I have been following his masterpieces during the last two years.Hails to THE Professor.I am heavy on gold. It is THE money now, ’cause papes-fiat irredeemable curencies are exausted in trustability.

Wall Street succumbed to the same disease that brought the market down in the 1920s. The off the exchange bucket shops would take bets like a bookie and they would participate on the exchanges, most of the time to bet against their patrons.The bucket shops were not capitalized to pay off and if they took a huge gamble they had to close shop.Wall Street just constructed a much more sophisticatedOTC bucket shop concept. Sell naked CDS to speculators. Sell covered CDS to those securitized. Use the naked CDS bets and some naked shorting to attack the Companies that had obviously been hidingfraudulent underwriting in securitization. The NINJA loans in residential real estate were matched by equally crazy commercial lending and leverage buyout lending. The operators were making money constructing the fraudulent securitizations and others were going to make money destroying the holders of the securitized instruments. The BOOKIE operations part went out of control and now the BOOKIES are too big to bail.Insurance companies must be capitalized and sell when their is an insurable interest only and Bookies shouldbe illegal and all transactions must go through exchanges to give transparency of the capitalizationof the parties involved.However it is now too late, because the pyramid schemestructure is sitting there with players expecting payment and the economy paralyzed. An international conference to bring a bankruptcy proceeding to thisinsanity must be set up soon! The countries must nationalize the bookies(banks) to bring them into the international conference. A global bankruptcy proceeding.

Of course Professor Roubini is right just review all the fraudulent financial statements.Why does anyone believe any of the fraudulent financial statements? Why does anyone listen to anything KPMG or other auditors have to say? Most of the banks are bankrupt yet the financials keep rolling out, no problem. As an angry Citi investor, I have tried to piece together how I lost most of my money.KPMG audits many of the financials with all their SIV creations which are used to off load bad loans so the losses don’t have to be recognized on the financials in an Enronesque fashion like KPMG’s client Citi (which is bankrupt).Of course KPMG’s never ending quest for fees does not stop with fraudulent financials, it also purveyed what Mike Hamersley would describe as fraudulent corporate tax shelters (not withstanding Hamersley’s willing participation in many of them) used by most of KPMG’s big banks including Citi, like the REIT transaction which eliminated tax on real estate loans; back to back loans or rate swaps creating interest deductions; financing arrangements generating noneconomic foreign tax credits; the list goes on forever. All KPMG’s big banks used the strategies to eliminate taxes and create what Hamersley would describe as fraudulent book income (except of course for Hamersley’s own tax shelters).Tim Flynn is a banking guy and was brought in to purportedly clean up KPMG in 05. Yet Flynn prior to his appointment as KPMG CEO was a high level KPMG audit partner before taking over for O’Kelley and had most of his clients involved in all the fraudulent accounting and questionable tax shelters (which according to Hamersley were fraudulent).There can be no doubt about the fraud as beginning as early as 2003 many were predicting the implosion that would result from the unsustainable lending patterns of KPMG’s banking clients. In fact, most of KPMG’s banks are bankrupt, what to do?Flynn decided to throw a bunch of tax partners having nothing to do with all KPMG’s bankrupt banks under the bus for individual shelters which were miniscule in relation to all KPMG’s failed fraudulent audits.Flynn hired Bennett and Holmes to do his dirty work and assist with the DOJ. Flynn had Bennett and Holmes lie to the DOJ according to an email wherein Joe Loonan KPMG’s head lawyer stated that he did not know if any of the allegations were true (“freedom is just another word for nothing left to lose”). Then to seal the deal Flynn denied legal fees to the tax partners he threw under the bus to the DOJ, even Ernst and Young paid its partners legal fees. Why would Flynn do this after O’Kelley had promised to pay the legal fees?One can only infer to hide the greater tragedy at KPMG, all of the failed fraudulent audits (not to mention after Flynn cut his deal, KPMG was awarded the audit of the DOJ). If I were a KPMGer, I would not only be extremely concerned about all the civil litigation that is coming for the fraudulent audits but the potential criminal actions that must be coming once the books are scoured (which you know they will be in the civil litigation plus the fraud is relatively easy to discern) because KPMGer’s must know by now the first thing Flynn will do is throw you under the bus and cut off legal fees.As a decimated Citi investor I am looking for any KPMGer to come forward and tell the truth.Angry Citi shareholder

The total losses are too big to bail out!!A global bankruptcy procedure must begin soon!http://online.wsj.com/article/SB123326820233830623.html?mod=dist_smartbriefbank bailout structure1)buy written down assets from banks2)insure the rest3)recapitalize the banks more4)??give the bankers your first born???5)??give the bankers a first crack at your wife???FEUDALISM DOES NOT EXIST ANYMORE AND WE ARE NOT SERFS!Nationalize the banks, fire the head bookies, and redesign a global financial architecture to facilitatecommerce. Banking as a utility, like Taleb proposes!The banksters violated our trust and gambled our children and grandchildren’s money knowing full well the possible repercussions of what they were doing!In exchange for not lynching them, they should allow us to claw back all their ill gotten gains!!The real victims will be the poor 3 billion at the bottom of the feeding chain that will have much morehardship than us! When global commerce stops they don’t eat! We deserve what is happening to us, because we have never cared about the poor 3 billion!Karma! Karma! Karma! Read all your wisdom traditions!Our failure to care for our fellow man is like a dark cloud that will now overwhelm us. The truth must be said!

I am in the commercial realestate industry and me and my father saw this coming along time ago. I operate in the south Florida and southeast US low income multifamily market. All of our deals where underwritten with conservative low leverage loans, all the while other companies where leveraging deals 90% LTV because they beleived this market was endless. There was too much easy money chasing grossly over priced assets, lack of liquidity control created this problem and it won;t be solved until assets are discounted significantly so that investors with money can steal deals again, we will continue to wait with cash on the sidelines until then. TD

If only people knew…that the great equalizing, the great escape from our self-perpetuating ever-greater extremes of wealth-and-power will make us a thousand times safer and happier, they would stop resisting the inevitable return to sanity in time to have a future.

We need Robin Hood but we keep voting for the Share-iffs of NothingInHand.

U.S. House Panel Approves Mortgage Measurehttp://online.wsj.com/article/SB123309817136221693.html”once we accept that sanctity of mortgage loan contracts can be vitiated by bk judges, it’s only a small step for news rules to come forth that force mortgage securities owners (such as NLY) to “loss-share” in mortgage losses”"{this will destory USA mortgage. perhaps not just cramdown on mortgage but all kind of loand. this will destroy USA lending and credit.”cramdown will destroy any ounce of credit and lending in USA.

To be safe, the wise King keeps his wealth spread throughout the coffers of his countrymen. He knows his most reliable guard is having their true affection.

My predictions from 2 months ago…. these seem tame now, but most are/will be coming true now… Reality and facts should not be misconstrued as doom and gloom…I have a question for everyone? What can anyone do about any of this or for thier own famalies? I’m at loss other than cut expenses and conserve cash, at least while it’s still woth something…1. 1500 banks go away- in progress- Citi in trouble- BOFA too2. 200,000 store closings – in progress- Gottshcalks Bankrupt3. Dow at 5000 possibly 4000 -stays propped up by continued Govt purchases of shares and preferred shares- do not use as gauge of how economy is doing- http://www.guardian.co.uk/business/feedarticle/82601014. S&P at 500 possibly 400- http://www.guardian.co.uk/business/feedarticle/82601015. Mortgage rates for new homes go to 3% and resale’s/refi’s at 3.75% – pushed by Obama6. Tax credit of at least 25k for home buyers7. Chrysler is gone by March.8. GM goes under by Sept.9. GE files bankruptcy – http://clusterstock.alleyinsider.com/2009/1/gm-gm-we-still-cant-rule-out-bankruptcy10. Calf state budget deficit hits 50 Billion- presently 41B11. All states and local gov’ts approach 300 billion deficits combined12. Massive state and local gov’t layoffs nationwide13. official unemployment hits 13%, unofficial unemployment hits 25% – current: http://clusterstock.alleyinsider.com/2009/1/jobs-numbers-much-worse-than-you-think14. Gas prices hover around 1.50 gallon unless there is major Mideast/Pakistani/Indian crisis then it goes to 5.00 quickly15. GDP shrinks at 6-8% for 200916. Deflation takes strong hold until sept 2009, at which point hyperinflation is roaring by dec 2009. – Update Jan30http://clusterstock.alleyinsider.com/2009/1/hyper-inflation-threat-cannot-be-dismissed-analystshttp://clusterstock.alleyinsider.com/2009/1/full-text-of-bernankes-speech17. US Dollar continues slow decline against Yen, Euro, Pound and Yuan – losses 50% by Dec 200918. 2009 Federal deficit hits 2 Trillion – Update: 1st qtr almost 500 Billion19. total Bailout and govt assistance programs approach 15 trillion from when it started in summer of 2008- currently at 8 trillion – http://www.bloomberg.com/apps/news?pid=20601087&sid=at6cYfv8wFJw&refer=home20. Total US liability approaches 60 Trillion by 200921. bond market collapses22. US treasuries become almost worthless23. China pulls the trigger and demands we pay back what we owe or they stop shipping goods to us or cut prices dramtically -(LONDON, Jan 15 (Reuters) – Societe Generale said on Thursday that the United States’ economy looks likely to enter a depression and China’s could implode.In a highly bearish note, veteran cross asset strategist Albert Edwards said investors should now cut equity exposure after a turn-of-the-year rally and prepare for a rout.He predicted that the S&P 500 index of U.S. stocks could be set for a fall of nearly 70 percent from recent levels.Edwards also raised the danger of a global trade war with China.”While economic data in developed economies increasingly reflects depression rather than a deep recession, the real surprise in 2009 may lie elsewhere,” Edwards wrote.”It is becoming clear that the Chinese economy is imploding and this raises the possibility of regime change. To prevent this, the authorities would likely devalue the yuan. A subsequent trade war could see a re-run of the Great Depression.”Edwards has long been one of the most bearish analysts in London, first with Dresdner Kleinwort and then with SocGen.But he called in October for clients to increase their exposure to equities, which he said were due a rebound.”We believe that the market is (now) set to quickly slide sharply towards our 500 target for the S&P,” he said.The S&P 500 <.SPX> stock index is currently at 842, up about 14 percent since hitting a low in November.)24. Housing values decline another 15-25% from Nov 2008 levels- Calif, Fla, AZ, Nevada see even steeper declines – http://www.housingwire.com/2009/01/14/foreclosure-activity-fires-back-up-in-california-report/25. States and local govts raise taxes on everything, unless Federal govt gives them help… this is going to be ugly26. Obama starts giving states and companies relief on Medical insurance premiums and costs.. possible full nationalization of Health care system gets underway in 200927. Fed possibly nationalizes entire banking system28. More Madoffs and ponzi scams totaling 1 trillion may happen, unless they hide the losses29. approx 2 Trillion in more bad Res mortgages/losses to be absorbed by banks and govt – http://www.bloomberg.com/apps/news?pid=20601213&sid=aTtVEJqx_S2w&refer=home30. 1 in 3or4 mortgages fail. Prime and Alt A pool problem is actually worse and larger than sub prime problem – http://www.housingwire.com/2009/01/14/foreclosure-activity-fires-back-up-in-california-report/31. commercial real estate and rents fall off a cliff, 50% drop in values and 1.5 Trillion in losses.32. Obama polls on effectiveness of handling job fall to Bush levels by end of 2009 – not his fault.33. US possibly gets involved in much larger ground war somewhere to stimulate economy and jobs and deal with crisis in mid east/India/Pakistan/Russia/Korea34. Credit card Debt approaches 2 trillion in losses for banks and lenders35. the Yankees with their new 3 players they paid 1/2 billion dollars to, win the world Series, but Yankee Revenue and profit implodes and Team gets in finaiancial trouble.36. 5-10 or more major sports teams go bankrupt in 200937. something happens in later part of year to unite the country… could be good or bad..38. Govt deals with civil unrest in parts of the country…..39. people will think things are better for 1-2 months at times during the year, only to be hit over the head with more bad economic news and problems40. these problems will last until at least 2012 as Americas struggle with all the resetting going on in the economy, from wages, to housing, to buying, to energy, to living simpler… – http://clusterstock.alleyinsider.com/2009/1/depression-odds-above-5041. Entire Govt and private Corp pension system is underwater by at least 2 trillion dollars and will be huge issue for Govt to deal with in 2009 – http://www.bloomberg.com/apps/news?pid=20601087&sid=aw9HrY21Ynno&refer=home another good link: http://blogs.reuters.com/great-debate/2009/01/14/pension-assumptions-hitting-the-wall/42. NorTel goes bankrupt- I called this one in Nov.

