second lads

Ha ha, you cannot fool me a second time tutterfrut! I’m the real tutterfrut.

There is both a Taleb interview on Bloomberg and a discussion that Taleb had with Danny Kanehman the day before going to Davos on Infectious Greed blog. Both the Professor and Taleb are being effective in voicing their concerns and Taleb is being more vocal in plain telling everybody “You can’t trust the banks”. Nationalize them, run them as a utility and if others want to provide financial services they are not going to be bailed out. I am dying to see video of their dinner together. I just learned in this video that the professor and Jeff Sachs had been collaborators. This makes total sense. Jeff Sachs in his End to Poverty book takes a very centrist view ofallowing International Labor Regulation. The professor is also very centrist in his analysis of Anglo-American laissez faire as an extreme and total dirigiste as another extreme. We need Pragmatists toSave Capitalism from the Parasites who don’t really believe in Production Capitalism, but are outrightOpportunists.

Oh, and a shameless plug here:I have started a blog on blogspot. It’s called “The Light Of Day”. Come on over and say”hi”.http://medic-thelightofday.blogspot.com/

To join in the GOLD debate, go to the RGE Global Economonitor at: http://www.rgemonitor.com/globalmacro-monitor/255339/the_golden_age_of_recessionMiss America

Glad to see Nouriel clarify his stance that insolvent banks should be allowed to fail. Media are talking about doing “like the Resolution Trust Corp” process of the 80′s, but they never mention that under that plan the bad banks were taken over and stockholders were wiped out. Seems like the “right thing” is to let insolvent BAC and C fail and to wipe out the stockholders and debtholders, take over the toxic assets and unwind them in an orderly fashion. I doubt that Obama’s team is capable of such a strong action. Even though this is what free market means to me, i.e. insolvent businesses should fail, the media will call it socialism if we take over (nationalize) insolvent banks. Amazing how they get it so backwards.

Good to see you back!

I am sure the professor and others are using rational discourse to try to get Geithner to do the right thing.It is our duty to flood Congress with objections to the bad “bad bank” concept. We can’t sit back and let the professor and others do it on their own. We must do what we did when the TARP came out. I don’t see the same energy on the blogs. We have all become fatalists!Call your Representatives to express your displeasure.Once the Banks dump their toxics on the taxpayer and only have upside, they will take even higher gambles.Is Goldman Sachs going to lend money? NO, They are going to gamble without toxics until they go bust and they will be bailed out again. Blankfein has a Bank Holding Company with expressed intentions not to lendmoney. We are being duped!!!!Welcome to the United States of Goldman!!!

Guest on yesterday’s thread said: “As David Axelrod told reporters this week, it looks like a bank aggregator for bad assets is pretty much a done deal, that “we should expect a new approach within a few days,” a “bad bank” into which “troubled/toxic assets can be disposed” into the laps of taxpayers. Well, he should know. He’s been one of the “dedicated, smart professionals” helping to lead this disaster parade, for a long, long time.”Miickey One replied: “Actually, Axelrod spent most of the last 20 years as a campaign manager in local Chicago politics. To say he’s been leading a national parade to destruction is far, far off the mark. Not, mind you, that his recent good fortune will disqualify him from that description should the worst happen.”Both comments are true, with this verification, IMO. Axelrod has long been helping to direct this parade. He is one of the ringmasters for national players such as Dodd, Clinton, Edwards, Emanuel…As ALIPAC reported in “Bush Mob Out, Chicago Mob In At White House”:The inner circle in the White House will be overwhelmingly Chicagoan. [Obama’s] two chief advisers, David Axelrod and Valerie Jarrett, are both long-time associates from the city, and his White House chief of staff, Rahm Emanuel, is another.But more than that, Obama brings with him the baggage of Chicago’s political culture – the roughest in the US. The small-scale bribes that older Chicagoans remember from visits to City Hall are a thing of the past but the sharp suits, naked ambition and political trading are much the same. So too is the large-scale corruption that has seen 50 elected officials from Illinois jailed over the past 30 years.The origins of Obama’s run for the presidency can be traced to Manny’s Deli, an old-fashioned Jewish delicatessen in a bleak neighbourhood. The clientele is mainly working-class but Obama and Axelrod, a former Chicago Tribune reporter and political consultant, were regulars, plotting Obama’s run right up to the presidency…Obama has managed to be above the fray on the local political scene. He has completely distanced himself…”Axelrod and Emanuel are a different matter. Emanuel, in a tactic that Al Capone might have applauded, once sent a political opponent a rotting fish.Dick Ciccone, former managing editor of the Chicago Tribune, said the pair were thoroughly connected to the city’s political establishment, which was “the antithesis of liberalism – a closed shop, a Kremlin”.http://www.alipac.us/modules.php?name=Forums&file=viewtopic&t=141973According to Wikipedia:Axelrod served as the chief strategist and media advisor for Barack Obama’s 2008 presidential campaign. Axelrod contemplated taking a break from the 2008 presidential campaign, as five of the candidates—Barack Obama, Hillary Rodham Clinton, John Edwards, Christopher Dodd, and Tom Vilsack—were past clients. Personal ties between Axelrod and Hillary Clinton also made it difficult…Axelrod also served in 2006 as the chief political adviser for Democratic Congressional Campaign Committee chair U.S. Representative Rahm Emanuel for the U.S. House of Representatives electionsIn 1985, Axelrod formed a political consultancy company, Axelrod & Associates. In 1987, he worked on the successful reelection campaign of Harold Washington, Chicago’s first black mayor. This established his first experience in working with black politicians and he later became a key player in similar mayoral campaigns of blacks, including Dennis Archer in Detroit, Michael R. White in Cleveland, Anthony A. Williams in Washington, D.C., Lee P. Brown in Houston, and John F. Street in Philadelphia.[2] Axelrod is a longtime strategist for Chicago mayor Richard M. Daley and styles himself a “specialist in urban politics.”David Axelrod’s political consulting services are operated through his firm AKP&D Message & Media. He also operates a second business from the same office, ASK Public Strategies, which creates strategy and advertising campaigns for corporate clients.[22] The partners include Eric Sedler (the “S” in ASK), 39, a former public relations director at AT&T and corporate-reputation specialist at PR giant Edelman and the company’s managing partner, and John Kupper (the “K” in ASK), 51, a former congressional press secretary and ad-industry consultant.[22]ASK’s operations, client roster, and revenue remain confidential,[22] but customers and public records confirm the agency has run campaigns for the Chicago Children’s Museum, ComEd, Cablevision, and AT&T.[22] The firm has helped set up front organizations that were listed as sponsors of public-issue ads, a practice referred to as “astroturfing.”[22]In 2006, Commonwealth Edison hired ASK to create a group known as CORE, which described itself on its Web site as “a coalition of individuals, businesses and organizations,” supporting a rate hike. After a complaint was filed with state regulators, ComEd acknowledged that it had bankrolled the entire $15 million effort.[22]In 2004 Cablevision hired ASK to set up a group similar to CORE to help block a new stadium for the New York Jets in Manhattan.[22] ASK’s $1.1 million fee was listed as the “largest lobbying contract” of the year in the annual report of the state’s lobbying commission.[23]In 2007, the University of Chicago Hospital hired ASK to assist in marketing a plan for steering patients who don’t have health insurance to other health care facilities. The plan has critics in the community, however, who see it as a way to dump costly patients and increase the hospital’s bottom line.[24][25]http://en.wikipedia.org/wiki/David_Axelrod_(political_consultant)Also this information below from a link here to a scrubbed Wikipedia article: “Wikipedia – David Axelrod gets Scrubbed!” http://186-kps.com/blog/2008/09/22/wikipedia-david-axelrod-gets-scrubbed/Axelrod is the senior partner of AKP&D Message and Media and was a political writer for the Chicago Tribune. He operates ASK Public Strategies, a company that allegedly engages in “astroturfing” [12]. He is also a supporter of Cook County Commissioner Forrest Claypool, who helped Axelrod found his firm (under the name Axelrod and Associates).ASK Public StrategiesAxelrod operates a second business from the same office, ASK Public Strategies, that discreetly plots strategy and advertising campaigns for corporate clients to tilt public opinion their way.[20] He and his partners are secretive about operations and won’t reveal the client roster or revenue. [21] Customers and public records confirm agency has run campaigns for the Chicago Children’s Museum, ComEd, Cablevision, and AT&T.[22}The firm helped set up front organizations that were listed as sponsors of public-issue ads, a practice that industry insiders call such practices "Astroturfing" (manufacturing grassroots support).[23] Eric Sedler, 39, a former public relations director at AT&T and corporate-reputation specialist at PR giant Edelman, is the “S” in ASK and the company’s managing partner. The “K” is John Kupper, 51, a former congressional press secretary and ad-industry consultant, while the “A,” of course, is Axelrod.[24] One TV commercial, penned by ASK, warned of a ComEd bankruptcy and blackouts without a rate hike and was sponsored by a group known as CORE, which describes itself on its Web site as “a coalition of individuals, businesses and organizations,” but after a complaint was filed with state regulators, ComEd acknowledged that it had bankrolled the entire $15 million effort.[25] Employees of the utility and its parent, Exelon, have contributed $181,711 to Obama’s presidential bid, more than workers at any other company in the state.[26] When Illinois utility Commonwealth Edison wanted state lawmakers to back a hefty rate hike two years ago, it took a creative lobbying approach, concocting a new outfit that seemed devoted to the public interest.[27] The firm also worked on behalf of Madison Square Garden’s to stop plans for the contructions of a football stadium for the Jets on New York’s Westside.[28] ASK’s $1.1 million fee was listed as the “largest lobbying contract” of the year in the annual report of the state’s lobbying commission.[29] ASK last year proposed another “front” group campaign to help Illinois hospitals block a state proposal that would have forced them to provide more medical care to the indigent.One part of its plan: create a “grassroots” group of medical experts “capable of contacting policymakers to advocate for our position,” according to a copy of the proposal. (ASK didn’t get the contract.) Public-interest watchdogs say these grassroots campaigns are state of the art in the lobbying world. “There’s no way with a straight face to say that’s not lobbying,” says Ellen Miller, director of the Sunlight Foundation, which promotes government transparency.[30] The firm’s work has also involved Michelle Obama’s employer, the University of Chicago Hospital. She helped create a program, called the Urban Health Initiative, that hired ASK Public Strategies in 2007 to assist in marketing the plan to the community as a better alternative for poor patients. The plan has critics in the community, however, who see at as a way to dump costly patients and increase the hospital’s bottom line.[31][32]http://98.200.222.218/archived/axelrod-cache.html

