

but if the money added to the system never reaches consumers, why would there be inflation? Through some magical action?In fact consumer prices have stayed rather low in the U.S. even though the Fed has been feeding money to the system like crazy since at least early 2008. And look at the gas prices – they have kept going down (in the US) for the last months. OK so it could be that they were high because of greed and not because of inflation in the first place. Or then it could be that “inflation” never is a real (actual / concrete / physical) effect anyway but is just the result of perception…After all what are the reasons for a retailer to increase their prices? It’s not like they look at the news and say “wow looks like Fed is pumping more money into the system – time to hike up my prices”. What matters for the retailers is how much money they see the grassroot public have. OK so there is the other issue of increases in raw material and shipping costs which will affect the manufacturers and thus can cause a price increase at the retailer. But if the manufacturers increase their prices and then can not sell their products, they go belly-up.So where’s the connection mechanism between Fed feeding money to the system and higher prices?

I have faith that men who have known freedom will always, in the end, sacrifice everything to retain that freedom. Americans are close to that point where they will tap into that thirst for freedom that brings revolution if the few now wielding raw power do not respond to the call for change – real change, not Obama “change.”The thrust for free enterprise and freedom is building as the current rule by wealth is exposed by financial crisis, i.e., rule by a plutocracy led by a private banking cartel– an international combine that makes agreements in restraint of free markets by regulation control and credit favoritism and the fixing of self-serving interest rates and currency exchange and by debt and fraud and trillion dollar inflation swindles. Freedom seekers now can identify by name exactly who the few are who have taken the “free” out of free enterprise and the American Dream.As these swindlers barricade themselves against the economy, squandering all the people’s resources to retain their control of the markets and the world’s currencies and their corrupt monetary operations, the people are gearing up to force back.It is now a question of opportunity. As things get worse, and they are going to get much worse, and the government clamps down more and more with no redress, that desire for freedom is going to kick in, and men are going to drop everything to get that freedom back. And they are going to fight, and will kill if they have to kill as they always have, in the cause of human freedom.“Government exists off surpluses created by the people whom they rule. The ruling classes, i.e., those people who refer to themselves as ‘government,’ do not produce wealth, thus their existence depends upon the expropriation of assets from others,” writes Robert J. Ringer in “Restoring the American Dream.”“The American Dream was about individualism and the opportunity to achieve success without interference from others. The heart of the American Dream is freedom: the lifeblood is free enterprise.“The time has come. The citizens of this country either must draw the line and take America back from the politicians who now control it, or they must be prepared to relinquish forever their remaining claims on liberty.”We have drawn the line. We are not “going to hell in a hen basket.” Happy New Year.

Many thanks to all here. 2008 sucked, but thanks to the wisdom shared in this forum I have avoided the worst of it.CHEERS!(More Glenfiddich please)

the answer is NOBODY! so Jane give me your new definition of what is work?

If you do not think inflation is real, then why are you reading this blog? Who has such a poor memory that they cannot understand, see, or feel inflation? Are you working for the government? Because that’s the only explanation that makes sense.See http://www.shadowstats.com/alternate_data The top chart shows inflation and in simple terms there was 9% inflation for 2008 even with lower gas prices.The next chart shows the money supply which has also grown by about 10% for 2008. Watch these graphs for the next few months and you will see the connection.

Happy New Year, Nouriel Roubini. What a wild, adventurous economic ride it has been circling the globe with you in 2008. Your economic prowess with blog back talk from some of the best minds in the business has made RGE EconoMonitor the place to be in 2009 and onward. It is a privilege to be spending it with you and everyone here.A toast to One and All. “Life is like a rainbow. You need both the sun and the rain to make its colors appear.” I love you all: your seriousness and your humor. Happy New Year!