WOLVES GUARDING THE WOLF HENHOUSEIf you as a fireman, nurse, engineer, cement worker, etc. do economists remind you of subpar soothsayers?They’d all say, “Yes”, in unison.If you as a globalist bent economist if their past predictions were adequate; they’d all say “Yes” in unison.Why do you think the GDP, Unemployment Rate, COLA come out and remind “We the People” of horrifying dart board low ball figures….because they all are. But please, don’t ask the globalist wolf economist why their data stinks.

Got a Mortgage or Credit Card? Don’t Pay Themhttp://blownmortgage.com/2009/01/29/got-a-mortgage-or-credit-card-don%e2%80%99t-pay-them/ultimate morale hazard. irresponsible borrowing and default will destroy any form of lending and credit. credit is tight? you aint see nothing. you know nothing. if everyone just borrow and default, then no lending and no economy. Depression will come under the clown Obama’s leadership.

Oh, but Americans have never cared — individual Americans. They have given more to help others around the world than any other people: they have shared their agricultural and technical knowledge, they have opened opportunities to the hopeless — and I’m talking about individuals, such as the potato grower I know who traveled to Poland on his own dime to show those proud but politically victimized and newly freed people how to advance their meager crops into productivity. We’re not all international bankers; we’re not all motivated by greed. If we were, man would be extinct.IMO, America’s individual enterprise and religious heritage have played a part in this charitable philosophy and I think that religious people and conservatives are too often maligned for their alleged parsimony.A poll about two years ago quoted in the liberal AARP, showed that conservatives contribute nearly 90% of all charitable giving.In his book “Who Really Cares,” Arthur C. Brooks, a professor at Syracuse University, reveals “in 2000, religious people gave about three and a half times as much as secular people.” And even when religious giving is excluded from the numbers, Brooks found religious people still give more per year to nonreligious charities…“Byron R. Johnson, a sociology professor and co-director of the Institute for Studies of Religion at Baylor University, says he recently gathered data that show similar results — such as high levels of civic engagement among religious people…””’It was not surprising to me that the lil ol’ farmer in South Dakota outgave people in San Francisco,’ Johnson says…Brooks says the data show that religious people, on average, give 54 percent more per year than secular people to human-welfare charities — work focused on charity and not religion…The Rev. Jim Wallis, a Christian writer and political activist, says “spending by government on welfare and social-service programs dwarfs the money that donors and foundations bring to the table.http://philanthropy.com/free/articles/v19/i04/04001101.htm

Me, too, puzzled, still. Why put Al Capone in charge bank vault?

Let ‘em keep it up. Let it break. Then we can get down to rebuilding, without ‘em hanging on our necks. The whole pack is nothing but, as A. Bierce put it, “A strife of interests masquerading as a contest of principles, a conduct of public affairs for private advantage.” Justice and her judges in America have become nothing but a commodity for sale.

The ThiefThe law doth punish man orwomanThat steals the goose from offthe common.But lets the greater felonloose,That steals the common fromthe goose.[Anonymous: 1764]

FBI knew about fraud in mortgage industryPaul Shukovsky, Seatlle Post-Intelligencer – The FBI was aware for years of “pervasive and growing” fraud in the mortgage industry that eventually contributed to America’s financial meltdown, but did not take definitive action to stop it.”It is clear that we had good intelligence on the mortgage-fraud schemes, the corrupt attorneys, the corrupt appraisers, the insider schemes,” said a recently retired, high FBI official. Another retired top FBI official confirmed that such intelligence went back to 2002.The problem, according to the two FBI retirees and several other current and former bureau colleagues, is that the bureau was stretched so thin that no one noticed when those lenders began packaging bad mortgages into bad securities.”We knew that the mortgage-brokerage industry was corrupt,” the first of the retired FBI officials told the Seattle P-I. “Where we would have gotten a sense of what was really going on was the point where the mortgage was sold knowing that it was a piece of dung and it would be turned into a security. But the agents with the expertise had been diverted to counterterrorism.”The FBI not only lacked the resources, but also never got the tips it needed from the banking regulatory agencies. The Securities and Exchange Commission, the Office of Thrift Supervision and the Office of the Comptroller of the Currency also failed to detect the securities issue, said the first retired FBI official. . .Both retired FBI officials asserted that the Bush administration was thoroughly briefed on the mortgage fraud crisis and its potential to cascade out of control with devastating financial consequences, but made the decision not to give back to the FBI the agents it needed to address the problem. After the terrorist attacks of 2001, about 2,400 agents were reassigned to counterterrorism duties.

As Lenin said, and you express it well, “Our program necessarily includes the propaganda of atheism.”

Do not confuse religion with spirituality. Religion is the opiate of the masses. Spirtuality is not. Religion stands between man and his god(s).

Guardian, UK – Britain’s biggest polluting companies are abusing a European emissions trading scheme designed to tackle global warming by cashing in their carbon credits in order to bolster ailing balance sheets.The sell-off has helped trigger a collapse in the price of carbon, making it cheaper to burn high-carbon fossil fuels and leading to a fall in the number of clean energy projects. The moves were seized on by environmentalists and other critics who have previously criticized the European Union’s ETS for delivering more windfall profits for business than climate change.Steel, concrete and glassmakers are believed to be the main sellers along with financial speculators such as hedge funds. The sell-off of the pollution permits has led to carbon prices plunging 60% . . .Environmentalists expressed anger last night about the way the ETS was being used. “The ETS has bowed to corporate self-interest at every stage of its design and implementation, so there is no surprise that it is now being used as a cash cow to see firms through a difficult financial phase,” said Oscar Reyes, a researcher with Carbon Trade Watch.

I meant Vladimir Lenin, not John Lennon, you know the “Imagine all the people sharing all the world” guy you quoted, although there’s not much difference:Imagine there’s no HeavenIt’s easy if you tryNo hell below usAbove us only skyImagine all the peopleLiving for todayImagine there’s no countriesIt isn’t hard to doNothing to kill or die forAnd no religion tooImagine all the peopleLiving life in peaceYou may say that I’m a dreamerBut I’m not the only oneI hope someday you’ll join usAnd the world will be as oneImagine no possessionsI wonder if you canNo need for greed or hungerA brotherhood of manImagine all the peopleSharing all the worldYou may say that I’m a dreamerBut I’m not the only oneI hope someday you’ll join usAnd the world will live as one.Or, as another of the commies put it, “Communism is not love, Communism is a hammer we use to crush the enemy. That was Brother Mao, in Time Magazine – December 18,1950.If there’s a choice between George Washington and the Lenins/Lennons, I’ll take George, thank you.

This is what happens when I have too much time on my hands:With all due respect to the Ramones – From “I Wanna Be Sedated”Eight hundred twenty billion more dollars to go – I want them regulatedprint so much money with no hope of control – I want them regulatedjust put them out to pasture, let them take the lossthen let’s put in place, a competent new bossthey can’t control their actions, they think they’ve done no wrongoh no no no no noEight hundred twenty billion more dollars to go – I’m totally frustratedScrew old Phil Graham and all the problems he’s caused – I’m totally frustratedLet’s take away their savings, let’s take their private planesHurry hurry hurry before I go insanethey can’t control their actions, they think they’ve done no wrongoh no no no no noEight hundred twenty billion more dollars to go – I want them incarceratedno hope for recovery for the everyday Joe – I want them incarceratedlet’s put them all in jail, they don’t deserve no breaksmake them room with big angry men, looking for new matesThey deserve to be prison bitches, for all the shit they’ve causedoh yeah yeah yeah yeah yeahBa-ba-bamp-ba ba-ba-ba-bamp-ba – I want them regulatedBa-ba-bamp-ba ba-ba-ba-bamp-ba – I’m totally frustratedBa-ba-bamp-ba ba-ba-ba-bamp-ba – I want them incarceratedBa-ba-bamp-ba ba-ba-ba-bamp-ba – I want them violated!

It’s time to watch again this powerful comment recommended this week by Gloomy!!http://www.youtube.com/watch?v=pZsY1rFr_yw

But why does that video draw the conclusion that the central bankers don’t know what they’re doing? I think they know what they’re doing and they’re doing it anyway! Just like Greenspan did!

The Russian commies gave their lives in the millions in world war 2 to save you from the fascists – but maybe you forgot that bit?I’m not a communist, but enough with the red-baiting. Falling for that ruse has cost us enough in the past, you’d think we’d learn a little something from history.