Good to see you back even if it is momentary.

You are missed, but it is good to see someone digging in and making a difference!

Dear LB, I think simply noting your presence at the blog makes us all fell a little better. Keep up the good work, which I have a gut feeling might indeed be good.ps. To Medic: Interesting photo. For someone blogging from a much warmer corner, I finally get to understand that pellet stove thing. My warm wishes on your new blog!

From the article above:

U.S. President Barack Obama’s current administration, such as National Economic Council director Larry Summers and Treasury Secretary Timothy Geithner “are as strong as you can get to understand policy, economics, finance and they’re going to do the right thing,” Roubini added.

Evidence would suggest that given the opportunity, Geithner (Turbo Timmy) did not do the right thing. Perhaps he has since had his moment on the Road to Damascus or perhaps his name is Legion.And as for Summers there is this quote from the NY Times in 1999 as agreement was reached on repealing Glass- Steagall.

Treasury Secretary Lawrence H. Summers said in an interview, ”At the end of the 20th century, we will at last be replacing an archaic set of restrictions with a legislative foundation for a 21st-century financial system.” The measure, he added, ”would provide significant benefits to the national economy.”

http://query.nytimes.com/gst/fullpage.html?res=9E02E0D81F39F930A15753C1A96F958260

LB,You haven’t missed a thing.Same cheaters tearing the global financial system apart.Most countries a little more broke.Instead of trying to create a good bank for a change, they’re going for another ‘bad’ bank.Only new thing over the past few days is that we’re having an ever accelerating Roubini NEW THREAD bubble. Roubini is everywhere, and good for him, but let’s just hope it doesn’t turn into a bust…Welcome back, same for Medic

Turbo Timmy- nice moniker.Turbo Timmy must have great fun with Heli Ben on Ben’s super-whopper-jumbo jet…

Roubini said. “You have to rethink this global accord about capital adequacy and supervision in a different way, you need cooperation but you also need to be willing to do the right thing.”From the last thread:Bremmer – “We are moving away from a system in which the United States plays a dominant political and economic role toward a non-polar world order. But the leading emerging powers are reluctant to accept the burdens that come with a greater global role. So, there will be even less international cooperation on global issues, like climate change and proliferation, and fewer international

Hey there LB… Not trying to start a fight here but… Have you noticed a little more chatter on the EU destabilization? I can’t remember where we took the debate up, but I do remember speculating that there could be unknown variables there which could lead to EU exits, or collapse.I think you went off on me because you thought I was implying war… But I squared that away later stating it would be financial war. (the gist was that Ger,any wouldn’t want to pay for Spains’s housing bust… etc…)I’m not saying that this is happening… nor is it a prediction of mine right now… but I have read a lot of chatter recently that resembles the early side of that debate we had some time ago.Apart from Eco101… I hope you and you family are happy. Continue your good work, and keep helping wherever you can. I hope this endeavor continues to be fulfilling and profitable. (especially the latter)As I’ve recently told you, or you may have noticed, I have stolen your salutation of “All the best” in dedication to your departure. (“Imitation is the most sincere form of flattery”)So if you read this… All the best,Miss America

Nothing so far leaders of the federal government have done has provided palpable confidence to the consumer, to the markets, to the global economy. In effect, we have proven brilliant minds such as Roubini’s and Taleb’s expousing the proper path to recovery while those in charge appear to be doing nearly the opposite.Until common sense brilliance defeats self-serving connivance through the ballot box or through other methods as initiated by an angry populace we are not only in uncharted waters but doomed waters. It is wholly apparent now that individuals such as Roubini and Taleb represent the greatest threat to the status quo and IF this crisis is indeed resolved some day we can now unequivocally state that it was their influence that had an enormous impact in doing so.AM

The Bridge Bank to Nowhere

A Bridge Bank Too Far

A propos calling it socialism to nationalize the banks. That’s just what it is and why not call it that. Socialism’s OK. Daily Pfennig posted this quote just today:”Owners of capital will stimulate the working class to buy more and more of expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalized, and the State will have to take the road which will eventually lead to communism”-Karl Marx, Das Kapital, 1867

I’ll be posting in both places – time permitting. I learn much here and enjoy the give and take of a good debate. The new blog is where I hope to learn to write effectively and concisely for a varied audience. Practicing for a new career……

What is worse this so-called socializing the banks and then sell them in pieces (privatize) so that no, one big monster remains that will undermine capitalism or this wall street-govt orgy where they socialize the losses and privatize the profits.It would be the right thing to nationalize the big 7 banks holding 80 percent of the banking assets, wipe out the stockholders and bondholders, bring down these toxic assets to market value, get the banks functioning again, and sell them, most imporantly, in “pieces”, not as wholes or big chunks.Meanwhile, banks that are not too big to fail should be allowed to fail.I think what Paulson did, a person from Goldman Sachs he was very smart. He let its competitior Lehman fail. Then he made the tarp program and realized that if these toxic-assets were auctioned, there written down values would have implied that the cat was out of the hat and many of the banks were insolvent. So, he pumped in money as “preference share holders”. It acts like a loan, but isn’t a “liability”. Now they will make the bad bank, so the cash that companies received already doesn’t count as a liability but as an “asset” thus making them solvent?Would the above logic be right in that this whole was clearly planned?

Clearly, protectionism is also clearly the wrong thing to do! Closing the borders, and cutting off trade is bad! There are positive externalities of trade, and competitive advantages, etc. There needs to be trade deficits among the affluent people and natinons. I run a huge trade deficit with my grocer, I buy from them, they never buy things from me, what a deficit! I have a capital account surplus elsewhere to finance this trade deficit, and it allows me to not worry about crops, and farm animals, that for example, I like to eat. As for budget deficits, I think Governments and the people (especially Americans, and the USA Gov.) they need to work on balancing their budgets!~ Andrew Bernhardthttp://www.google.com/search?hl=&q=+site:www.rgemonitor.com+Bernhardt,+RGE

They call it socialism for obvious reasons the same people who own the banks own the media and of course they want to steal the tax payers money and they don’t care if they collapse the U.S. they’ll all just live in gated communities with armed guards. Get the money and run is the elites motto. We need to start giant protests in the streets to stop the oligarchy from bankrupting our civilization. Obama is a puppet on their strings and is unwittingly killing off the U.S., we live in a fascist country controlled by elitists and corporations disguised as a free system with bogus so called “free” elections, but in panic times we all now get to see who really controls society and our government. Now is the time to revolt and call for politicians and ceo’s heads.