Darned good question,isn’t it, pa? Most middle class folks are wage earners, right? We sell our labor for wages. Our wages pay for the food on our tables and the roof over our heads and the clothes on our backs. We don’t have the slightest idea how to live by manipulating money. We get our hourly wages for our hourly “labor,” pay our bills and taxes and have little left to spend other than on the essentials. When we’re older more of our wages are spent on potions and pills for our old bones, hearts, livers. And other than institutional knowledge from a lifetime of wage-earning work, we have little to bring to an employer who can only offer wages. Old bones have a harder time digging ditches. Old brain cells have a harder time learning new computer software.So employers, let us hear from you. I am not an employer; I’m a worker bee. Would you hire me to, say, work in your claims department if I’m, say, a 64-year-old grayhaired grandma? Or would you rather hire a blonde, leggy 19-year-old wage earner to process your claims? Whose labor is more worthy of your wages?I wait with bated breath. And as I’ve said before, Mother of God has expounded much more eloquently than I on this subject. She advocates a total paradigm shift vis-a-vis the meaning of work/labor and the “value” to be attached thereto. I’m not optimistic that’ll happen in my lifetime, but who knows. Pretty much everything that’s happening now in my middle class American workworld is “unprecedented,” uncharted waters, etc., etc., ad infinitum, ad nauseum. No one wants to think about the old people. And we are or will be those old people, and we’d better get our craniums out of our rectums pretty darned soon.

I left home at 17 in 1970 and have supported myself ever since.I vividly remember living on cornflakes and powdered milk for 28 days and nothing for the last 3 of a 31 day month, waiting for a paycheck to show.Never had a cornflake since:)Today, I believe I am financially “bombproof” but who knows?Along the way, I learned that there is a HUGE difference between “not enough” and “enough”, but there is very little difference between “enough” and “more than enough”.All the money I make above what I believe I will need to see me out, I give away. I paid off my parents mortgage, then my brother’s.I’m working on my friends who are in need next.(And while I take great joy in helping those I love lead more secure lives, lately I have also started taking great pleasure in depriving some bank of 20 years of interest!It is easier for some people to make money than others, but there is also the good/bad luck of birth place, timing, and opportunity.

Budget cutbacks in Law Enforcement=more emphasis on REAL crime, not victimless crime. Overcrowded prisons + budget shortfalls = defacto decriminalization for the prudent. Safer now than ever!

Looks like I’m the first and only nerd active at this time of the year?

Can any one shed some light on declining tax revenues due to the economic situation? how significant is the decline and how it will impact the fed budget and fed spending?

link to graphhttp://dshort.com/charts/bears/mega-bear-quartet-large.gif

Isn’t financing to a wider range of car (home, credit card holder, businesses, etc.) what got us into this mess in the first place?

I don’t have time to read through it, but I googled “impact of declining tax revenues on budget and spending” and got this, that may be of help?page of resultsbtw, I think David Cay Johnston is a superb source for tax truth. I didn’t google for what he’s had to say recently, but you might also try a search on his name?

g,”she caught the katy, left me the mule to ride.”

” we have to fight like hell to get back to a best version of our natural selves”" children understand that all the wonders of the mind need not be explicit.”"…keep the duck.”" my body is my ballot.” u. phillips

A happy new year everyone. I wish you and your loved ones happiness, peace, health and personal development. I also would like to express my gratitude to the Professor and the numerous kind blog contributors for helping me and my family navigate through these tough times. Be well all of you. Psyops

How about some humor to cheer you up. News report from yesterday, ex VRWC style:The Fed announced the naming of a team of bankers and investment firms to conduct the purchase of some 500 Billion of MBS. “This program is being conducted as a model of transparency and openness”, said Henry Paulson, US Treasury Secretary. “We realize that a regular American business cannot even sell the government a hammer without going through a fair and open competition process, so we applied the same here.”The new program is designed to accelerate the free-fall in home prices by allowing banks to transfer their losses on bad home loans and other indecipherable derivatives the the US government with maximum speed and efficiency. “Banks need no longer fear foreclosing on their borrowers”, said Paulson, “because now Uncle Sam is holding the bag”.In a related move, Harvard announced the formation of the new Hank Paulson School of Federal Finance. The school will run the new MBA (Master’s of Bailout Acquisition) degree progams to prepare new graduates for the brave new world of government backed high finance. “Our schools need to be turning out experts in lining their pockets with golden fleece at taxpayer expense, especially to handle shoveling $500 billion of steaming crap onto the Federal books in such a short time”, said Paulson, himself a veteran of Goldman Sachs and a major recipient of fleece in the past.

Russia’s Gazprom cut off all gas deliveries to Ukraine. Link here. This is because of nonpayment and disagreement over 2009 price contracts. This may have implications for European gas as well.When I read this, it reminded me of a Weekly World News headline from several years ago: “US cuts off electricity to Mexico for nonpayment of bills.” Unfortunately, this time, it is not a joke.

Faux News comparisons are low blows indeed, Mr Weiner.