Ouch! I just lost a big post:-)First on the subject of this thread: The Professor’s vindication.IMHO, picking the analyst(s) who had it right, the winning horse, didn’t require rocket science. No astronomical IQ needed, just a tad above chimp level would have done the trick, as long as honesty and not having a vested interest in hiding the truth so that cashing in your BIG FAT BONUS (e.g., AIG’s Mr. Frenkel) wouldn’t be jeopardized.Second, on this week’s market outcome:I posted this over the weekend:The latest from Mauldin is a very good one. He is A LOT more bearish than he has been lately. I think he is a bit depressed (who wouldn’t after writing about diz stuff?)http://www.investorsinsight.com/blogs/thoughts_from_the_frontline/archive/2009/01/24/here-comes-tarp-3-and-4.aspxHide reply Reply to this comment By Octavio Richetta on 2009-01-25 06:15:18Thank you for the post Octavio!1)secutization was the true lending source and the banks were intermediaries that can’t bring lending to the levels securitization allowed. A replacement to securitization is needed.2)FDIC is at risk from banks being forced to lendwhen conditions are risky.3)debt restructuring is indispensable to bring the debt values in line with the diminished asset values and the intermediators and investors must take losses.Mauldin lays out the problems that are not really being dealt with sufficient speed. I can see why Octavio calls this pessimistic. The policy makers are not discussing these points and we are in somekind of banker’s denial that they screwed things up so bad that the whole system has to be rebuilt from scratch.Hide reply Reply to this comment By Guest on 2009-01-25 09:09:11excellent summary! + U R rite. If you combine the capabilities of a broken financial system with a sliding economy and a cornered US consumer, I just don’t see a way out. I guess Kasriel & Co. know/see something I don’t. I am a bit depressed too.Let’s see how the last week of January goes. The potential for a further slide into the November lows is quite likely. Unlike BG I have no need to talk my book:-)Reply to this comment By Octavio Richetta on 2009-01-25 11:05:26Those of you who follow my posts will agree that this is not selective picking; this is the only post in which I make a clear short term sentiment call about this week’s outcome.After the Wednesday close, when I hit a 3.06% return YTD, I thought I had been overly pessimistic in my call, but unfortunately, it looks like I was right in the money. Unless we fall in a bottomless pit in the last hour of trading, it looks like I will close January at around a 1.5% return. ALL the stocks I bought late last week/early this week. Are now trading lower: MSFT, PG, MO, PFE. Should have stuck to dollar cost averaging:-)

But that’s what we do now. I take from you so that me and mine are provided for. When there is the inevitable disagreement over definitions of ‘justice’ then I need to make sure I can defend myself against anything you might throw at me. If it’s all about Love yourself, then why do I care what happens to the rest of the world so long as me and mine are safe?

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXOne important point that Roubini makes is that THE FINANCIAL SYSTEM IS COMPLETELY INSOVENT.Although initially more expensive, if the government had bought bad loans from financial institutions and basically financed these loans by issuing debt, in the end the recession would end sooner and be more mild. Three situations would be very different:1. Because of the write-offs, Banks would be sound but smaller, there would probably be a more intense consolidation move, but in the end institutions would be ready to lend.2. The economy as a whole would benefit from this improved money circulation, and especially businesses would be able to raise operating cash.3. Consumers would have more spending money and because the economy would improve faster, less jobs would be eliminated.But instead, the government chose to do some shady sponsored consolidations with the first economic package. Now, banks are STILL insolvent which means the whole financial and banking system is barely functional. If the size of the hole is $2.2trillion, $850b. are not going to be enough. The WHOLE world is poised for a sharp landing, and stop thinking China will still grow 6.5%!XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Tell that to a starving man who’s sharing the bread of a good Samaritan. What you say is hypocritical. Your sophistry is indigestible, a word racket. Where, in what you say, is truth?Charity is not simply giving of money for a good cause. It is not just giving of ones personal goods to feed the poor. Charity is love — the love that men have toward other men, toward their weaker brothers, toward strangers; it is hospitality without grudging, love that suffers along with others and is kind; love that does not seek its own way, love that is not easily provoked and that does not rejoice in the iniquity or suffering of others, a charity that bears and hopes and endures.Without charity, men are animals with no more meaning nor significance than other animals — indispensable “human resources,” corralled like sheep by the rule of the whip, survial of the fittess.

Hopefully it will work for you but don’t be surprised if the coming change will render stashed cash useless. Try getting wealthy in a socialistic system and capitalism isn’t worth saving at the expense of people being hungry and homeless just so a few people can go buy up all the real estate.

http://www.cnbc.com/id/28935289Bad bank is running into problemsDavid Roche and Julian Robertson were on CNBC and were very clear about a temporary Nationalization of Banks and theimportance of selling the Troubled Assets at market price.It may be worth a little effort to flood the White House withobjections to the BAD “Bad Bank”. I have a feeling that Obamais being advised from outside the coccoon of Geithner and Summers. Somebody is getting to him and he may be gettingto hear rational arguments from Roubini and Taleb. I would love video from their meeting last night. I believe they were supposed to have had presentation after a dinner last nightin Davos!GET ON THE PHONE! YOU HAVE DONE IT BEFORE!

Exactly Roubini is a smart guy who obviously does have a conscience but realizes he can’t burn bridges with the folks in power so he can hopefully influence them to do the right thing instead of following their traditional Geitner/Paulson like selfish tendencies. At this point people like Geitner want to pillage the U.S. tax payer but are starting to become afraid of the consequences. They’ve coined a dozen or so new terms to see if they’ll fly or be good disguises for the robbery they want to commit and so far the public has been enraged and not fooled by any of them. They are now desperate to save bank shareholders but are too scared to do it!

Preface: This is just a little tirade I went on in an e-mail trying to explain my views on certain aspects of the financial crisis to my (relatively economically uninformed) brother. I thought my fellow RGE’rs would enjoy. Feel free to critique as well:”This whole notion of “under no circumstances can the banks be taken over by the government,” this dread of the word “nationalism,” and all the paranoia about socialism that it is inducing, is just idiotic and destructive. Sure, the idea of the government trying to own and run these companies for years down the road is a dumb one, but that’s not what I’m talking about. In my opinion–which is essentially just echoing Blodget and a number of others–we absolutely need the government to come in, take these banks over, WIPE OUT THE SHAREHOLDERS, essentially wipe out the bondholders or convert them to equity, DRAMATICALLY WRITE DOWN THE VALUE of these junk assets, and then make a decision with each bank–if it is obvious that the bank is a worthless piece of crap after you write down the assets to realistic levels, then get rid of it. Liquidate it and sell off its good pieces. Scrape together whatever value you can. If it’s in relatively good shape after the write-down, then maybe recapitalize it by putting some taxpayer money in, and then basically sell it back to the market–allow equity investors to buy shares in it and effectively allow it to go back to being a private (read: non-government operated) company. Shareholders can move forward knowing that they are investing in a clean bank with none of the crap on its balance sheet, and they don’t have to worry about the end of each quarter meaning yet more billions of dollars in losses/writedowns.Instead, this abject horror behind the idea of nationalization is just causing us to take the worst possible course of action. We deny reality, allowing banks to do everything they can to avoid marking the assets to market (aka writing them down drastically as they should) for as long as possible. We keep up this charade that the worst is behind us, until the next quarter rolls around, when once again, each bank reports MASSIVE losses and MASSIVE writedowns (yet not nearly massive enough to reflect the true, crap value of the assets). Of course, once this happens, stockholders sell off, everyone gets worked up, and then the government comes in with another ridiculous bailout, that not only gives these banks boatloads of taxpayer money, but still protects the banks’ stockholders and bondholders!!! These people knowingly invested in risky assets, and yet the government is doing everything they can to protect them by using our money!! It’s patently absurd… my blood pressure is rising as I write this!! And we do it all in the name of free market capitalism. What a joke. We avoid fully “nationalizing” them because we want to preserve them as private entities (Geithner recently had a quote to this effect), and all this ends up doing is wasting our taxpayer dollars, and ironically, socializing the losses!! It’s the worst of both worlds–we as taxpayers get virtually none of the upside, yet we are the ones who have to pay up when these banks need money because of their idiotic/irresponsible behavior. What’s more, this is exaggerated by the absolutely terrible structure of the bailouts. I forget the exact details, but with the Citi-specific bailout, the taxpayers get something like $20B in preferred stock, but we are guaranteeing something like $300B of their potential losses!! $300B that I would say is very likely to be realized!! So we invest $20B in this garbage company, in exchange for standing ready to pay out up to $300B?! That’s the best deal the government could get? Garbage!!And this bad bank idea has the same fundamental issue as the original TARP proposal. The taxpayer is inevitably going to get hosed. It can go one of two ways, but in reality it is only going to go one way:1) What WON’T happen–we pay the RIGHT price for these assets (aka the market price, what its currently trading at, reflective of the actual return prospects of these assets, and the value that these banks absolutely refuse to write down the assets to). Doing so will basically prove that many of these big banks are insolvent. Why? Because right now, they are showing these assets on their books at artificial levels. Through the nonsensical magic of accounting, these companies have ways to reclassify these assets in such a way that they are not reflecting their mark-to-market value. Typically, the value of these assets are showing up on their balance sheets at some grossly inflated level that is backed by some spreadsheet model that still retains the ridiculous, pie in the sky assumptions of yesteryear that we now know to be patently absurd. This inflates the asset side of their balance sheet, making it seem like the ratio of assets/(debt + liabilities) is actually within reason. However, if we pay the appropriate price for these assets, they’d be forced to replace those pie in the sky asset values with the pitiful amount of cash they received in exchange for them. This would reflect the reality of the situation–their assets would be worth crap in comparison to the cost of their debt and liabilities.Of course, the government (under both administrations) is still in all-out denial mode, and has consistently treated the American public like little kids. They want to placate us and tell us that everything is just fine, and that we can restore this old, garbage economic system back to the way it was. So they will never pay the right price, because they don’t want it to become so obvious just how bad of a mess these banks are in.2) What WILL happen–quite simply, the government overpays. They might not pay the pie in the sky model-based price, but they’ll undoubtedly overpay. That’s a lot of taxpayer money out the door that we quite simply will never see again (much of it, at least).And hey, it may help to restore trust and confidence in the banks, but not without coming at a STEEP price–the $1 to $2 trillion as you and the article you linked mention. First off, how do we know it won’t even cost more than that? Just how much of this junk is there out there? Second, where is this money coming from? Taxes down the line? You can bet your sweet ass, but that’s not going to cover it all. In this recession/depression environment we are staring at for the next few years (and I’d say it’s probably going to be at least a decade until the economy reaches the inflated/”never should have happened” level it hit pre-crisis), taxes just aren’t going to bring in the necessary cash flow. Not even close. Issuing more government debt? You betcha, but they HAVE to reach a breaking point eventually–foreigners will only buy so much of this stuff, and the more we issue, the less likely it is that we can repay it all. There are many out there who would argue (and I am becoming increasingly convinced) that the US has effectively reached a point where it is a Ponzi scheme. We have such HUGE liabilities in the form of all the public and private debt that is outstanding, not to mention the massive obligations we have created for ourselves in the form of Social Security and Medicare, that there is virtually NO CHANCE that the US has the future earnings power to pay down these obligations. A Ponzi can go on as long as people are willing to collectively delude themselves about the originator’s ability to make good on its payments. However, at the rate at which we are churning out new debt by the trillions, it is becoming almost inevitable that these foreign countries eventually realize that the US simply cannot make good on all this debt. Not to mention, seeing as how this is rapidly turning into a global recession/depression, with what money are these nations going to buy our debt? They are all starting to embark on the same types of stimulus packages and bailouts that we are. They’re going to be raising debt themselves, not buying ours!!All of this spending being done is going to come back to haunt ass before we know it. In my opinion, from day one, they should have faced up to the reality of the situation, acknowledged the crappiness of the banks, placed the burden on those banks’ shareholders and bondholders, and avoided this whole charade of bailout after bailout. We could have done this all in one fell swoop, and likely at a fraction of the cost to the taxpayer, and in a much condensed timeframe.And of course we have even more spending in the form of this inane stimulus. FORGET it!! These types of fiscal spending programs have virtually no evidence of working. The most prominent example of it–the New Deal–is popularly regarded as a failure!! Not to mention the fact that what really happens is that this money just gets funneled to whoever has the best lobbyists and political connections, and that a lot of this spending will take years to implement. So why are we still embracing it? I’ll tell you why. As “Mish” (Mike Shedlock–a GREAT blogger) likes to say, it is based on this false hope that this nation can have itself a free lunch. Of course, it’s not quite a free lunch since we will have to pay interest on the money we borrow, but basically, there is this belief that we can borrow a massive amount of money, go around and spend it domestically, and then the economy will just automatically start going again just like it was before. Like it’s a car that just needs to be jump-started. It just isn’t that easy. The US economy as it was comprised prior to this crisis was a joke. A credit-fueled, bubble-driven, financially engineered, manufacturing devoid joke that was blatantly unsustainable. But worry not! Throw enough money at it, and all the fundamental issues just get washed away, and we can resume living the good life!!Such a mess. Our culture of ignorance, instant gratification, and extreme aversion to any unpleasantness is going to bring us to our knees. We are going to do everything we can to avoid feeling any sort of pain despite decades worth of reckless behavior. But pain is inevitable. Unfortunately, our denial and our fear of owning up to the reality of this mess is only going to serve to prolong and intensify it. I am rapidly losing hope.This stuff makes my blood boil, and it should yours. This is OUR future they are botching”