I agree, it is ridiculous that the response from the people has been so tame, they should really be asking for the heads of their congressmen and try Paulson in the courts and ask him to account for each and every penny. But their job is to put the people in the plethora of fear and make every issue a “national security” issue. Thus, putting the people in this constant state of fear, and protecting the shareholders, bondholders under the guies of “national security”. I ask what is the worst that will happen…unemployment? Well that is going to happen anyway as is happening and unless a lot of capital goes in the right direction, there will be downsizing from over-inflated industries and there will be unempoyment. This is a structural issue and must be resolved accordingly. But the point again being, how can they do something like this, protect and serve the risk-takers, and just look at it, what sort of morality it is….that they are taking money from factory workers, clobbers, and salesmen, and people who work their asses to survive, for the sake of the stockholders, bondholders who took all these risks and deserve the losses? What sort of capitalism is this?I read somewhere that this was being done to save capitalism. What a load of rubbish, capitalism is where bussinesses are allowed to fail and if these monsters are too big too fail then they have already undermined the core principles of capitalism. So, the right thing is, nationalize the big 7 banks and allow other banks to fail. Unfortunately, Obama lacks the conviction, if he has shown any, to be able to do this and take the strong measures in the long-term interests of the people consistent with freedom, not guising the people behind a veil of fear.

Capone… You couldn’t be more right!!! What the hell were they thinking when they initially started saying the words “Bad Bank”.They did not need to create a “bad bank” as we already have plenty of bad banks in existence! Way to pour gas on that flaming image!Instead, the euphemism police will need to go with a much more positive sounding names. “bridge” isn’t even good enough! They’ll choose: “Expansion”“Bank” won’t work either. How about something like: “Gathering Group for Securities”?There you have it: The Expansion Gathering Group for Securities. EGGS…or better known as the Rotten EGGS!…but they’ll spin it to make people think it’s Nest EGGS…and either way, it will stink.Miss America

you can’t trust banks? So we trust the government instead? HAHAHAHHAHAHAHAH

You forgot the other big LOSERS: future generations. Because one question remains; how could the UK, Carribean and Luxembourg get all those excess so-said “savings” to finance a big chunk of US debt.

Wasn’t that what he was doing during over a year already ???

I would trust this administration, as imperfect as it may be, far more than I would trust a bank.

What about calling it “Deal or no Deal”, except that it will be banks who will be assigned boxes with bailouts of different values ranging from an empty box (for the CEO to pack his belongings and clean his desk) to a box’s full load of the bank’s toxic waste – including CDO squared – to dump them behind the Treasury building?Imagine Ken and Vikram and Jamie et al holding each a box and Geithner in the middle. When the phone rings it will be Jiabao making them an offer they can’t refuse.At least, this will be more entertaining for the public, and some would say fairer since it is chance that will decide what each will get.

Speaking of that delightfully rare moment when I agree with Prof. Roubini:”… but the recent global financial crisis was a white swan event, as it followed a gradual build-up of predictable financial vulnerabilities that were ignored by most.” (from the previous article/thread)The above statement is, of course, true; so, why did only a handful (less than 30) of people out of nearly 7 billion people on this Planet, recognize, acknowledge, understand, comprehend (etc.) the then, pending global economic collapse cum Depression cum Dark Age (yet to arrive)?Why?Yet, and more to the point, those that “denied” the already arrived and undoubtable and inarguable death-state of the global economic state; that is to say, those like Mr. Benanke and Mr Paulsen and Mr Geithner, Summers, Rubin, et al ad nauseum; those that can only be described as “insiders” are now “entrusted” by the Nation, nay World, to fix an economic situation /complexity that they obviously fail to comprehend and/or understand?But, the question is: As this is a “white swan” (expected event by rational and obvious, er, common understanding ie without complexity issues) just how dumb, incompetent and stupid can the “leadership” of this World be?Worse still: Prof. Roubini who did foresee this “white swan” event – goes on er, proceeds, in glorious words and phrase, dumps praise upon praises on the Obama team of Geithner and Summers, et al, to do the right things?????And the Big Man himself? Prof. Dr. Benanke who assured us that all was well – as the World fell off the edge of the cliff?Now the solutions are a continuity of failures – as witnessed – ‘we take your money to give to our friends so as to keep our life style so, Foxtrot Oscar, we are your “experts”‘???????????If you consider one thing while believing Prof Roubini to be right, which I believe he is; any body with the focus and the resources of office; any such idiot could have predicted the state in which the world is in at the present time; any such moron could have, especially those that were in positions to do so such as Prof. Benanke and Mr Geithner.Ho diddly humKeywords: dumps | stupid | dumb | praise | white swan | Foxtrot Oscar |

Even the mainstream is starting to see the big picture. Every ounce of my survival instinct keeps screaming one word to me: GOLD.DAVOS, Switzerland — Even as Congress looks for ways to expand President Obama’s $819 billion stimulus package, the rest of the world is wondering how Washington will pay for it all.Few people attending the World Economic Forum question the need to kick-start America’s economy, the world’s largest, with a package that could reach $1 trillion over two years. But the long-term fallout from increased borrowing by the federal government, and its potential to drive up inflation and interest rates around the world, seems to getting more attention here than in Washington.“The U.S. needs to show some proof they have a plan to get out of the fiscal problem,” said Ernesto Zedillo, the former Mexican president who helped steer his country through a financial crisis in 1994. “We, as developing countries, need to know we won’t be crowded out of the capital markets, which is already happening.”Mr. Zedillo said that Washington, unlike most other countries, had the option of simply printing more money, because the dollar was a reserve currency for the rest of the world.Over the long run, that could force long-term interest rates higher and drive down the value of the dollar, undermining the benefits that come with its special status.Until now, most fears about surging government debt have focused on borrowing by European countries like Spain, Greece and especially Britain, which is also in the midst of a sizable bank bailout. That recently forced the British pound to a 23-year low against the dollar.While the dollar’s status as refuge in a time of turmoil should prevent that kind of sell-off for now, a number of financial specialists warned that if fundamental factors like the lack of American savings and bloated budget deficits did not change, the dollar could eventually fall sharply .“There aren’t that many safe havens,” said Alan S. Blinder, a Princeton economist who is a former vice chairman of the Federal Reserve in Washington, explaining why the dollar’s status as a reserve currency is unlikely to be threatened.Instead, it is the dollar’s long-term value against other currencies that is vulnerable. “At some point, there may be so much Treasury debt, that investors may start wondering if they are overloaded in dollar assets,” Mr. Blinder said.While the focus in Washington has been on putting together a stimulus package that will attract broader political support when it comes up for a vote in the Senate, here in Davos the talk has been about the coming avalanche of Treasury debt needed to pay for the plan on top of the bailout measures approved last fall, like the $700 billion Troubled Asset Relief Program or TARP.The stimulus was approved Wednesday by the House without Republican support, and could grow larger — mostly likely with additional tax cuts — to attract a bipartisan coalition.American officials maintain they are aware of the challenge. A top White House adviser, Valerie Jarrett, promised in Davos on Thursday that once the stimulus plan achieved its intended affect, the United States would “restore fiscal responsibility and return to a sustainable economic path.”Jarrett, a confidante of both President Obama and his wife, Michelle, is the highest-ranking administration official at Davos.To be sure, Congress and the White House will ultimately need to refill the government’s coffers, but how they might do that is barely on the radar screen in Washington at this point.“Even before Obama walked through the White House door, there were plans for $1 trillion of new debt,” said Niall Ferguson, a Harvard historian who has studied borrowing and its impact on national power. He now estimates that some $2.2 trillion in new government debt will be issued this year, assuming the stimulus plan is approved.“You either crowd out other borrowers or you print money,” Mr. Ferguson added. “There is no way you can have $2.2 trillion in borrowing without influencing interest rates or inflation in the long-term.”Mr. Ferguson was particularly struck by the new borrowing because the roots of the current crisis lay in an excess of American debt at all levels, from individual homeowners with subprime mortgages to Wall Street banks who let their balance sheets balloon.“This is a crisis of excessive debt, which reached 355 percent of American gross domestic product,” he said. “It cannot be solved with more debt.”While Mr. Ferguson is a skeptic of the Keynesian thinking behind President Obama’s plan — rather than borrowing and spending to stimulate the economy, he favors corporate tax cuts — even supporters of the plan like Mr. Zedillo and Stephen Roach of Morgan Stanley have called on the White House to quickly address how it will pay for the spending in the long-term.“It’s huge,” the chairman of Morgan Stanley Asia, Mr. Roach, said. “President Obama has now laid out a scenario of multiyear, trillion-dollar deficits.”To make matters worse, he said, the United States “is a savings-short, deficit economy. When we decide to borrow, we’re asking lenders from around the world to step up and give us the money.”The stimulus is widely expected to pass, but once it does, Mr. Roach said the focus would shift to “who foots the bill and what is the exit strategy. We don’t have the answer to either question.”Mr. Zedillo, who remembers how Mexico was forced to tighten its belt when it received billions from Washington to keep its economy from collapsing in 1994, was even more blunt.“People are not stupid,” Mr. Zedillo said. “They see the huge deficit, the huge spending, and wonder what comes next.”http://www.nytimes.com/2009/01/30/business/worldbusiness/30davos.html?_r=1&partner=rss&emc=rss&pagewanted=print

What have we come to?