Redleg, I took a look at Thomas Ricks’ description of how Petraeus dealt with Mosul. While I see an admirable willingness to use methods other than force, I don’t see a systematic application of principles of counterinsurgency, nor did the peace last after Petraeus left. Successful counterinsurgency resolves grievances permanently.I think we will find that much of the progress in Iraq has been cosmetic, that the Iraqis are aware that the American people voted to wind down the occupation and are willing to wait before getting back to the business of killing one another. But time will tell.

“Scam of the Century” => Dollar and USA Treasury

Dr. Doom – the original one, not the Professor – Also lost money with Mad-Off:http://online.wsj.com/article/SB123068163425344045.htmlDECEMBER 31, 2008′Dr. Doom’ Didn’t Predict Madoff BlowupFamous Pessimist Lost Millions in Alleged Ponzi; Kevin Bacon, Kyra Sedgwick Caught Up, TooBy JENNY STRASBURGHenry Kaufman, the former Salomon Brothers chief economist whose bearish views decades ago earned him the nickname “Dr. Doom,” lost several million dollars with Bernard Madoff, making him one of the most prominent Wall Street figures to emerge as a victim of the alleged Ponzi scheme.Mr. Kaufman, 81 years old, had the money in a brokerage account with Bernard L. Madoff Investment Securities for more than five years, he said in an interview Tuesday.Meanwhile, a federal bankruptcy judge in Manhattan overseeing the liquidation of the Madoff firm on Tuesday approved a transfer of $28.1 million from one of Mr. Madoff’s bank accounts to the court-appointed trustee of the firm, who said the funds will be used for satisfying customer claims. On Wednesday, Mr. Madoff is expected to turn over details of his personal assets, liabilities and accounts to government investigators.Kevin Bacon, the actor who has appeared in movies from “Footloose” to “Frost/Nixon,” was also an investor in Madoff along with his wife, actress Kyra Sedgwick, Mr. Bacon’s spokesman Allen Eichhorn said Tuesday. The investment was earlier reported by New York magazine’s Web site.Mr. Kaufman earned the Dr. Doom nickname as a result of his consistent predictions while at Salomon Brothers in the 1970s and early 1980s that interest rates would rise and bond prices would fall.More recently, Mr. Kaufman was a director of Lehman Brothers Holdings Inc. and was chairman of the Lehman board’s finance and risk committee before the Wall Street firm’s September descent into bankruptcy. …

BLAST FROM THE PASTI was going through some old paperwork today and came across a newspaper from my hometown dated January 22, 1981. Just had to share this with all of y’all.Front Page Headline: “Freed hostages brutally treated while in Iran.”Below-the-fold front page headline: “Reagan tackles the economy.” From the AP article: “President Reagan is tackling the economy in earnest, with his aides promising to deliver a ‘unique and different’ recovery plan in three or four weeks. . . . Budget Director-designate David Stockman said . . . Reagan is working on a ‘sweeping, comprehensive, bold, far-reaching economic plan,’ including tax and budget cuts. ‘Our program will be one designed to jolt the economy, . . . It will be a full-throttle, four-year plan in which there will be no equivocation.”The local savings and loan was paying 14.721% interest on a six-month CD. The local credit union was offering 5.5% interest, compounded DAILY, on a “NOW” savings account with a minimum deposit of $500.Inflation was at 13.58%. The DJIA was at 963. The Federal Reserve interest rate was at 21.5%. Gasoline cost $1.19 a gallon. A new car cost $7,200.Food for thought.

Back then everyone had a high paying manufacturing job , no one needed credit. Unions were strong and workers were getting paid well.This time no savings no good paying jobs and wages are deflating while everything else inflates-much much worse.