Hobbes is pretend…? Financial meltdown and now this!

http://dealbook.blogs.nytimes.com/2009/01/29/nassim-taleb-i-was-happy-lehman-went-bust/This describes the dinner in Davos with the Professor, Taleb,Kanehman, Ferguson. The piece unfairly quotes Taleb out of context. My favorite quote from Taleb ” I hate traders. The business of creating and trading derivatives is all about taking advantage of clients.”This reminded me of somebody from a wirehouse asking me to pitch my clients on a structured note with knockout provisions triggered by volatility that would convert them to a fixed return and lock the clients money for a time. I knew the volatility would come and it was obvious that would turn out to be a low interest loan to my wirehouse. They were trying to use me to screw my clients. Taleb is freaking rightand I love how he just blurts out the truth. Who else has screamed to all winds that Merrill Lynch gambled with bailout money and lost. We need a little more PASSIONATE CANDOR in conjunction with the rational data approach. The professor and Taleb are a good team..Dear RGE Monitor! Please provide us a transcript of this dinner! This would be my superbowl!

http://news.bbc.co.uk/1/hi/business/davos/7859179.stmA little more elucidation on the subject of the dinner in Davos!We definitely need a trascript!!

No way they let the Dow drop below 8000 on a Friday. No way.

Too funny, Yve! (and can i ever use the laugh – thanks)

Society has no right to withhold jobs from people, and people have the right to equal pay for equal work. How mentally daft do you have to be to assert that making equal pay for giving equal sacrifice means everyone would produce the same things? The kind of progress we need is being strangled by the 100% unnecessary billions of times difference in pay.

Why is it not sustainable? And if it’s so obvious, why is it the only system that historically has always worked? It is short sighted, but if you’re concerned only for your own safety and happiness then who cares? At most your concern will be extended to the next two generations.The economic “I’m alright, screw the rest” ethos has worked beautifully for the last two generations. Now gen Y gets to pick up the mess, but for some reason we’re supposed to be more adult than the adults before us? Is that a validation for “justice”? My children are screwed either way. We’ll be picking up this mess for a long time to come.The key here is “eventually.” Eventually, our sun will burn out, but will it happen in my lifetime and should I be concerned with it? Will the victimizer become the victim? Maybe, if you wait long enough, but probably not. Will mankind be able to agree that looking out for everyone is better than looking out for themselves? Probably not.

Excessive pay is a problem, but so is trying to remove all inequality. The answer is somewhere in the middle.

Giuliani was the keystone, for the foundation…that was rejected.

how about 6000 breach withing next 3 months ..

An interesting conundrum: do the people who rise to power do so because they have no concern for the workers who helped get them their OR do they develop no concern for the workers who helped get them their after they achieve power? Or more simply stated: does Power corrupt or does the corrupt more easily achieve power?

“When I give food to the poor they call me a Saint. When I ask why the poor have no food, they call me a communist.”I’m sorry not to be able to recall the name of the man who said that.

Ghouliani. I love it.

Systemic capital requirement and Systemic Insurance Programhttp://www.ft.com/cms/s/0/4d0add58-ee27-11dd-b791-0000779fd2ac.htmlThis is from the NYU Stern Project on Reducing Financial Instability. From Nouriel Roubini and Lasse PedersonI am looking foward to the new book coming out soon!http://whitepapers.stern.nyu.edu/home.html

Why is Geithner excluding Nationalization as an option???The issue should be debated and the most effective option should be chosen even if it is Nationalization.Where’s the Nationalization Debate?by: Felix Salmon January 29, 2009 | about stocks: BAC / CFelix SalmonFelix SalmonAdd to Your WatchlistAbout this author:* Profile & More Articles* Visit ‘Market Movers’ at Portfolio.com* Subscribe to RSS feedBecome a Contributor Submit an Articleback to yahoo finance add to my yahoo back to cake*Font Size:*Print* Email* TweetThisgeithnerwarren.jpgThere’s a lot of words but less actual news in the NYT’s big report today on Tim Geithner and his plan for the US banking system. But one thing does interest me, given the extent to which Warren has been demonized by bank shareholders: financial stocks surged yesterday on the same day as the above photo was taken, with Geithner and Warren looking very friendly indeed.I do like this quote from Chuck Schumer, which I think sums up the debate quite well:”None of the solutions are very easy,” Mr. Schumer said. “All of these proposals sound very appealing until you start to examine them in detail. And then you find that all of them have problems. The good bank-bad bank idea — the problem, first and foremost, is how do you value the assets? No one knows how to do that.”But the nationalization idea still seems to be stillborn:[Geithner] discouraged speculation that the plan would include the nationalization of some banks.”We have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system,” he said.Such sentiments will certainly make Jamie Dimon happy:”JPMorgan would be fine if we stopped talking about (the) damn nationalisation of banks … we’ve got plenty of capital,” Jamie Dimon said, at the annual meeting of the World Economic Forum in Davos, Switzerland.Sorry, Jamie, but I’m going to keep on talking about it, just because it solves at a stroke the problem of valuing the bad assets that the government is thinking of buying at an absolutely astonishing cost of $3-4 trillion. It would also help address Larry Summers’s concern:Mr. Summers privately expressed concern last week that spending too much to buy bad assets could cripple the dollar, according to a person who spoke with him.This is a real concern. If you give the banks trillions of cash dollars in exchange for their toxic assets, there’s simply no way of forcing them to keep that money in the USA. Even if they lend it only to US companies — which is improbable — those companies will surely take advantage of the strong dollar to buy cheap imports.Nationalization, by contrast, doesn’t involve monetizing bad assets, which means it poses much less of a risk to the dollar. I’m glad that Geithner isn’t in a mad rush to decide what to do, but I’m less happy that some kind of bad-bank solution seems to be a foregone conclusion at this point, while nationalization has not been properly debated. If you don’t want to call it nationalization, fine — but at least take seriously the idea that the problem can be solved without a huge up-front transfer of government money to the banking sector.

http://www.thenation.com/blogs/state_of_change/403113/it_s_not_the_lobbying_it_s_the_agreeing_Treasury has been a division of Goldman Sachs since 1992.

Its done. Its all over. Nationalization, bad bank, pay cap. Its all arguing about the arrangement of deck chairs on the Titanic. Dont feel like you have any control over the situation. It is a human trait to think we can do something when in fact we have no influence on the situation. That is the basis of superstition. The die is cast. Just prepare. Get food from a CSA. We are going to get a side of beef. Stockpile staples. Sink a well. Pitch in in your community. Get ready.

This is all cover and window dressing for the real theft their trying to prepare the American people for when they transfer trillions of U.S. tax dollars to bond and share holders for worthless toxic debt instruments.

“This whole notion of “under no circumstances can the banks be taken over by the government,” this dread of the word “nationalism,” and all the paranoia about socialism that it is inducing, is just idiotic and destructive. “This is just cover or a wicked lie to justify the raping of U.S. tax payers that is about to occur. It’s much more sinister than the story you tell.

when you say “…. than they realize…” are you saying they really don’t know or don’t want to admit it…. my gs buddy warned me of this (as well as you) an year(+) before the mess exploded. everybody knew this…. at least everybody who dealt with this in real terms knew this….

Obama lied to America. He said this time will be different. But this time will not be different. This time will be just usual democrats agendas and bipartism government. Obama is a complete failure. NO, WE CANT.