Looks like this should be a more direct link.http://www.lewrockwell.com/podcast/?p=archiveAM

Has there been any news in the National Media about the 3.5 million(!) strikers in France?If not and this seems to be the case from what I’ve seen, why not?http://news.bbc.co.uk/2/hi/europe/7857435.stm

Another shoe droppingJust went through Marcus & Milichap’s 2009 guide to apartment house investing. Cap rates (ie cash flow before debt service divided by price) on A grade apartment houses are about 6.5%, up from 5.5% or so three years ago. In most of the ’90s cap rates were 8 – 9%. That would mean a 20%+ drop in values. World Savings (now part of Wells Fargo) and WaMu out here were the biggest apartment lenders. Volume of deals has dropped almost 50%.

If they pillage the tax payer for the sake of multi billionaire stock and bond holders there should be riots/change of government!!! Enough of this bullshit!

If Obama thinks he can do some grandstanding on pay and bonuses as a form of consolation for bending the tax payer over by bailing out billionaire bankers and bondholders; we’re not that stupid Obama!!! We know your tricks!

perhaps that “U” may turn into an “L” (recession) after all!

You are right. Mr. Celente and his Trends Research Institute have a pretty good track record and a fair amount of credibility even in the mainstream media.

Just use Norton anti government virus remover: it identifies the villains, quaranteens them and permanently removes them. Problem solved! I hear it can be purchased through Rambo, The Punisher or XXX.

“You little nasty wicked spoiled reckless …Take your dessert and go to your room … no going out for today … understand?You’re being grounded … all of you …[I was a bit harsh on them, maybe]OK … you can play with the Wii but only until midnight.”

Is Dr Roubini hoping for a job with the Obama administration? He is constantly praising his economic team. If they are so brilliant, what do we have to worry about.

This is a valid point, however, never estimate the delusion of people even when they are faced with the obvious and the common sense (these can be interpreted from a cognitive point of view by confirmatory expectation biases …)It is as if your anti-virus “see” different viruses, trojans, and other threats but don’t detect them and even less remove or quarantine them. Normally the majority of antivurises should be able to at least detect the majority of threats.There are some verifiable and basic laws (laws of nature, that is, not those of humans) and rules (such as, do not trust a human with a responsibility) that can be used as a founding ground for a logical system. Excesses will always subsist but hopefully kept in check.

http://tpmcafe.talkingpointsmemo.com/talk/blogs/dkc/2009/01/the-undertow-of-bad-ideas-a-ba.phpI can find a single soul defending the bad “bad bank”(aggregator)(bridge bank from hell) ideaBoth conservatives and progressives are aware thatthis is a blatant attempt to rob the taxpayer. Theamerican public is going to be baraged with the Stimulus Package details and the Superbowl over the weekend and the bankers feel they can deflect theheat by hiding behind all the activity. At the lastmoment they will roll out Sheila Bair, who they havebeen pumping up as a rebel, who will tell us she needs the bad bank to help the little guy who needs modifications and the bondholders have not allowed thebanks to help the poor souls. This soap opera has been orchestrated for a while and that makes me feelthat they have big plans beyond the bad bank. The financiers behind Geithner and Summers are great chess players and have 20 alternate moves for everyunanticipated reaction. We have been sold Obama as anagent of change, and he might be, except for one item.The multi-trillion dollar heist of the taxpayer moneyis too important to leave to chance. Geithner, we knowhas the IRS thing to hang over him. Obama most certainly has a chink in the armour that the bankersknow. All politicians can be destroyed if they have an antecedent line of piccadilos! Remember that a President was impeached for not keeping it in his pants with a White House employee. I have been trying to figure out the chess moves for the future, and the potential for mischief is infinite, specially when the NSA radar was turned towards the inside of the country for years. Witness how Spitzer was found out!If you take this concept in conjunction with the “art of the possible”, I can see a scenario where the bankers are having their own Davos elsewhere and they have a pool where you bet the total amount of money the banks can steal from the taxpayers. With their power and imagination, the sky is the limit. They definitely want to beat the record which was pulled off by the oligarchs in Russia with Yeltsin.

you’re right; we would have to update the anti-viral remover every 6 months!

This is from Mish today mid thread! I love the part at the end where he says that maybe the combined lossess are “TOO BIG TO BAIL” , but they will try!I think they are desperate and they will offer us a sequential series of theft after theft, until we are all naked!(this is I not Mish)Good Bank Bad Bank Deal Is A Bad DealInstitutional Risk Analysis is discussing The Big Banks vs. America: A Roundtable with David Kotok and Josh Rosner.The term “bad bank” is being tossed around Washington dinner tables this week, a sign that the situation facing the largest banks is reaching a boiling point. It is amazing to us to see how little people understand the choices facing us with the big banks, how narrow those choices truly are and how the numbers in terms of losses are so BIG that they will ultimately force us to do the right thing.Remember that the entire banking industry stands in front of the taxpayers in terms of loss absorption at the FDIC, so you can understand why the smaller banks in the industry are SERIOUSLY PISSED OFF at the large banks and their minions in the Obama Administration like Tim Geithner and Robert Rubin. Oh, and don’t forget Chairman Ben Bernanke and the entire Fed board of governors. These leading officials are increasingly talking the side of the large banks in the battle over limited financial resources, a fact that is causing the community bankers to rise in anger. Stay tuned.Roundtable: David Kotok & Josh RosnerFor additional perspective on this issue, The IRA spoke last week to Josh Rosner of Graham Fisher & Co and David Kotok of Cumberland Advisors:The IRA: The basic question everyone’s asking is what do we do with the big banks, particularly C and BAC and the growing tension between the cost of supporting the big banks w/o a resolution and the rest of the industry, which is being resolved according to the law. You can see our discussion of the issue and our view of loss rates above.Rosner: First, I am very cautious about making loss estimates because your loss number could be very low. I can actually draw a scenario that gets us well above that level of charge offs, especially if we assume worsening macro conditions and their further impacts on ADC books, corporate defaults and other areas outside of the structured exposures.Kotok: The motivation of keeping big banks alive is driven by a desire to avoid another Lehman on the Obama watch. I hear people saying that we cannot have another Lehman, therefore we cannot permit a failure. … It is the Lehman failure and the contagion that is driving this policy.The IRA: Well this just confirms that nobody in Washington understand the problem. As we have heard from many people in the industry who did the diligence on Lehman, there was no way for a private buyer to do the deal, so bankruptcy was the only choice w/o a very large, several hundred billion public bailout. The fact that the Fed and Treasury professional staff support this type of idiocy, over tinme, will destabilize the political consensus in this country behind an independent central bank. We might as well just make the Fed part of Treasury now.Kotok: It looks to me as well that we now have Paul Volcker saying that we cannot tolerate another Lehman failure. Maybe Chris has some thoughts on this?The IRA: My conversations with Chairman Volcker are OTR unless he says otherwise.Rosner: I think what you are going to see is, on the one hand, the Fed, Treasury and OCC put together a proposal for a continuing or institutionalization of the “insurance wrap” approach used with C and BAC. This is a useless approach, in my view, and as we saw in the case of C because it created greater market confusion.The IRA: Nobody in the Congress or the White House wants to acknowledge that the policy prescriptions coming from the Fed and Treasury are badly flawed when it comes to bank solvency. The market liquidity measures have had success, but the “save the big banks” approach by the Fed is just more of the same nonsense that cause the problem in the first place.The Institutional Risk Analysis is always a good read. This one was exceptional. I recommend reading the entire article to see the letter from the reader that inspired the post, as well as more of the roundtable discussion.”Black Swan” commented earlier today, his idea of what is driving Geithner. “There is only one reason Geithner doesn’t want to nationalize the banks. It would destroy all the stock wealth of his bankster cronies now running these banks, and would force them out of their financial engineering jobs and personal fiefdoms. Geithner will do everything possible to not force banking’s elite insiders to have to go out in the working world amongst the commoners.”Regardless of the motivation, one look at the IRA article suggests something that I have maintained for quite some time. This may not be a issue of “too big to fail”, but rather the combined losses may be so great that it’s a case of “too big to bail”. Nonetheless, expect them to try, and expect lots of damage to our economy when Geithner does try. That unfortunately is the deal.Mike “Mish” Shedlock