The problem with what you are assuming is that the data is reasonably accurate and that math can account for emotional responses.I believe the programmer’s axiom of garbage in and garbage out applies to this. The modeling that allowed the institutions to justify and sell all the toxic waste was supported by mathematical equations. Did that do any good when the data was faulty and or the complex equations were based upon unrealistic assumptions? Economics is so much more than math.As for the other, non mathematical part, you can not figure in for greed, fear or lies or lack of virtue. Once faith is broken, it isn’t a math equation that returns trust to those who were harmed. It takes a lot of time spent proving honor and integrity again and we are a long long way from that.The leadership is still in denial that we have a huge problem. Many believe that a button can be pushed here or a lever yanked over there and all will be right with the economy again. Good luck to you if you think that.This is about to much debt used for consumptive purpose. Those at the lower levels of the system have no ability to maintain their existence under the current burden of debt to be serviced and other obligations forced on them. Also we have a lot of mal investment to write down or write off. Investment in the wrong things that bring no benefit to our way of life under the conditions we find ourselves. Strip malls to feed people living in McMansions built 100 miles from work where there is no efficient economical transportation system. Warehouses and buildings used to store and sell consumer products that we can no longer afford because to much of our limited real income goes to repay debt which was used to buy those unaffordable McMansion and the SUV and the fuel and the ….. big screen TVs etc.You don’t seem to get it… We spent our future income on yesterday’s pleasures and now we are left with the bills and the interest and we still have to live… And we have less real income to pay for it all with. Sure gas is cheaper but is insurance, health care, food or taxes? Even my utility bills have gone up in the last few years. Most everything I need has gone up except my income in the last couple of years.An economy based on debt for past consumption is not a sustainable economy. We have run to the end of the road and we now see the cliff and your answer is you don’t believe it and want to see the math?Here is some version of math for you. Graph of total debt to GDP.Or total debt to income. I have seen quite a few charts like this over the years, I am not a mathematician or statistical analyst but many like this quote federal sites as data sources. This is the quickest one I could find to link to today. Some show differences in our current and past levels of debt but all are similar in the scope of the story they tell. To much total debt was not sustainable before and we have a similar situation now. To much total debt to our income..And what this doesn’t show is how income has moved from Main Street to a few of the wealthiest among us. It doesn’t show how the richest have benefited in the last decade of inflation from debt or how truly poor much of America has become.And deflation is how the system deals with it….I don’t know how this all works itself out but I do know that more of how we got here is as insane as insane gets. And that denial will not shelter you from any of the consequences.

If you haven’t yet, go to http://www.generationaldynamics.com and read up on the research John J. Xenakis has done. He has some specific predictions about global conflicts and the economy based the Generational Dynamics theory.He tends to be a bit blustery and cocksure in his predictions but in general the Generational Dynamic theory has a tremendous amount to recommend it. He has done a lot of reaeasrch and is a very sharp guy.

@marc weinerYou call for more proofs. It seems to me the great unknown in any economic equation is the variable of human behavior. I can go find material that ‘proves’ we are headed into a deflationary death spiral and I can find ‘proofs’ that we will exit a recession in 2009. In each case the difference is assumptions about human behavior.I think we can safely say that economics is an inexact science. Many with advanced degrees and armed with their proofs have been so wrong, and a few have been right. Finance experts told us we could manage default risk with derivatives. They proved it with their numbers. They were tragically wrong.This is not trying to devalue the science of economics. But the system they are trying to predict and control is way more complex than the models allow for.My graduate degree is in engineering, and my economic experience is real world. I remember one thing that was drilled into me in high school economics – one law that is always true. TANSTAAFL. There Ain’t No Such Thing As A Free Lunch. Somebody always pays. It seems to me the economists, the bailout masters, are violating this one law. They expect to stimulate and bail out at will and hope it will just work. Who pays?The arguments presented for why we are not facing another depression boil down to:Unemployment is not as bad as the 30s (if they measured it the same as they did back then it is getting a lot closer)They are flooding the market with liquidity and not repeating mistakes made in the past (except solvency is the problem, not credit availability)EM will adjust to take up trade imbalance (except they aren’t)In any case, how do economists resolve the violation of the TANSTAAFL law? We are trying to get something for nothing? I am interested to see that proof for how we can violate this law.ex VRWC

To All,I hope everyone has a fruitful 2009, though I suspect markets and the general world economy is going to get more insane. I wish happiness to all and hope we will survive this new insane world.

Wolf, I enjoy your posts and your attitude. I only hope that Obama is for real and not a “look”. ( I realize the chances are slim.) I’m filled with a sense of foreboding because of all the difficult decisions that must be made and the responsibility we all have to see that our leaders are truly working to put things right. The intelligence and courage of the people on this blog to even attempt to make grassroots changes is admirable and to all of you who have provided a place to feel “at home” I want to say “thank you” and may the unexpectedly wonderful happen to you all.

What I find fascinating about the ‘Four Bad BearMarkets’ graph is that it reflects clearly that at 20 November 2008, when the current downturn was about 310 markets days old, the S&P had fallen DEEPER at -51.9% than the Dow had fallen (max. -47.9%) in the downturn that became the Great Depression during the same 310-market-day period.SWK

I would second reading Xenaki’s blog as well.