“The British (and others holding pounds) see the pound sterling collapsing much like Iceland saw its currency collapse, but they know the dollar has its own problems, as does the euro (although I would argue the euro has fewer problems than the dollar or pound at the moment, even though I know others might disagree).Thus those who hold pounds exchange them for gold. The same goes for those who hold euros and those who hold dollars. This is what’s increasingly happening on a global basis, and it’s this demand that’s being reflected in the across the broad rally in gold in all these fiat currencies.When a monetary system collapses, like the fiat dollar-based one has, people simply don’t know what will be the eventual “winner” among government sponsored currencies that will be the basis of a new system (or if that new currency is even in existence yet).As a result, people run to what they ran to in the mid-1970s when the Bretton Woods monetary system similarly disintegrated and what investors have always run to throughout history during periods of monetary instability. They run to gold (and to a much lesser extent silver and other precious metals and gems).And they keep running into gold until there is more certainty as to what the new “rules of the road” will be as far as currencies go. And recall that we don’t have another G20 “Bretton Woods II” pow-wow until April (which is probably too soon for some sort of new system to be thrown together anyway). But when a new system eventually is put together, it’s a good bet that gold is going to be somehow involved for obvious reasons.In any event, regardless of what one thinks about gold as money (although let’s not forget that the Fed sure thinks gold is money because it’s the Fed’s primary reserve asset), gold’s rally is rooted in the fact that there are only two options for the US in this mess: default or debase. By its nature, debasement is a much more creeping inflation than a default, which tends to be more sudden and violent, but both lead to the same place (i.e. – inflation). Thus, both are bullish for gold. As more people figure this out, the dollar may or may not collapse against other pieces of fiat confetti who’s governments are following similar policies, but the dollar will most certainly collapse against gold.http://www.minyanville.com/articles/gold-spx-SP500-xau-gfi-mining/index/a/20881

The ONLY viable models are those existing in nature. Anything else is but a bubble…Mark

But a lot of the “shareholders” are pension funds of the very people who are pissed. Rock <everyone> Hard Spot. Game over… time to move on.Mark

Before I wake up Saturday morning I will save/create 13,000 jobs on Long Island N.Y.

Another excellent article. Thanks!Mark

When?Mark

I called my senator last night.

Bubbles exist in nature.

economicminor: The US has NO statesmen left. A few to yell about this or that to keep elected but not enough that understand the problems, are willing to stand up to the crowd and yell at the top of their lungs to the American People about the corruption.I beg to differ; watch this Jan 26th video where Dennis Kucinich describes his new legislation to Put The Federal Reserve Under Government Controlhttp://www.youtube.com/watch?v=-r_-QRKyu6g

You have to love this guy! He does not mince words and has made excellent recommendations!ReutersJanuary 30th, 2009Save capitalism from the banks – Nassim TalebPost a commentPosted by: James SaftTags: Uncategorized, banking, black swans, davos2008, nassim taleb, World Economic ForumNassim Nicholas Taleb, the author of “The Black Swan: The Impact of the Highly Improbable”, has a simple proposal to as he puts it, “save capitalism and free markets from the banks.”Nationalise the banks, limit the rewards to those who work in what he calls the “utility” part of the system and have a completely uninsured second leg that can take all the risks it wants and lose its shirt, he said in an interview in Davos at the World Economic Forum.“They rigged the game. We pay them for their profits, there is no clawback so their incentive is to hide the risk they are taking.”“Which is why eventually as someone who loves free markets, a total nationalisation of the part of the business that requires insurance and does clearing and payments needs to happen.”“I am angry with U.S. policy. What we had is exactly the opposite of socialism, they got TARP to pay their bonuses and to take more risk.”He describes his plan as Capitalism 2.0. It would have a barbell structure, with the insured utility-like part on one end and the free market bit with privatized risk on the other.He describes banking bonuses as asymmetric because the banker gets the upside but does not share in the liability which ultimately may be funded by taxpayers, as we have seen.Taleb, who as you may have noticed doesn’t mince words, is no fan of private equity.“Private equity has absolutely no reason to exist. The private equity holder has all the upside and the banks all the downside.” He’d have no objection to a system where private equity funds itself via hedge funds, so long as neither party had any recourse to government insurance.And a bit like an Old Testament prophet, Taleb is angry and wants those he thinks are responsible to suffer.“I want them poor and they deserve to be poor.You can’t have capitalism without punishment.”Oh, and another thing, he wants Bob Rubin, who trousered millions while chairman of Citigroup, to cough up.“I want Bob Rubin to return his $110 million dollars to the American taxpayer.”James Saft is a Reuters columnist. The opinions expressed are his own.

Mark,My take is that the money has to go somewhere and the most likely places will be into gold, silver, food and oil and stock in companies that will benefit from increases in these commodities. Supply and demand dynamics on both residential and commercial real estate are in favor of a continuation of the decline for a while no matter what anyone does. Farm property could go up. Same with other resource properties. To much overcapacity in most consumer goods and to little purchasing power for these to go up either.There is a problem for most folks in that with commodities going up, income available for debt servicing will be squeezed forcing consumer spending to decline faster and defaults to accelerate to an even higher level. If they could cause rising prices from inflated monetary policies, it will just exacerbate the economic crisis.The other thing that should happen is interest rates should climb dramatically. The only way to keep them down is to keep deflating the values of debts and assets thus making cash more valuable.Rising prices is assuming that inflating the money supply isn’t just barely enough to cover the losses from collapsed leveraged debts and there is some left to *invest* in other areas such as commodities.

Astonishing Incongruities”Is It Time to Bail Out of the US?” By Paul Craig RobertsCalifornia State Controller John Chiang announced on January 26 that California’s bills exceed its tax revenues and credit line and that the state is going to print its own money known as IOUs. The template is already designed.Instead of receiving their state tax refunds in dollars, California residents will receive IOUs. Student aid and payments to disabled and needy will also come in the form of IOUs. California is negotiating with banks to get them to accept the IOUs as deposits.California is often identified as the world’s eighth largest economy, and it is broke.A person might think that California’s plight would introduce some realism into Washington, DC, but it has not. President Obama is taking steps to intensify the war in Afghanistan and, perhaps, to expand it to Pakistan.Obama has retained the Republican warmongers in the Pentagon, and the US continues to illegally bomb Pakistan and to murder its civilians. At the World Economic Forum at Davos this week, Pakistan’s prime minister, Y. R. Gilani, said that the American attacks on Pakistan are counterproductive and done without Pakistan’s permission. In an interview with CNN, Gilani said: “I want to put on record that we do not have any agreement between the government of the United States and the government of Pakistan.”How long before Washington will be printing money?On January 28 Obama announced his $825 billion bailout plan. This comes on top of President Bush’s $700 billion bailout of just a few months ago.Obama says his plan will be more transparent than Bush’s and will do more good for the economy.As large as the bailouts are–a total of $1.5 trillion in four months–the amount is small in relation to the reported size of troubled assets that are in the tens of trillions of dollars. How do we know that by June there won’t be another bailout, say $950 billion?Where will the money come from?Obama’s bailout plan, added to the FY 2009 budget deficit he has inherited from Bush, opens a gaping expenditure hole of about $3 trillion.Who is going to purchase $3 trillion of US Treasury bonds?Not the US consumer. The consumer is out of work and out of money. Private sector credit market debt is 174% of GDP. The personal savings rate is 2 percent. Ten percent of households are in foreclosure or arrears. Household debt-service ratio is at an all-time high. Household net worth has declined at a record rate. Housing inventories are at record highs.Not America’s foreign creditors. At best, the Chinese, Japanese, and Saudis can recycle their trade surpluses with the US into Treasury bonds, but the combined surplus does not approach the size of the US budget deficit.Perhaps another drop in the stock market will drive Americans’ remaining wealth into “safe” US Treasury bonds.If not, there’s only the printing press.The printing press would turn a deflationary depression into an inflationary depression.Unemployment combined with rising prices would be a killer.Inflation would kill the dollar as well, leaving the US unable to pay for its imports.All the Obama regime sees is a “credit problem.” But the crisis goes far beyond banks’ bad investments. The United States is busted. Many of the state governments are busted. Homeowners are busted. Consumers are busted. Jobs are busted. Companies are busted.And Obama thinks he has the money to fight wars in Afghanistan and Pakistan.Except for the superrich and those banksters and CEOs who stole wealth from investors and shareholders, Americans have suffered enormous losses in wealth and income.The stock market decline has destroyed about 45% of their IRAs, 401Ks, and other equity investments. On top of this comes the decline in home prices, lost jobs and health care, lost customers. The realized gains in mutual funds and investment partnerships, on which Americans paid taxes, have been wiped out.The government should give those taxes back.Americans who have seen their retirement savings devastated by complicity of government regulators and lawmakers with financial gangsters should not have to pay any income tax when they draw on their pensions.The financial damage inflicted on Americans by their own government is as great as would be expected from foreign conquest. While Washington “protected” us from terrorists by fighting pointless wars abroad, the US economy collapsed.How can President Obama even think about fighting wars half way around the world while California cannot pay its bills, while Americans are being turned out of their homes, while, as Business Week reports, retirees will work throughout their retirement (which assumes that there will be jobs), while careers are being destroyed and stores and factories shuttered.Americans are facing tremendous unemployment and hardship. Obama doesn’t have another dollar to spend on Bush’s wars.Taxpayers are busted. They cannot stand another day of being milked by the military-security complex. The US government is paying private mercenaries more by the day than the monthly checks it is providing to Social Security retirees.This is insanity.The banksters robbed us twice. First it was our home and stock values. Then the government rewarded the banksters for their misdeeds by bailing out the banksters, not their victims, and putting the cost on the taxpayers’ books.The government has also robbed the taxpayers of $3 trillion dollars to fight its wars. About $600 billion are out of pocket costs, and the rest is on the taxpayers’ books.When foreign creditors look at the debt piled on the taxpayers’ books, they don’t see a good credit risk.Washington is so accustomed to ripping off the taxpayers for the benefit of special interests that the practice is now in the DNA. While bailouts are being piled upon bailouts, wars are being piled upon wars.Before Obama gets in any deeper, he must ask his economic team where the money is coming from. When he finds out, he needs to tell the rest of us.Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal.http://www.vdare.com/roberts/090128_incongruities.htm

Saved by 0.86!SWK

I recall the soviets (post 1989) claiming that what collapsed was not “REAL Communism”.And in the recent past many others that “theirs is a religion of peace” and that some have given “jihad” a bad name.The first step is acceptance. Then solution is possible.