Hey, dood. Congrats on your own blog. I’ll mosey over there and take a peek. Missed you–

.http://video.google.com/videoplay?docid=8649250863235826256video of derrcik jensen lecture….”what a way to go, life at the end of empire.”.dvd worth the price of purchase..What a Way To Go: Life at the End of Empiretim bennet, sally ericksonCarolyn Bakerreview..A REVIEW OF THE DOCUMENTARY “What A Way To Go: Life At The End Of Empire”, by Tim Bennett and Sally EricksonI didn’t say it would be easy; I just said it would be the truth. – Morpheus, from “The Matrix”If anything is not easy to watch but absolutely the truth down to one’s toenails, it is Tim Bennett’s and Sally Erickson’s doggedly transparent documentary, “What A Way To Go: Life At The End Of Empire.” Nothing less than a 123-minute cat scan of the planet and its twenty-first century human and non-human condition, this documentary is indeed, “in your face” but with reverence, poignancy and solemnity yet sending world-class denial artists running to re-watch “Little Miss Sunshine” another one hundred times. While viewing it, I could see in my mind Carl Jung puffing on his pipe and pensively whispering under his breath, “Human beings can only handle so much truth.”Divided into four parts, Waking On The Train, The Train And The Tracks, Locomotive Power, and Walkabout, the film begins with Tim Bennett’s personal saga of awakening in the eighties from lifelong slumber. Recounting the realities he has subsequently discovered is a tedious litany of human and planetary horrors that only those ready to awaken with him are likely to endure. To their credit, Bennett and Erickson offer no “happy ending chapter” at the end—no list of quick and painless fixes. Nothing about the world humans have created in the past several thousand years is painless, and nothing they might contemplate doing to remediate it could ever be quick. “What A Way To Go” is nothing less than two physicians presenting a diagnosis of terminal cancer to a patient who currently feels and looks “just fine”. Still another metaphor might be the one that Bennett and Erickson present in the documentary’s first chapter, namely, that of a suicidal individual standing on a ledge at the top of a very tall building, contemplating jumping to his death. It is an image to which the filmmakers return several times as the film progresses.The issue of denial is addressed head-on as the documentary’s numerous interviewees name it and its consequences. Those individuals include: Thomas Berry, Richard Manning, Stuart Pimm, Ran Prieur, Paul Roberts, William Schlesinger, Richard Heinberg, Chellis Glendinning, Derrick Jensen, Jerry Mander, and Sally Erickson. Specifically, Derrick Jensen speaks of the energy that it takes to remain in denial, and how humans who stop clinging to it discover that as a result, an enormous amount of energy is freed up to do whatever work the planet’s terminal state calls them to do.“What A Way To Go” names Peak Oil, climate change, mass extinction, and population overshoot, as the four pivotal and daunting challenges that humans must address and resolve if any species are to remain on planet earth. Equally terrifying, in my opinion, are two symptomatic offshoots of these four: nuclear holocaust and global economic meltdown.So how do humans—that species which unlike all the others, is in the process of rendering earth uninhabitable—reverse the nightmare we have created? While for many of us, it may seem like a no-brainer, Bennett and Erickson emphasize that unless the issues are unveiled and talked about, no hope for solution exists. Given the documentary’s unrelenting reminders of the lethal trajectory to which the human race has committed itself, the filmmakers’ insistence on breaking one’s own denial system is a crucial first step to all others.As an historian I particularly appreciate Sally Erickson’s assertion in the film that in order to begin addressing the issues, we must develop a historical perspective and understand how we arrived at this point in human history. This is exactly what I have attempted to do in my recently-published book U.S. HISTORY UNCENSORED: What Your High School Textbook Didn’t Tell You. Americans in particular are loath to investigate causes and prefer to hastily “move on” to solutions; however, without understanding causes, it is impossible to construct viable solutions.Especially validating for me was the perspective this documentary lends to the issue of Peak Oil in relation to climate chaos. While experts on hydrocarbon energy such as Richard Heinberg leave no doubt in the viewer’s mind that Peak Oil is a frightening reality, those same experts, including Heinberg, acknowledge the gargantuan climate change monster that could surpass Peak Oil not only in its consequences but how quickly those consequences manifest the collapse of civilization and make the planet uninhabitable.As for the tiresome “technofix” argument—you know, the one that says that because humans are the superior specie and have created such highly sophisticated civilizations, we will ultimately invent technology that will adequately reverse the “Big Four” pivotal challenges, Daniel Quinn, author of Ishmael and The Tales Of Adam, compares humans living in developed countries to people living in very tall brick buildings who every day go to the bottom of their building and remove 200 bricks and bring them to the top of the building. Obviously, such ludicrous behavior is unsustainable and will inevitably result in the demise of the building’s foundation and its collapse.Ultimately, “What A Way To Go” meanders into the root causes of our planetary nightmare: our disconnection from ourselves, each other, and the earth; the cultural stories that have been forgotten and replaced with newer, self-destructive ones about growth, domination, and hubris; the systems we have created and the addictions that feed those systems, and of course, our denial.In Part Four, “Walkabout”, we are given not hope, but the challenge of creating options, the first being, the decision to grow up, forsake our denial, and become adults. Richard Heinberg reminds us that, “We have been so infantilized by civilization that we can no longer survive without it. As all of this starts to shift and change and disintegrate and collapse there’s the opportunity, in fact, to come back to ourselves. To grow up, fundamentally, as people and as a culture.”Both Erickson and Bennett have incorporated their own children into the documentary with brief comments from Erickson’s daughter and Bennett’s son. Erickson herself states that in terms of future generations, “I think they’re going to look back and shake their heads and say, ‘What happened to those people? How did they lose sight of such basic things.’?”Earlier I used the analogy of two physicians announcing to a patient that she/he has terminal cancer, and it is appropriate here to ponder what cancer actually is, namely, the growth of cells out of control, thus the more archaic reference to a cancer as a “growth.” Growth has become for Western civilization a cancer that is destroying its inhabitants, the ecosystems, all other forms of life on earth and the planet itself. Or as the author, William Kotke notes, “Civilization is a mental/material world of culturally transmitted illusion.” Growth must cease, and it will cease, whether we choose to participate in that process or whether we don’t. Civilization will collapse, and that collapse offers opportunity as well as crisis. It may occur suddenly, or it may transpire as the economies and infrastructures of developed nations are hollowed out over time.Appropriately, Bennett and Erickson have chosen the subtitle, “Life At The End Of Empire.” In his recent book Nemesis, historian Chalmers Johnson notes that an empire and a democratic republic are inimical to each other. Where one exists, the other cannot. If a nation chooses empire, its democratic republic will dissolve and ultimately perish. Should it choose to retain democratic republic, it must forsake empire; it cannot have both. The United States has chosen empire, and its citizens are allowing the shredding of its Bill of Rights and the evisceration of its civil liberties. All empires inevitably collapse, and everyone reading these words is living that collapse in this moment.At this writing, world financial markets are reeling from yesterday’s sell-off bloodbath in China and Europe. The day before, a U.S. government auditor warned that U.S. debt to other nations is spiraling out of control. Virtually every project of Western civilization is unsustainable, especially its debt. An equally frightening but enormously important documentary that every thinking American must see is “In Debt We Trust” which illumines another locomotive out of control, imminently headed for a bottomless chasm. While I don’t wish to prognosticate that this week’s plunge of financial markets is the beginning of that economic train wreck, I know that the centralized financial systems which manage the United States government are behaving like the individuals mentioned above who carry the bricks from the bottom of their building to the top of it, leaving the foundation in peril of collapse. The fundamental difference is that when the American people behave in such a manner, they remain in the building and will be victimized by the collapse, whereas members of centralized financial systems have helicopters waiting at the top of their buildings which allow them to abscond with the bricks, turn them into gold, and deposit them offshore.While no one wishes to jump off the ledge like the one on which the man at the beginning of “What A Way To Go” has perched himself, there is a sense in which all of us must either jump or have something far more momentous than our physical existence annihilated. The documentary quotes Andre Gide:One does not discover new lands without consenting to lose sight of the shore for a very long time.In the final moments of the documentary, Bennett offers an invitation to the viewer: “Let’s jump off the train and build a boat…a lifeboat, an ark, a galleon of adventure and imagination destined for unknown lands. Build it now. The ice is melting. The waters are rising. We’re going to have to let go of the shore.”Bennett concludes the documentary by stating that he doesn’t know if he will survive the collapse but that he is committed to showing up in the world and telling his truth. It’s almost as if his physical survival is much less urgent than that commitment—in which case, I must concur with his and Erickson’s message: What a way to go!-###-March 1, 2007 Carolyn Baker, Ph.D. is author of a forthcoming book, COMING OUT FROM CHRISTIAN FUNDAMENTALISM: Affirming Life, Love and The Sacred. Her recent book U.S. HISTORY UNCENSORED: What Your High School Textbook Didn’t Tell You is available at her website: http://www.carolynbaker.org.Permalink 3 VoicesComments, Pingbacks:Comment from: Daniel Smythe [Member] · http://seeking-utopia.blogspot.comGreat review. Obviously a great doco. We who can see keep hammering at the thick walls that surround most people’s minds but with little effect. It’s like sitting on the deck of the Titanic waiting for the inevitable, unpleasant end.Permalink 03/01/07 @ 15:37Comment from: sushil_yadav [Member]The link between Mind and Social / Environmental-Issues.The fast-paced, consumerist lifestyle of Industrial Society is causing exponential rise in psychological problems besides destroying the environment. All issues are interlinked. Our Minds cannot be peaceful when attention-spans are down to nanoseconds, microseconds and milliseconds. Our Minds cannot be peaceful if we destroy Nature.Industrial Society Destroys Mind and Environment.Subject : In a fast society slow emotions become extinct.Subject : Scientific/ Industrial/ Financial thinking destroys the planet.Subject : Environment can never be saved as long as cities exist.Emotion is what we experience during gaps in our thinking.If there are no gaps there is no emotion.Today people are thinking all the time and are mistaking thought (words/ language) for emotion.When society switches-over from physical work (agriculture) to mental work (scientific/ industrial/ financial/ fast visuals/ fast words ) the speed of thinking keeps on accelerating and the gaps between thinking go on decreasing.There comes a time when there are almost no gaps.People become incapable of experiencing/ tolerating gaps.Emotion ends.Man becomes machine.A society that speeds up mentally experiences every mental slowing-down as Depression / Anxiety.A ( travelling )society that speeds up physically experiences every physical slowing-down as Depression / Anxiety.A society that entertains itself daily experiences every non-entertaining moment as Depression / Anxiety.Fast visuals/ words make slow emotions extinct.Scientific/ Industrial/ Financial thinking destroys emotional circuits.A fast (large) society cannot feel pain / remorse / empathy.A fast (large) society will always be cruel to Animals/ Trees/ Air/ Water/ Land and to Itself.To read the complete article please follow either of these links :http://www.planetsave.com/ps_mambo/index.php?option=com_simpleboard&Itemid=75&func=view&id=68&catid=6http://www.earthnewswire.com/index.php?option=com_forum&Itemid=89&page=viewtopic&t=11sushil_y.permalink 03/02/07 @ 20:33