@ economicminor, or others.new year thought, 2009, here we go…..much of the increased wealth that is now being lost belonged to the1 to 5 percent of the wealthiest. they didn’t need it in the first place except to advance the trend of globalization and “invest” in emerging markets, exploit new resources.the loss of jobs in certain industries is painful and is a real problem for us all but is part of the globalist plan.the fact that our prosperity has been predicated on irrational bubble based economic development for many yearsis also a problem because we have reached the point where there is no nextnew speculative bubble to transition to and nothing sustainable to return to. so the debt based system played out and here we are in debt seemingly without even a global investor?and debt is growing for the sake of systemic salvation, but, the system is a failure? soo. …we are at that place where our assumptions need reexamination, all of them.the global system or the system of globalization has suffered tremendous losses.unregulated it ran itself into a wall. this is the nature of global capitalism andit is the nature of the traditional corporation. the psychopath in the environment and in the community. initially much of the pathology could be exported. with technology and the information revolution that pathology came right back to us undeniably.the “system” lied to it’s customers and itself and now has to be propped up by the central banks for the sake of the globalist. this will fail as these “persons” are not capableof transparency and integrity, ( not part of the charter ). they are not even capable of describing their economicplan to the people of the world nor do they see it as desirable or necessary. they tried to accomplish their goal in a “shadow” system initially. it failed due to corruption bred of opacity and greed. now, in decline, the individual is questioning the nature of the relationships and power balance between the individual and the corporation vs the nation and the international corporation.in the first case the individual is bought out to do the bidding of the corporation.becoming a spokesmen or representative of a legal entity with no social responsibility other than the bottom line of the shareholder. money, and we are losing faith in that.in the second case the national representative, power justified as representative of the people, is bought out by the influence of the global corporation. the global corporation has proved itself to be, well, pathological and psychopathic..on this new year we are acutely aware of uncertainty. more so than in years past.we are also aware that it is a man who was dubbed dr. doom and his integrity andclarity that provides this center of gravity. no pun intended but collapse seemspossible. going successfully forward will require not only accurate and clear observationof the real conditions and relationships but understanding of the quality of the structures andtheir undeniable functions and how this intersects with humanity. so the question is ” what is threatening to collapse”?the “system”. ” systemic” failure is the fear and the thing that the fed and the governmentsare attempting to resuscitate. we are seeing the system trying to save itself and theassumption we are expected to make is that this is in our interest, as we are co dependent contrary to the principle that it “should” be dependent on us.however we are not provided with the information necessary to make this argument or come to this conclusion. bloomberg suesfed for information. denied. CM selective reporting, non-reporting of relevant news.the media and population are mostly preoccupied with enter. de. tainment.people are overwhelmingly unaware, and of the opinion ,that their direct involvement in the solutionto the problem is not essential as it is bigger than we are? it seems the global “solution” will be implemented by strangersand then humanity, the people of the world will be faced with “realities” thatthey/we will then have to satisfy and negotiate. the top down option.the bottom up option would be different with a resulting different structureand function. it would be a revolution of responsibility on the part of individuals and legal persons, corporations. ( of, by and for the people)we are currently at the point where we can recognize certain realitieswith regard to the relationships extant between the environment, the individual,government, and the corporation ( rightful legal person with no humanity).we are seeing the global / international corporations character in the currentcrisis writ large. nakedly pathological. as we identify with this structure we feelvoid of principles and engage in inhuman activity without even being conscious of it.it is just business. a social norm. like credit default swaps, if they are ubiquitousthey become not only harmful but they provide the illusion of protection.this is the system as it interacts with the human mind, it’s attention manipulated intoblindly serving the unsustainable opaque global feedback loop for the sake ofindividual comfort , “splendid isolation” (w.zivon) under threat of annihilation fromwithdrawal of paternal care or application of foreign or domestic terror. a fit and a start/stop on the road to globalization.recent events ..suggest globalists see the destruction of americas 20th century manufacturing and consumingbase as an opportunity toincrease the “efficiency” of the global market. this “efficiency” requires a dependency that has / will fundamentallyalter the nature of governance on this and all continents as globalist/ corporate agendas supercedenational or individual concerns. the information base of the globalist planner, architect, decoupled from the information base of thelocal consumer and producer. decoupling of individuals from their humanity for the sake of psychological survival and productivity seems at least partially necessary.global systemic function superseding national independence the central banks are blatantlyignoring all liabilities with regard to their respective populations.can global neoliberal economics work for poor, middle class or wealthy people? individual people, human beings?i would suggest that local self sufficiency mechanisms need to be incorporated into any global market participant in the event that global structures and functions are destroyed by naked fraud or inherent psychopathy.