Here’s an interesting article:Consumers cut credit payments, struggle to pay billshttp://www.usatoday.com/money/perfi/credit/2009-01-29-consumer-credit-delinquincies_N.htm?loc=interstitialskipI am taking the liberty to post below comment made by someone with the nick “” to above article:

There is a huge SCAM, a multimillion dollar SCAM, being fosted on the american public!!And our legal system is in on it!When you stop paying on a credit card debt,The original creditor is mandated by federal law, to charge-off an account when no payments have been received for 180 days.That date is refered to as the “Date of Last Activity (DLA)” and reported as such, to the credit reporting agencies by the creditor.After they write it off, they “Bundle” all these uncollectable accounts and sell them for pennies on the dollar on the open market, this is where the 3rd party debt collectors come in.They BUY a “BUNDLE” of this uncollected debt info from the original bank.However what they buy is your name, account number, and what you owed to the original bank.They rarely or never get your “original signed contract” with the credit card company, your last statement of payment on the account, and the original writeoff amount.This is what they need to “PROVE” in court that they now have “TITLE” to your original debt.!!This information is usually sold several times within the “networks” still as a BUNDLE of uncollectable debt!They will harris you on the phone, send threating letters, saying that they represent “XYC LLC” who now has title to your Bank of Bundi account in which you owe some ridiculous amount.First off the “XYC LLC” company is usually some “shell” company that the collection law firm has setup, because by law, the law firm itself cannot hold title and try to enforce a judgement against you.So they have to “represent” a client who holds tile, so they claim against you.The law they are trying to collect on is “CONTRACT” law,,which requires them to have “the original signed contract”, and the “deeds of transfer”, indicating your account specifically with the “deeds of transfer”, and a copy or original of your last statement, indicating your last payment on the account, and the “charge Off” amount. Which the original bank “wrote Off” its books.They never have any of this information, what they present to the court is a hodge podge of information, a pasted piece from an excell spredsheet with your name, address ect, usually 2 pages sideways, “certifications” which are assembled by their own staff on their own computer systems, including usually an amount you owe which they assembled from their own computer system. From this “Budle” they bought for pennies on the dollar!!The problem is unless you SHOW UP IN COURT, when they file a lawsuit against you, demanding they produce the original signed contract”, and the “deeds of transfer”, indicating your account specifically with the “deeds of transfer”, and a copy or original of your last statement, indicating your last payment on the account, and the “charge Off” amount…They will request a default judgement from the Judge..and he will grant it!I have specifically fought 3 cases against me, taking several court dates, time off from work, endless hours of waiting, but they realized I knew what I was talking about and that they could’t proof their case, IE get over on me…and they dismissed their suits…go herehttp://www.budhibbs.com/index.htmlhere Collection Agencies Illegal Practices ~ New Jerseyhttp://caipnj.blogspot.com/and herehttp://www.geocities.com/presslerclub/The reason the courts are usually on their side is “MONEY” each time they file its $15.00 fee, each time you answer its $15.00 fee, multiply that times the thousands of collection cases and you can see how the courts make money..not to mention that its a “Buddy” system..you can email us at stopthirdpartydebtcollectors at yahoo.com for more info!!

I usually post “stuff” because I think it is very good/excellent. However, this Maulding piece I am posting because I think it is terrible. He says:”I don’t know much personally about trading. My stomach won’t allow me to trade, although I have watched and met with the best. But I do know this. The best traders and managers have risk controls and sell disciplines and they stick to them. Period. They don’t fall in love with a stock or a commodity position.”I agree 100% with the first sentence; and, I also agree with the risk control aspect of the article. However, the unfortunate truth is that “trading”, including the use of trading software, picking “active” money mangers, and other things he discusses in his piece are mostly nonsense. He should stick to his macro work which, IMO, is pretty good.http://www.investorsinsight.com/blogs/thoughts_from_the_frontline/archive/2009/01/30/trading-with-the-big-boys.aspx

Dennis Kucinich is a living treasure. Posterity will build statues to honor this courageous man of integrity and truth. Thanks for the link, ptm!

Can you rewrite this without the violent rape as just deserts bit, Medic? I take your witty ditty in the overall spirit it is meant, the earnest craving to see justice done, and it is creative, but I can never cheerlead for the rape of anyone, and we’ve no right to lock people up and let them be raped in our custody. That’s a thing must be condemned, not joined up with. The other thing is, as history proves, the next wealthpower giants are ALWAYS waiting in the wings, so just meting out punishment to the current perps does nothing to stop the next and the next and the next wealthpower giants from arising. Will the next bunch treat us nicer once these few are in jail? No. The problem is all in allowing anyone in any time to accumulate overpay overpower.

Bill Blum (Killing Hope dot org) was inside The State until he saw what was going on, and he said something like; No matter how paranoid you are about your government, what they’re doing behind your back is far worse than you can imagine.sorry not to have the exact quote.

For pity sake will you TRY to be rational for one second? You are arguing that since we don’t know exactly what is outside the burning house, we should just stay inside! Punkin, when the house is on fire, IT’S TIME TO GET OUT OF THE BURNING HOUSE!We have law against murder, but that hasn’t prevented all murders – BUT THAT’S NO ARGUMENT FOR REPEAL OF THE LAWS AGAINST MURDER.Sheesh! We’re all dead someday so nothing we do matters? I don’t know how to even talk to such illogic as possesses you!

A Shift Toward Worker Power? The Time is Ripe to Tip the System, NowAllan Nairn – Posted: 29 Jan 2009 10:23 PM CSTIn bad situations, people lower their standards for what it is that constitutes good news.There’s a very sick man with a withered arm, but it hasn’t been amputated, contrary to what a garbled, and panic-inducing, report had indicated.Similarly, a boy has been coughing for three months, but a TB test says it isn’t TB.Saying this, the parent, on a cell phone from the Burma border can be heard shivering in the rare cold, even though the family has just invested in a blanket — their second, which is now handy, since for three nights they’ve been sleeping in the forest to dodge police who (in a case of bad good news) aren’t seeking bribes, but are instead seeking to catch people and — word has it — ship them to Naypyidaw (the capital) for one year’s bondage labor.The question always is, bad compared to what? One person’s dump is another’s home hearth.And that can be said literally, since, not far from that coughing family, there is a garbage dump where others live in slime, but they live there not as bottom-dwellers but as, relatively speaking, rich aunts and uncles — economic migrants — who periodically transfer money back home, since by picking (and living) trash they make more cash than do their relatives on, or off, the farm in Burma.There are dump cities around the world.In Guatemala, they feature vultures (the bird kind). In the Philippines there are frequent dump-slides, killing people.And in Cambodia, the New York Times just visited a dump city, and used the existence of this particular hell to argue against labor standards on the grounds that if people would only work more cheaply that would create more jobs for, say, dump dwellers, on the neoliberal assumption that capitalists don’t currently have enough desperate, oppressed, potential workers to choose from (See Nicholas D. Kristof, “Where Sweatshops Are a Dream,” The New York Times, January 14, 2009).Very poor people can indeed be delighted when what we call a sweatshop comes to town (see News and Comment posting of Nov. 8, 2007, “Duduk – Duduk, Ngobrol – Ngobrol. Sitting Around Talking, in Indonesia.”), but what the Times misses is that they would be even more delighted if it paid them better wages, didn’t rape and fondle the female workers, didn’t spray them with toxics, etc.Whether or not that happens and whether or not enough jobs get created depends crucially on the balance of power.When workers are weak, it is indeed true that cutting labor standards can get more factories built, but by that Times/Davos/Burma-junta logic of job creation you should also abolish the minimum wage, permit prostitution, even permit human bondage/ slavery, since each of those steps would indeed — under weak-worker conditions — induce the creation of new jobs (Inconsistently, the Times editorially does support the minimum wage, and that Times writer, has, as it happens, crusaded against poor-country prostitution).A better job-creation solution is to change the power balance and make workers strong, in which case capital is the one that has to take bad news as good, adjust their expectations downward, and realize that if they want to put their capital to work they’ll have to pay people enough to, say, eat well.Its true that, depending on what kind of historical moment one is in, such a job solution may not always be pragmatic.If say, for example, interest rates were high, capital could say: ‘Screw these workers, who needs a factory? For now, we’ll just put our money in Citibank!’Or if capital were riding higher than usual in political leverage it could just say to a government bent on imposing laws to strengthen workers: ‘Screw you, government. What do we businesses need from you? What are you going to do, bribe us?’But of course, those are not the conditions that exist today.Today, in what’s called the financial crisis (though for those hungry, life has always been “crisis,” even when rich people were calling it “prosperity”), interest rates are very low and business needs a lot from government.Workers (or unemployed) are, of course, today still more vulnerable than bosses, but the key changeable variable now is government: it has leverage, perhaps unprecedented leverage, as businesses pant for government’s bailout trillions.And vis-a-vis worker-staffed production, businesses need to get that revivified, since stashing cash in banks is not now hugely rewarding.Which is to say, this could be a moment for a power shift — from workers being weak to being strong — but only if people force government to kick in on the workers’ side, to, for one thing, use its leverage and condition bailouts on deep, thoroughgoing reforms that hugely elevate labor standards, not cut them, and that alter how capital is owned and controlled so that the crisis-induced power shift stays permanent and maybe even opens the door to a more rational, less-killing, system that, at the least, does not starve people.That’s not current rich-world government policy and angry workers aren’t currently mobilized.But they could be, if some see without illusion that this strange moment could be their opening.It could be, if they make it so, without waiting for team Obama.Sad but true, but US economic policy is now shaped by the man, Prof. Lawrence Summers, who wrote the Concise Encyclopedia of Economics entry on “Unemployment” and observed — to the great pleasure of Bush Jr.’s advisers — that “If unemployment insurance were eliminated, the unemployment rate would drop … Another cause of long-term unemployment is unionization …” (Lawrence H. Summers, “Unemployment,” The Concise Encyclopedia of Economics, 2008).These Summers quotations were highlighted on the blog of Bush’s old economics chief, Gregory Mankiw, of Harvard, who told neoliberals not to worry too much about the orientation of Obama Democrats.Mankiw wrote: “What would you call a group of economists who are skeptical of regulating mortgage markets, who think unemployment insurance and unions increase unemployment, who say that tax hikes retard economic growth, and who believe that the recovery from the Great Depression was a monetary phenomenon rather than the result of New Deal fiscal policy? No, it is not a right-wing cabal. It’s Team Obama …” (“The Next Team,” Greg Mankiw’s Blog, http://www.gregmankiw.blogspot.com , Nov. 30, 2008. Mankiw followed with extensive quotations from Summers and other Obama economists).Again, such neoliberal thinking only works in a political weak-worker environment.But that doesn’t have to be the environment now — and for the future, unless workers decide, by inaction, to politically amputate their own arms.

from the Allan Nairn piece, this deserves its own block: …for those hungry, life has always been “crisis”, even when rich people were calling it “prosperity”AMEN

How could charity be disgusting? Individuals aren’t giving charity in “exchange” of justice?I see if you say that justice needs to serve the poor, but you could barely blame charity given by individuals and assume it as a notional exchange of justice on “their” part. In fact I agree with the author above, imo secular people give a lot less to charity…whether and what form of justice should be there is totally irrelevant.