I have it: doo-doo economics.

Brilliant!

The situation in Paris was a feature story this evening on BBC America.SWK

Blast their damnable hides. I’m sick of rhetoric and posturing while the gangster billionaires keep stuffing other people’s money into their pockets. These thieves have stolen billions from the people and all the Banker-in-Chief can do is put on a stage show, probably written by Astroturfer Axelrod, and ASK these Simon Legrees to show SOME restraint and show SOME discipline and show SOME sense of responsibility. “Don’t be greedy, boys. Be sure the people have enough left to pay their taxes, boys. Congress has to eat, boys.”What a lousy show. Obama stands there — waiting for the bailout bombs to arrive from Pelosi’s ol’ pork-packed- politics gift to the bankers – all the while posing within arms’ reach of the NY Federal Reserve banker-bailout expert, sometimes referred to as the IRS-Tax-Cheat-In-Charge. What kind of nerve does it take to blame Wall Street in the presence of the man who on the day he was confirmed caused Wall Street to shoot up because it knows the money is going to keep flowing?Talk is real cheap. Deduct the bonuses from the taxpayers’ money you gave them. Otherwise, just Shut Up!

war is not that necessary.see the next bubble: Priming the markets for tomorrow’s big crashhttp://www.harpers.org/archive/2008/02/0081908

I guess they don’t want to give the American public any ideas about mass action on mainstream American media. “Just move on, nothing to see there.”

This past generation of leaders has been raised and educated without looking at the near or long term future of their actions, without hindsight or foresight; but rather, instant gratification, vanity, greed, selfishness and non critical thinking; Well guess what? As the late John Lennon once sang: “Instant Karma is gonna get you!”

If you look at the graphs of credit card debt and the square footage of self-storage units in the US, they are almost and exact match. People are charging crap, then putting it in storage.

Hmm.. maybe I can take a crack at this.The reason why the FedRes has to buy UST is because no one else would want to. If the FedRes do not step in to fill the gap, long end rates in the US will shoot sky high. In order to prevent this, the FedRes has to monetise debt (ie PRINT MONEY) to buy the treasury bills that no one wants. The result of this can be catastrophic. The US$ can potentially collapse on this unhindered quantitative easing. And the world might decide that it is better off conducting trade with another currency. If that is the case, the likelihood of a USA insolvency will have gone up dramatically. And the likelihood of confiscation of gold in the USA will have gone up similarly.The FedRes is adopting policies best described as insane. But hey, I am not American. I think we are closer to a currency crisis that anyone thinks. Throughout history, this sort of reckless monetisation of debt has led to something far worse than a run-of-the-mill depression: a hyperinflationary depression. And yes I know, Japan did not experience that. I have a counter argument for that. Japan did create massive inflation. It was just not in Japan (aka the Carry Trade). In an open capital system, monetary expansion can leak externally if the country has massive trade surpluses. That was the case in Japan. They just inflated everyone else but themselves.This will not be the case in the US. Massive trade deficits argue for an armageddonish result if the path of reckless monetisation of debt is taken.

Absurd??? Scolding?huh scolding??? more like subtle criticism..are reporters losing their minds??We know Putin is “cooking” his books, but his speech was good, and compared to other “guys” he’s telling the truth———————————————————http://www.bloomberg.com/apps/news?pid=20601068&sid=aN2J7GEHTNrM&refer=economyInvestors Say Nyet to Putin’s Ruble After ‘ABSURD’ Davos SpeechJan. 30 (Bloomberg) — Investors delivered a verdict on Russian Prime Minister Vladimir Putin’s economic policies less than 24 hours after he rebuked the West at Davos for sparking the worst crisis since the Great Depression.The ruble fell 3.5 percent against the dollar yesterday, capping the biggest two-day plunge in a decade, following Putin’s SCOLDING of U.S. financiers and policies at the World Economic Forum in the Swiss resort town.———————————————————http://online.wsj.com/article/SB123317069332125243.html#articleTabs%3DarticleThe following text is a transcript of Russian Prime Minister Vladimir Putin’s speech at the opening ceremony of the World Economic Forum in Davos, Switzerland.Good afternoon, colleagues, ladies and gentlemen,I would like to thank the forum’s organisers for this opportunity to share my thoughts on global economic developments and to share our plans and proposals.The world is now facing the first truly global economic crisis, which is continuing to develop at an unprecedented pace.The current situation is often compared to the Great Depression of the late 1920s and the early 1930s. True, there are some similarities.However, there are also some basic differences. The crisis has affected everyone at this time of globalisation. Regardless of their political or economic system, all nations have found themselves in the same boat.There is a certain concept, called the perfect storm, which denotes a situation when Nature’s forces converge in one point of the ocean and increase their destructive potential many times over. It appears that the present-day crisis resembles such a perfect storm.Responsible and knowledgeable people must prepare for it. Nevertheless, it always flares up unexpectedly.The current situation is no exception either. Although the crisis was simply hanging in the air, the majority strove to get their share of the pie, be it one dollar or a billion, and did not want to notice the rising wave.In the last few months, virtually every speech on this subject started with criticism of the United States. But I will do nothing of the kind.I just want to remind you that, just a year ago, American delegates speaking from this rostrum emphasised the US economy’s fundamental stability and its cloudless prospects. Today, investment banks, the pride of Wall Street, have virtually ceased to exist. In just 12 months, they have posted losses exceeding the profits they made in the last 25 years. This example alone reflects the real situation better than any criticism.The time for enlightenment has come. We must calmly, and without gloating, assess the root causes of this situation and try to peek into the future.