The FEDs math is really quite simple: Huge prior debt ($10.6 trillion + new bailout debt ($10 trillion) = problem solved

Would like the words above to stand on their own, man of sight!

You may be naive, but you are playing the part of a fifth column, government paid, FUD spreading shrill. The only magic here is your obfuscation of simple facts.Inflation/deflation is not a theory; it is a simple statement that the same item costs more or less year-to-year. These measurements are reported by the BLS for retail and wholesale.This country has not seen deflation in 96 years; which why the 2009 dollar is only worth $0.04 of a 1913 dollar. Great Depression deflation in the early 1930s was about 15%, but subsequent inflation erased that deflation in a few years. Yes, gas prices have deflated, but the overall profile of cost of goods and services has inflated. This is not a perception issue, it is an objective measurement.It is because of people’s poor long term perception that inflation can exist and you are using that poor perception to twist the issue to your goal of arguing that it does not exist.Money supply is a theory taken from any intro to macroeconomics text: The Fed creates new money through loans. These new loan dollars have the same power of existing money, but as the new dollars move among the expense and revenue columns of corporate balance sheets at a given frequency, there are now more dollars chasing the same goods and services and buyers are willing to pay more to get the same as before.Thus there exists a one-to-one correlation between increases in money supply, the rate of money turnover, a delay interval, and the rate of inflation. Money supply theory and correlation does not prove a mechanism; however, they do supply a predictor that one can use with confidence between Fed feeding money to the system and higher prices?.

I think you hit the nail on the head. Like Mark Twain said, “There are lies, damn lies, and statistics.” Maybe A + B = C, but if A and B are changing, C isn’t going to look like you expect it to be. I would be careful equating economists with “bailout masters.” Bailout masters have an agenda and aren’t so interested in finding the truth, as real economists are. Those so-called economists employed by Wall Street are not real economists in my opinion. At least they have ulterior motives that trump any search for the truth.

g,CM.

Where we are today is summarized:The Domino is beginning to lean harder against the other.DM

Transparency once was an issue, isn’t it? Not anymore, it seems, in the age of Bernanke and Madoff.

Its a sucker rally. Low volume and hoping to draw in retail. But with Singapore’s 4th quarter GDP at -12.5% yoy (which is worse than the Asian Crisis), I am not certain if retail would bite. In any case, no one here seems to know what is going on. Lets see if it draws stupid buyers into the market next week….

The bottomline is that Fed’s actions aren’t going to do jack. There seems to be a view that excess liquidity will reflate the economy, but lets analyze this argument within the context that the American consumer is shopped out. The idea is that, banks would start lending again getting cheaper loans at 0 percent, and would have every incentive to lend. The consumer would get the money and spend it thus stimulating demand and leading to recovery. But precisely because they are getting the loans at 0 percent and not 5 percent is why they will not lend. If the American consumer is “too” risky, they’d rather hold the cash and see it become worth more– in a deflationary context– rather than risk it to the consumer and let it become a bad debt (of course this pertains to the “sub-prime” consumer). If the fed was supplying money at 5 percent, there is an incentive to lend as holding the money equals a loss of 5 percent. Nothing can prevent the coming prolonged deflation and depression. If anything, logic holds that–unless flawed and please do point if it is the case– Feds action will only exacerbate the problem. Of course the underlying assumption for this is that the american consumer is a risky debt, but would anyone suggest otherwise at this point?It will ultimately only depend on the American consumer, how rrisky how much of it is. Accepted that a person with fine credibility won’t consitute a bad debt and thus would get the loans because of excess liquidity, but a person with a fine credit is a rational person who spends within his means, so basically he wouldn’t go on a spending spree knowing that he might lose his job tomorrow, seeing his equity dwindling, and the like. Besides even if this would be the positive side, the problem with the risky consumer will be further exacerbated since lending to them will come to a halt.

when i was just a teen in early 70′s i could not understand how a system could continue while jobs at that time were becoming more and more paper pushing, then later, key board pushing.I spent some time in greenwich con. over christmas and as usual not a word could be spoken that there was any trouble. And even heard that paying 3% more in taxes is way to much for universal health care, and why, because people who don’t have health care are bums and undeserving. Besides, that 3% would mean their child would not get the better school.The matrix was on hbo last night and more and more it seems to have more to do with reality.But then again when i was a teen i ate the pill that opened up my mind and freed me and now i struggle to get food for my kids as others dont see anything wrong and puff out there chest while sending their kids to a better collage. Maybe it is their world and nothing is wrong with it. That would suck, so Excuse me while i burn their flag.