Vested with the epistemological authority of their expertise in one discipline, it is not uncommon for an expert to succumb to their own success(ego)or even a political agenda and make pronouncements in another discipline. A great example of this is Dr. James Hansen (Physicist, Astronomer and head of NASA’s Goddard Institute), who is a self proclaimed climate expert and champion of human caused Global Warming. Hansen was recently rebuked by his former supervisor.

Justice is NEVER irrelevant. A statement such as that puts you in confirmed la-la land. You are trying to posit that I am against giving the poor immediate help to avoid starvation and improve their situation, which is a ridiculous assertion on your part – utter nonsense – you’re just making it up as you go along.Charity is an essential, crucial stop-gap measure as things are now – and I’d be willing to bet I who have so little and am not “religious” give a greater percentage of what I do have away to the poor than you do – so get off your high horse and stop lecturing me. Go give to Heifer International, or a village clean-water project.But it certainly chaps my chocolates to know that every bit of charity I give helps the overpaidoverpowered ESCAPE their responsibility for continuing the starving to starve.

You are getting emotional, you have to realize that a commune would eventually make everyone starve.I didn’t make any claims about you, just added to the above report based on my personal experience. Who gives more charity, you or me, is irrelevant.And I didn’t say justice is irrelevant, I said giving charity is not wrong because, according to you, there is no justice.

God is going to throw me straight into the pit of fire for getting emotional over people being MURDERED by inequality, I suppose.

No, I agree the house is burning. And I agree that utopia would be a nice place to live. But I see a VERY large disconnect between your proposed utopia and reality. Honey Lamb, getting out of the house is important, but if you try the upstairs window instead of the one on the ground floor, you’re still in trouble.Your murder analogy is nice. But its a law that is currently in place with moral and ethical arguments for it. The overpay/underpay proposals are new and I don’t see how they can be implemented.It’s not that “everyone dies so nothing we do matters” it’s that everyone dies and what we do has limited impact. What percentage of the population actually makes an impact that lasts longer than (at most) two generations? Most die and are never remembered. Count the names in your history books and compare that to the number of people that have lived and died in those same time frames. Say we manage somehow to get a majority and implement your theory; what happens in two generations? My concern is that in two generations, maybe three, we’ll end up with the exact same kind of mess, only with a slightly different source. Mankind has a knack for screwing things up on a large scale.I’d throw my hat in with you on this one, if it didn’t sound so much like a perpetual motion machine.

Nature in her wisdom circulates the blood to every part of the body. She does not give blood to the head and withhold it from the extremities. Money is the blood of our economic system and must be circulated throughout the system. We are dying because we have erected a system that captures all the blood at the head and doesn’t circulate it.

You are so trapped by your inability to think a new thought, it’s sad, just sad. It causes you to keep thinking that inequality makes the pie bigger, when the opposite is true. Ask yourself how economies and markets would bloom if the billions who live on a dollar a day were allowed to participate in the economies. You have bought into the biggest lie there is: that pay justice capitalism will make us all poorer. The enemy has established an outpost in your irrational head.Go ahead – keep treating the poor as your pets. I’ll be out here fighting for justice for them while you do that.

Why all this fuzz about this Bad Bank. Isn’t it just another name for an oversized TARP the original. Methink that it all goes down to how much money US can lend before it has to finance its obligations with “quantum easing”. Then it is game over!

I’ll be able to think outside my “trapped mind” if you could “clearly” describe what you are arguing for, on what grounds, and how will that work?

It will be next to impossible to hide an overfortune in a world convinced that overfortunes are dangerous to allow to anyone.

Yea but it’s not pension holders who are lobbying our politicians to bailout the banks, it’s much bigger players than that. People aren’t so pissed about losing their pensions as they are about banksters ripping off tax payers and NAFTA selling our country out. Our politicians don’t have a clue as to the retaliation that’s about to happen if the neoliberal agenda continues. A spade is a spade and this is clearly about the ultra rich trying to pillage and enslave the masses.

Enough! Do you have to have the last word on everything!

Sorry, you are right… I should say few instead of none.Just not enough!

Your comment was a blast of truth in one sentence, for sure – and good on you for the valuable reminder to us all of how they obfuscate and invent all sorts of cover stories and distractions and divides and etc to hide the worse thing they are up to.(Today we see what they were up to while it was all Gary Condit all the time on teevee…)

My apologies, I had not idea you felt so persecuted. Is there a preferred term for a system or state considered to be ideal? I am gen Y and I’ve come across more trigger words for boomers and gen xers than I ever thought existed. I guess I have to add ‘utopia’ to my list.I have no subversive agenda. I question and challenge in an effort to understand. I didn’t know you had a plan to back your theory. Is it in the archives here or elsewhere?If you have two simple steps then why not simply delineate them? Why bury them in nebulous arguments that puts off anyone who doesn’t already agree with you? If those who question or challenge should “get out of the way” then what ARE you doing to promote your perspective? Posting on and economics blog seems rather counter intuitive if you seek to affect the “majority general consciousness.” You’d get further starting your own blog or even sending out a chain letter.

we are in a world tragedy -with billions of people struggling to make ends meetthe Powers that Be already show PANIC + MISMANGAEMENTPaulsen running to Congress for a $700 Billion blank check- Nouriel sees “the worse lies ahead”Ted G. saying the same “currency manipulation” accusation shows the “Powers” want to believe that the USA/dollar is still KING OF THE UNIVERSE – when a deer is caught in a car’s headlights it freezes – the “Powers” are like that deer, frozen in their tracks with PANICseeing that the Old World is gone would mean losing powerif the Powers don’t deal with it – the ways things have changed, are changing … then Nouriel says that “the outcome may be even worse”if the “stimulus” package is mostly money borrowed to give out via tax backs and unemployment + some pork, then it’s an attempt at “business as usual”stocks and R.E. are going to be lower/flat for years to comehow are the Pension funds going to pay out pensions?will the Govt have to take over and borrow to pay the pensions?no one is dealing with a comprehensive plan for the country-and-the-world to deal with realityGold is a good idea

Hi MoG,It would be nice if things were simpler.Americans do not want to be told what to do or what they can buy and our corporations have taken full advantage of this by forcing more and more of the costs out into the future… Until we hit the wall. Now an ever increasing number of people can’t pay. And as they can’t pay, that affects a daisy chain of events. The more we try and fix things, the worse every thing gets. The banking system and all parts of government NEED revenues from a high level of sales. YET people can’t service all the debts that have been piled up on their backs.This goes to an educational system that has been underfunded for decades. A health care system that has borrowed from Peter to pay Paul’s expenses for decades. A corporate system that has passed untold trillions of dollars onto the future to clean up their messes and dispose of the waste they make in packaging etc.Even the unemployment insurance you mention is now borrowed from the future. We have reached a peak in debt YET the answer to all problems is to make more debt and transfer it to someone else.When we don’t want to pay for something in any way, we charge it to the future to work out. Look at the total debt facing the US.America has not been able to afford its lifestyle for a few decades now and the consequences of yesterday’s borrowing has finally caught up with us. There is no way to work through this mess and keep jobs or make additional jobs. What we have to do is declare insolvency and write down most of the mal investment and let the games start again. I see this as inevitable. No possible way out of the debt trap. You can’t get out of a hole by digging it deeper and we don’t have enough resources to dig a tunnel back up to the surface. We need a long ladder to get everyone out of the hole, fill it in and start anew.One way to slow down the dumping is to charge up front for it from the importers and or manufacturers. The people of the US want stuff cheap and corporations want big profits yet there are all these side costs that don’t get paid. Managing the waste, health care are two of the biggest. But then a cheaper transportation system would also reduce the overall costs… But entrenched interests keep nothing progressive from happening.Unions are not the answer any more than government has been. They can be a force but generally they selfishly work for one side at the expense of the big picture. They have been an obstacle in progress and efficiency as much as big business has been a force for the elite. I do not have any idea how balance can be arrived at. Workers rights need to be a piece of the picture but not the picture any more than CEOs making thousands of times what a productive worker makes but the bottom line is that both will put off costs onto someone else to benefit themselves.We have a complicated mess and the most probable outcome is melt down because there are no disinterested fair brokers. Obama could have been but he chose to put people in positions of power that helped create the problems. It is extremely unlikely that they will change and go in a different direction and actually try and negotiate solutions.

I know, Mark. It didn’t work with TARP One, nor will it work with TARP Two, Three, Four, ad infinitum. But just like TPTB, I just feel like I have to Do Something. BWOO-hahahahaha. (Insane laughter.)

You know, what I find fascinating is the guv’mint can read my snail mail and e-mails, listen to my phone conversations (land or cell line), look at my bank accounts and medical records, and make me take off my shoes at the airport, all because I might just be a terrorist. So they “need to know” everything about everything that I’m doing. I am guilty until proven innocent.Yet these private financial cartels do not have to show The Public one shred of paper telling us how they’ve spent our tax dollars.Hmm. I dunno. I just don’t get it. They’re not a risk to our national security, I guess.

One man’s justice is another man’s terror. Remember Auschwitz?

Mother of God has asked a couple of people from crowded threads above on this page, to “see below” for info they’ve requested. This that info.The following threads are where you will find my past posts you’ve missed:Chapter 6 is here:from a hopefully forthcoming bookChapter 8 is here:from same63 major points are here:63 illuminating points“my plan” for survival and sustainable global happiness with 2 easy-peasey doable steps explained is here:How to get yourself back a chance to have a futureSo, yes, I have said it before, and I hope you will read the thinking with a mind open and willing to seriously, thoughtfully, deeply consider the great rational sense in those posts.

To anybody who’s asking for more info, it’s posted at the bottom of the page now and I hope you’ll go read at the links I dug up for you.

G2, G1 must be allowed to vent, to draw a breath here and there. Otherwise he (and taxpayers everywhere) will not be able live through the brutal dry humping in store.

@GuestYou need a serious history lesson!

Hi, MoG. I see you’ve been super busy. And I understand the need to write when so inspired (To heck with sleep, right? We’ll sleep when we’re dead.) Take good care.If there were a run on the banks, I suspect that’d get some attention. But I too wonder what’s the trigger point for We The Paralyzed People.

I am someone who pays attention to politics but never before in my life have I been so impassioned and angry with our government. I have lost all faith in the U.S. and democracy we can all see it’s run by crooked powerful bankers. The evil I’m witnessing is almost surreal it feels like the movie Star Wars when the Sith lord takes over the senate and tries to conquer the republic. I voted for Obama but now I see how beholden he is to the evil bankers. Obama thinks Americans are stupid and will fall for CEO pay standards while the real bastards the powerful banking shareholders and bondholders steal our children’s future.