m,yes. i also have had this dvd for a while. i viewed it again today and i have to say as time goes by it becomes more relevant and prescient. i wish more people would see it to understand the context and dimension of the issue/problem. many people are just asking and trying to solve irrelevant questions. wasting our energy on the wrong things seems to be what we do best.?a quick thought experiment..what happens if you eat both pills?or peyote? or both pills and peyote?hmmmm.maybe you see something like reality.?probably dangerous.

Why that’s jest B.S. from a Commie!The U.S. of A. is number 1! Pray for our troops! God is on OUR side!Now get out of my way as I finish this beer and try parking my SUV!Mark

Ahhhh! Bridge Bank to Hell…

lol!

Excuse me, and maybe I am out of anything to do, but doing a fast count, I count 129 posts here, not the 54 as registered, making mine 130. You know, something just didn’t seem right…like getting back a few pennies from a $5 when you buy a mocha frappuccino.

You need to know that in normal times, the FedRes can influence the long end maturities simply by manipulating the short end. When a sound and healthy banking system is in place, if the Fed drops their FFR target, banks and other yield-curve riders would bring the long end down too, but not proportionally, ceteris paribus. As you surely know, we are far from having a healthy financial system. The FFR target per se is meaningless if its manipulation does not affect the yield curve (both long and short) in the desired direction. You also need to know that the FFR represents only a fraction of the building blocks of market interest rates and yields (both short and long). In times when one or several risks are highly priced (such as during an inflationary period, market turbulence, credit freezing) the corresponding risk components of interest rates and yields become overwhelming of all others, including the FFR (hence the difficulty to have any significant impact on market rates and credit unfreezing thru the FFR; you should remember that probably the only instance when a Fed’s action yielded a relative drop in long mortgage rates was when they announced they are buying and backing a huge amount of mortgage bonds).As of bonds, you should make a distinction between yields and prices, between first time buyers, holders and sellers, and between those who just trade, those who buy and hold until maturity and those who roll them over. In the case of long bonds, the liquidity of the market is insured because most players do not hold the bond until maturity. In these cases, the market price of the bond is extremely important. The market price of a bond is inversely related to its yield; that is if the Fed buys long bonds in big amounts, bond yields would tend to go down, but their price would tend to go up. For someone who has been holding long bonds before the Fed’s action, that would be the ideal time to sell and make a profit. But your question is appropriate, since buyers of bonds at the same time or after the Fed’s action would be probably buying at the peak of the market. One might argue that a part of bond buyers are not yield/profit sensitive (but I do not believe much in that). There is a second effect however, that could be playing; market participants would perceive such an action highly inflationary, which would drive rates up. Therefore, based on these two upward pressures (less buyers and inflationary expectations) it would seem that if the Fed starts buying long bonds, the more it buys, the more it needs to buy.As of bankers, I hope justice will be served on earth first.

Wolf…I think I get it. Mr. Bernanke doesn’t need me to buy USTs because he prints his own money. And, the reason I don’t want to buy USTs is that they don’t pay enough interest to even tap inflation. Otherwise I would buy some. Isn’t this immoral of Bernanke, to play Mr. Market and force interest rates under water so the banks can have free money to loan out, if they can, on interest, i.e., to make money? I’m getting tired of playing money games with Mr. Bernanke: he uses loaded dice and just prints himself more money as it runs out – I work long hours for my money and he always takes it with inflation. That’s unfair.What’s wrong with me making money on interest, instead of Jamie Dimon and Stephen Friedman? And why’s it right for Mr. Bernanke to print free money, and not right for me?

Hidden Bonuses Enrich Government Contractors at Taxpayer Cost (excerpt)As the federal government’s $700 billion bailout of banks sputters, there’s an object lesson for the new administration of President Barack Obama: Federal departments, including Treasury itself, routinely squander tens of billions of dollars a year in taxpayer money as they farm out public business to private corporations.Obama, like presidents before him, said during his bid for the White House that he wanted to curtail waste in government. With contracting, he faces a mismanaged system that accounts for almost 40 cents of every federal dollar spent outside of mandatory obligations such as Social Security and Medicare.When compared with all federal contracting, just a fraction of U.S. spending waste comes from so-called earmarks, which elected officials often criticize as the unnecessary pet projects of politicians.The “Bridge to Nowhere” in Alaska, for example, had a price tag of $398 million. By contrast, the government spent $368.4 billion on all contracts in 2008, and Republican Oklahoma Senator Tom Coburn estimates that about $100 billion of that was wasted.U.S. spending on 3.7 million contracts in 2008 represented an increase of 76 percent over 2000 levels.“We have a broken, broken system that rewards incompetence,” says Coburn, 60, who has been examining purchasing breakdowns since his election to Congress in 2005. “We need to totally change contracting.”Bureaucrats, not elected officials, run the U.S. purchasing system, well out of public sight. And their bosses keep the spending secret by not releasing complete contract files to the public.No AccessJust as taxpayers can’t find out how the Treasury and the Federal Reserve used the first half of the bank bailout, Americans are often denied access to public records that provide details on how hundreds of billions of taxpayer dollars are spent in contracts.Bloomberg News filed Freedom of Information Act requests with the Treasury Department, the Commerce Department and the Fed asking for documents on the bailout and routine contracts.As of Jan. 12, seven months after receiving the first request, the three agencies had provided incomplete documents with blacked-out words or nothing at all.In many cases, bureaucrats are motivated to give millions of dollars in bonuses to contractors no matter how poorly a company performs because generosity with taxpayer money may help them land better-paying jobs after they leave the government.Contractors on dozens of jobs at federal departments collected more than $8 billion in what federal auditors said were unwarranted bonuses from 1999 to 2005…http://www.bloomberg.com/apps/news?pid=20601109&sid=aYYHKPn4DOe8&refer=home

Jan. 30 (Bloomberg) — Asian stocks fell for the first time in four days, led by banks and technology companies, as a record slump in Japanese factory production and lower profit forecasts renewed concern the global slowdown is deepening…“The recession is going to be deeper than what we read to be the consensus,” said Alistair Thompson, who helps manage about $16 billion in equities at First State Investments in Singapore. “People are saying there’s going to be a recovery toward the end of the year, but the credit binge we’ve had is going to take an awful lot longer to unwind.”http://www.bloomberg.com/apps/news?pid=20601087&sid=aI9dxzPqIUu8&refer=home

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We’ll let you rent homes, as long as you’ve got a job (good luck!), just don’t attack the rich b#st#rds that set this all up. Look, over there, a distraction!Mark

And for that speech, the richly wined and dined “investors” at Davos think Putin is rebuking them? They really are just anti-Russian. Instead of accuracy, they are interested in a cold war again, and scapegoats. If a 3.5 percent drop is all they could muster for being “scolded” and “rebuked,” they are losing their clout. Frankly, it seems to me that Putin hit too close to home for them. It was a truthful speech. Such people should not be in control of forcing a devaluation of a nation’s currency that does not allow the Russian people to prepare gradually for a weakened ruble and avoid panic. Nor should such people be in charge of the world’s reserve currency.It appears these gadfly “investors” are more interested in politics and foreign policy than economics, which happens when you get people who begin to use their money monopolies to take over foreign governments and to use foreign policies as weapons. Governments should speak on foreign relations, not the money monopolists.Aleksandr Solzhenitsyn, a devout Christians who was disgracefully snubbed by Washington when he took up temporary domicile in the U.S., actively supported Putin’s assertive foreign policy. On June 5, 2007, Putin signed a decree conferring the State Prize of the Russian Federation for the humanitarian work of Solzhenitsyn and personally visited him in his home to give him the award.According to accounts, the two men shared a vision of Russia as a restored state, a state that would play a central role as a respected nation in the world community. Isn’t it time the rest of the world allows that to happen?Putin said of Solzhenitsyn: “His activities as a writer and public figure, his entire long, thorny life journey will remain for us a model of true devotion, selfless service to the people, motherland, the ideals of freedom, justice and humanitarianism.” Yes, Solzhenitsyn had spoken out against many of Putin’s policies, particularly for not removing the immunity from prosecution enjoyed by Russia’s parliamentarians, but he was free to speak. Solzhenitsyn died August 3, 2008, in Russia, where he returned after becoming disillusioned with what he considered the spiritual vacuum of the materialist West.Haven’t the New York bankers done enough to the Russian people by providing the seed money for Lenin’s communist takeover? Are they never to be satisfied?