“whom is worthy of that moniker” -> who, not whom. Who is the subject of the clause.”whom I have spoken about Petraeus…” -> with whom I have…

what lady? The harlot that rides the scarlet red beast? It is still alive. It won’t die until the “ten kings” first give their power to the beast (Rev 17:12-13). I am sure they will need to do something like that because this crisis is quite severe…On the other hand other chess pieces need to be in place first as well. Need to have civilian rights, executive power, surveillance and tactical urban warfare capabilities in the right “settings”…all of these chess pieces have been moved towards their places especially within the last 8 years.

It is finished ! …substance of things hoped for and evidence of things unseen…

Thank you! Big Saver, for helping me coin “FOMzi scheme (Federal Open Market)” into wikipedia in 2009. What a goal.) Honey, we are going viral…. Well, stay away from me!

First to post that thereis a NEW THREAD(similar in content to the article I just posted above…

I too ate the pill, moved to the country and was hungry for years. Then I decided that with out capital you had nothing in this system. No security, no future, so I have been accumulating capital, not debt, ever since. My wife and I have lived below our means for 25 years. Let me tell, it is extremely difficult to do that in this world and to get ahead unless you are lucky or extremely gifted, of which I am neither. I still live in the country but now have no debt, a house I built and sufficient capital to get me thru my soon elder years, unless I get wiped out by some unseen event(s).I would love to *invest* in the future of America but have most of my capital in cash in lousy paying accounts because I would rather be safe than sorry. Under current conditions, there is nothing to invest in. Only things to gamble on.My research has determined that deflation is most likely for the next few years rather than inflation which is why cash. I am not married to that position even though I may sound like it when someone reads my writings. They are as much about me organizing my thoughts and putting them out there to be criticized as anything else. I found out years ago that it is easy to marry an opinion and then spend all your energies reinforcing it. That is not productive. So…. Even though it hurts, please throw your criticism at my thoughts as I would rather be right and survive and enjoy the rest of my life as opposed to the alternative.Thanks to everyone on this blog and thanks to the Professor for providing it and his writings and video. He is a hero and a man with more than integrity. He is gifting to us his most precious asset, his knowledge and thoughts. We are truly blessed.

Besides, the rational consumer can already get a loan. I use my cc every month, charge $2 to 4k and the cc company raised my limit. My company sells houses and anyone with decent credit and a little down has been getting loans. I know of none with good credit and a good job history that have been turned down.We were in a dept store before the holidays and there was this deal, 10% plus an additional 20% off all new cards, so we stood there and the clerk did the application and we were readily approved..So I don’t know, WHO is it that can’t get a loan?I assume, people with poor credit histories or inadequate income to debt ratios.And if this is all about lending to some corporation to build another superstore when we have so much retail already in trouble, I say WHY? to what purpose?All this garbage about credit is a smoke screen for something else. Don’t know what but it is like an excuse to cover up the fact that we are in a deflationary cycle and that there is not a thing the government can do about it….

I agree with most of what you say, with the notable exception of your concept of segregating contributions. That is absolute idiocy. It is simply impossible to use any statistics (i.e., actuary tables) when the sample size is one. And that is what is wrong with 401ks. You have no idea how long you’re going to live, and that’s exactly why the only pension system that makes sense is a defined benefits system. That is the same reason why we have car insurance, property insurance, etc. The fact that in virtually all countries such pension systems have been poorly run does not mean that the alternative (defined contributions) is better.Re how they’ll plug the whole, the answer is pretty simple: they will confiscate all the 401Ks, IRAs, etc. There is simply no other way… as you correctly pointed out the only alternative is the Weimar Republic.

Hi, I also am,or was a jewelery manufacturer, I just lost my last account. China has a lot to answer for, they copied everything I did and sold it for half, however the discerning public could not see that what was made in China that was a copy of my jewelery was nothing like the same quality. I guess peoples standards really are low.