Who said it was fair? I am not American and I feel anger at what they are doing. I am just surprised that the political backlash is not more pronouced, or is it that the majority of the US populace has no idea the consequences of his actions. Until the citizens of USA decide that enough is enough, these guys will continue to place the burden of the current grand theft on the future generations of the country.

Just watched it. Definitely passing it along–thanks for linking it!

Most the time anymore, I wonder why anyone lives in the USA. Capital gains tax is lame, so is the violent crime rate, murder & homicide rates are lame, the right to bear arms is lame, streaming income tax is lame. Why live in the USA? Also, why do all the foreigners keep on lending money to the USA??? Why don’t they just stop it! There is no point to lending money to too many idiots! There are 300 million idiots now in the USA! There should be a buyers strike, and a “redemption” if you will, of US Treasury Securities. There should be a rate surge, and a deprecaition of the US Dollar.

YES YES YES put them under. get cash with your credit cards and max everything out. Just don’t buy plastic goods.Even if you cant file bankruptcy, still do the atm thing. And if you have to walk away, do it because its only stuff. Walk out of your house holding your kids hands and smile because your holding the only thing that matters. Lets declare WAR on the banks and war on governments that do not see that time has changed and if they are going to borrow money then it must be used for healthcare, food and housing till we can adjust to the new economy, one that is harmonious with the earth. Come on pick up your pitch forks and lets throw those bastards out. John Lennon’s mind games is filling my ear space.

@Mark,Excellent teaching video. Reminds me of what Mark Twain said about our “system” over a 100 years ago when he modified the following.Battle Hymn of the RepublicLyrics by Mark Twain – he adjusted the original to send a message.Mine eyes have seen the orgy of the launching of the Sword;He is searching out the hoardings where the stranger’s wealth is stored;He hath loosed his fateful lightnings, and with woe and death has scored;His lust is marching on.I have seen him in the watch-fires of a hundred circling camps;They have builded him an altar in the Eastern dews and damps;I have read his doomful mission by the dim and flaring lamps—His night is marching on.I have read his bandit gospel writ in burnished rows of steel:”As ye deal with my pretensions, so with you my wrath shall deal;Let the faithless son of Freedom crush the patriot with his heel;Lo, Greed is marching on!”We have legalized the strumpet and are guarding her retreat;*Greed is seeking out commercial souls before his judgement seat;O, be swift, ye clods, to answer him! be jubilant my feet!Our god is marching on!In a sordid slime harmonious Greed was born in yonder ditch,With a longing in his bosom—and for others’ goods an itch.As Christ died to make men holy, let men die to make us rich—Our god is marching on.Our nation needs to go on a vision quest folks.

“According to Time Magazine (via Barry Ritholtz), since October, the government has deposited $165 billion into the accounts of the nation’s eight largest banks, which are now worth $418 billion less than they were four months ago. Also, the Congressional Budget Office estimates that the government’s preferred shares are showing a $20 billion loss, the magazine reports.”All told, the government’s annualized rate of return on its investment in the nation’s largest banks is -1,096%.”http://www.minyanville.com/articles/Paulson-government-Wall-Main-conspiracy/index/a/20866Now that is a great move; only -1,096%Congress must feel warm and fuzzy all over… hehehe – now just wait until Obama’s team Geithner, Summers and Rubin et al., and Co., get in there; we will soon experience the “sub-infinite” (pjb) of losses.Ho hum

Hey Mark and blimdman, what do you think of Richard Heinberg’s loving embrace of Virginia Abernathy and the eugenicists?

this threat is stupid. you will just guarantee no lending and no credit for next couple decades. then economy can just embrace depression for next couple decade for sure. financial companies are scare to lend to death because of guys like you that borrow with no intention to pay back. you think you are helping economy? no, you are destroying it.

Good, Wolf. Very good take on exporting inflation via the carry trade.But carry trade is based on low rates. Shouldn’t that apply to deficit countries too? At some point I would think it was unsustainable. But probably in the short term it could work.

I do not think one world government is safe on a planet that continues to allow astronomical extremes of wealth and power.

teach them what? Obama’s tongue licking those wall street crooks show? Obama is ridiculous and public embarrassment.

obama will doom USA. plus this stimulus does not creat enough jobs. most of it is keeping economy on life support. once the money is spent, Obama will be back for more stimulus. Obama’s borrow and spend will destory USA.

you mean sheep right? smartest and strongest wolves???? where??? are you delusional?

We daily despise and deride and condemn the wealthpowerful ones for their lack of a single scruple, yet we refuse to even discuss removing the carrot the least scrupulous are always going to be going after the hardest.The superrich are not the problem. The carrot they’re going after is the problem.When the bombs drop on your head, this post will be the last thing you ever recall.But it will be ok. When equal destruction rains down on the planet, you’ll have no time to regret your support for the geno-sadistic economic injustice that launched the last bright light.

The fact that matters:The current wealthpower inequality factor on earth resides in the billions. Don’t fix that, you can’t fix anything.

Wanting and having “stuff” is not a problem per se. Wanting and having more and more without limit is the problem, because nature has imposed a limit on how much you can contribute to the making of the pool of stuff from which you are partaking, and that means the pool itself is limited. The idea of being allowed to take more from the pool of wealth/workproducts than you could possibly have put in by your own sacrifice to working is the problem.Stop the paying of people based on arbitrary nonsense. Start paying people only for what creates the wealth.Equal pay for equal sacrifice = Heaven on Earth.Unequal pay for equal sacrifice = Hell on Earth and planet death.It’s not physically possible for one human to work more than about twice as hard and long as the human average, but you’re paying as if some could work billions of times the average.This is utter nonsense on steroids.

We live without adequate skepticism, mired in the poverty of our horizons.

let’s all rent rooms from the banker’s McMansions so they can afford to make their mortgage payments or are they not affected by the crisis they started?

We collectively believe that it can be all done intellectually, which holds that reason is supreme. But there is always an ignorance to the very intelligent – they have a blind spot and it will do them in.Well, sometimes when things break they are truly broken and all the Kings horses-asses and all the Kings ass-kissers can’t put Humpty Dumpty back together again. I call such an acknowledgment the Humpty Dumpty Threshold moment. We are not there yet. Stupid me – I keep waiting for these idiots to wake up and smell the coffee.

This has been driving me insane, making my blood boil, what you said: Nothing the government has done has provided “palpable confidence to the consumer, to the markets, to the global economy.” Yet, Everything it is doing is destroying all three. And it’s using our money, our resources, the world’s reserve currency, the reputation of this land.

There’s this notion that humans are inherently evil/dumb. I don’t think that that’s true. What we’ve done, I believe, it so be too compassionate (read Peter Kropotkin’s Mutual Aid). Our numbers could never come to what they have without compassion winning out over competition.The downfall for our compassion is that we have managed to overshoot long-term carrying capacity by a wide margin.Mark

Yes, but this is all predicated on growth. Growth stops and so does the paradigm. And unless we discover an alternate dimension containing lots of fresh resources, growth is done.Mark

Isn’t it what the government is doing, taking out loans that it won’t ever be able to pay back? It’s all based on moral hazard. Corrupt government creates corrupt citizenry.Mark (debt free)

But, it IS the SYSTEM that’s at the root of the problem.Mark

If nature is the greatest teacher should we wipe out 150,000 humans in a day like a natural Tsunami…………..be careful what you wish for