Participatory Democracy requires an active citizenry.We must do what we did when Paulson wanted the autocratic TARP. We now must email the White House!We are the progeny of Thomas Paine and Samuel Adams.Democracy is a constant project of personal contributions to the public good. Use whatever tools you can. We have bloggers here who are IT Experts and they can assist in providing additional tools of magnification of our efforts. I am not going to stop.I am going to spend all my weekend in front of this computer, and I will disseminate information in everyblog I know. Do the same thing!All we want is for them to think before they act!

This is certainly good announcement timing for the big bankers. Could it be Axelrod is astroturfing to help the big banks get their Bad Bank, i.e., disguising an orchestrated campaign for a spontaneous upswelling of public opinion — the specialty of his second business, ASK Public Strategies. Bad news can be good news for the big banker monopoly if played right, can’t it?Florida, Maryland, Utah Banks Shut as Financial Crisis DeepensJan. 31 (Bloomberg) — Banks in Florida, Maryland and Utah were closed yesterday as regulators wrapped up the busiest month for failures since the housing slump began in 2006.Ocala National Bank in Florida and Suburban Federal Savings Bank of Crofton, Maryland, were shut by federal regulators, according to statements sent by the Federal Deposit Insurance Corp. MagnetBank of Salt Lake City was seized by the Utah Department of Financial Institutions. The banks had total assets of $876.4 million and deposits of $790 million.Six banks have failed this month as tumbling home prices and a 16-year high in unemployment boost foreclosures. The FDIC classified 171 banks as “problem” in the third quarter, a 46 percent jump from the previous period amid the worst housing crisis since the Great Depression.Regulators closed 25 U.S. banks last year, the most since 1993, draining money from the FDIC deposit insurance fund, which had $34.6 billion as of Sept. 30. Ocala and Suburban Federal combined will cost the FDIC fund about $225.6 million, the regulator said. No estimate was provided for MagnetBank.Suburban Federal’s seven offices were scheduled to open today as branches of The Bank of Essex of Tappahannock, Virginia, which acquired the deposits. The Office of Thrift Supervision said it seized the bank because of more than a year of losses stemming from soured residential, construction and land loans…The FDIC said it was unable to find a buyer for MagnetBank’s deposits, the first time that’s happened since 2004. Insured customers will be mailed checks for their funds next week.The FDIC, the Treasury Department and Federal Reserve have stepped up efforts to aid U.S. institutions that reported more than $500 billion in writedowns and credit losses, and raised more than $400 billion in capital last year. The U.S. on Jan. 16 gave Bank of America Corp., the largest bank by assets, $20 billion cash and $118 billion in asset guarantees to help absorb losses after the acquisition of Merrill Lynch & Co. Citigroup Inc. got $20 billion and $301 billion in guarantees in November.‘Bad Bank’To unclog banks’ balance sheets, President Barack Obama’s administration may set up a so-called bad bank, managed by the FDIC, to buy up toxic assets, according to people familiar with the matter.More than 2.3 million U.S. properties got a default or auction notice, or were seized by lenders last year, RealtyTrac Inc., the California-based seller of default data, said Jan. 15. That’s the highest total in the four years of RealtyTrac recordkeeping. Filings rose 41 percent in December from a year earlier.The FDIC and the OCC have taken steps to prevent failures, including allowing private-equity firms and other bidders to buy assets and deposits of lenders running out of cash. IndyMac Bank, the fourth-largest U.S. lender to fail last year, on Jan. 2 became the first institution sold to a private-equity investor for $1.3 billion. The sale was led by Steven Mnuchin of Dune Capital Management LP.The FDIC last month approved a budget for the coming year that almost doubles spending to $2.2 billion from 2008 to hire staff for handling bank closures. As much as $1 billion was allotted to manage failed banks.The largest institution to fail in U.S. history, Washington Mutual Inc., was sold to JPMorgan Chase & Co. Sept. 25 after customers drained $16.7 billion in deposits in less than two weeks. Wachovia Corp. was near failure before being bought by Wells Fargo & Co. for $12.7 billion.http://www.bloomberg.com/apps/news?pid=20601087&sid=aIfyJ5j8OHTM&refer=home

And did you see that Wells Fargo paid dividends to its shareholders? And had the noive to preemptively say they didn’t need no more stinkin’ TARP money? Now why would that be, after they’ve swallowed all the toxic waste in Wachovia? Perhaps they’ll be able to regurgitate all those stomach-churning poisonous assets straight into the Bad Bank commode? And flush ‘em all away where?Not one of these b**tard financials wants to clean up after themselves. It’s just plain disgusting.

I don’t really think making depositors whole is going to be a problem for the government, even assuming a large number of banks collapse and are taken over by the FDIC. That being said, I think it is certainly prudent to have cash on hand for about a month or two, because if a lot of banks fall at once, there could be substantial delays in getting credit for your deposit monies. If things were to get as bad as you suggest, it doesn’t seem to me that withdrawing all your money from the bank would solve anything, since your money would quite likely be worthless in such an eventuality.SWK

One’s first impression usually winds up proving a better guess than a second guess (like taking a multiple choice exam). SWK

The Bad Bank is no doubt getting plenty of attention , behind the curtain. Getting all dressed up and prepared for it’s big debut before the waiting massed crowds outside – to be trumpeted as the THE saving program (heard that before?) for this whole godawful mess.Put together by the Wise Men. Those technocrats who really do understand this problem and will earnestly vouch for this Pig in Lipstick as a way out. A solution of sorts.Forgive my skepticism.We had all better start realizing that Govt does not have the answers. Or, they are concealing them for ulterior motives. They are NOT to be relied apon to provide us our solutions. The first and foremost objective of Govt is to remain in power. All else is subordinated. Therefore any solutions put forth to us will be provided through that dynamic.And you can all forget about restitution and reckoning for the snakes in suites who were allowed to grow this monstrosity of toxic debt that is to be bailed out with YOUR money. Why? Because those same snakes in suites have the dirt on the same Govts and its institutions who will now roll out your savior – The Bad Bank.And you can be certain that this wont come cheap (to YOU). Forget about thinking of the cost in dollars and start thing about the cost in years, decades perhaps. The costs, I predict, will be mind boggling- much more than the several Trillions being bandied about today. The ramifications of this Debt wash will be felt for much of a generation in the form of a much lower standard of living.The global economy is and will continue resetting as the consumption collapse rolls on. It will settle sometime at a much lower level of GDP than we knew before. The big adjustment will then have started but what will truly shock us will be that recovery, as we know it, will be pretty much absent. A very very long sideways move is a ahead of us once economic equilibrium is restored, where growth meanders a percent here and there, not much above zero. Unless of course one believes the propaganda of Govt numbers.And that’s the good scenario. If Govt’s choose to send their countries broke throwing away treasure at this natural repudiation of debt and it’s severe effects , then this “adjustment” could turn into something much more violent and bloody. Think worldwide chaos. Gov’ts need to be shoring up balance sheets, not decimating them. They need to be cutting their expenses and using the savings in preparation for very long term sound plans that can mitigate the worst of this for the vulnerable and families. The stimulus pork will not work- it is only more toxic debt someone somewhere will have to pay back in hard labour (from which the taxes will derive).Don’t fall for this Pig in Lipstick when she is unveiled.

Thats why they need to be nationalized, and triaged.

Speaking about who / what is to blame for the current global economic, monetary and financial crisis; not to forget the social devastation’s brought about by the same Cause:1. Bankers? I have recently read that we have 30 major banks but there are no competent bankers to run them; then I remember years ago that Investment Bankers defining Commercial Bankers as Investment Bankers who failed the course; okay2. Politicians: These people are elected by a popular vote – in theory, but anyway by the mass of the people (poor theory) which we know are influenced by Bernasean wands, lies, misleading advertising and when everything else fails, just by rigging the ballot boxes; nothing new here.3. Bureaucrats: Those lot that work to rule by definition as nobody in their right mind, quite correctly, trusts them and that has been hardwired into the system; and we all know that the definition of evil is 1000 thoughtless and efficient clerks. Then you get the political appointees, a type of bureaucratic virus that has no soul or identity but can self-replicate itself into the heart and soul of its host and ends up in control of the host, with the results of extremis followed by tortured death.4. The Voter: This over-emotional, easily led and influenced, under-educated mass of seething humanity that votes for the guy or gal that gives their ego some hope and divine lift – or some cheap sexual thrill – through the never, ever delivered cheap promises of the endless line of false pretenders lusting for the riches and glory of pubic office; and then there are the over-zealous “True Believers” who would kill for any cause as long as the cause gives them a feeling of belonging. You know, those people described in novels by Erskine Caldwell.5. The Conspirator: The big men behind the scene of oft religious, secret society and monied notoriety? One does acknowledge that there are groups of the like minded that would like a lot more power and cash, etc., etc., but that is how physics of the Universe(s) works; but… the Judas Principle brings them all down eventually. Betrayal here, is the sport that all play.6. The Lobby: Well we all know that to get rich you have one choice: theft and the best thieves of all are politicians; so you bribe to get what you want; in other words, you steal that which you desire in the most efficient manner possible, that is, through the politicians (and bureaucrat), of course.The reality is; none of the above; the culprit is out-of-control emotions entrenched in massive amounts of ignorance swayed by fashionable morality and superstition; across-the-board.A. American was never a “democracy”; it was once and originally, a republic.B. Democracies don’t work for the voters are too dumb and the opportunists, too many.C. Bureaucracy is always run by those types of individuals that need help breathing, eating and drinking; so what can you expect from regulators (read: the let’s-do-lunch-crowd where the regulated pick up the tab.)?So where to place the blame?Clearly the blame should be placed on those that call themselves “Law Makers”; Yes, you have got that right, on the politicians and where it is commonly known, that these types have the well known following attributes: liar | thief | cheat | greed | slimy | greasy | self-inflicted | opportunistic | dishonest | well, you get the message.But, we know all this? So, it is clearly the fundamentals that are to blame for we are all people and all know the basics but we carry on anyway and then cry foul, when it all falls apart. ‘The Bad Bankers’, ‘the thieving, lying politicians’, the ‘x lobbyists’, ‘the other Party’, ‘the secret society’, etc.When it all boils down, it is the fundamental assumptions underlying the socio-economic systems that are clearly to blame; we have no will and are really not very intelligent no matter who claims that so and so is super intelligent; he / she isn’t more intelligent that most of the rest; just more sneaky.Until we confront the realities that the human race consists of untrustworthy liars, cheats, thieves, murderers, pedophiles, heroes, honest men and women, hard working good peoples and a far longer list of attributes that I provide here but ending in the basic and fundamental fact that: no man/woman can be trusted, then our future will remain doomed to guilt and failure.I do not offer an adverse criticism; I offer, a fact. All men/women are created uniquely and none can be trusted!Ho hum

Hayes, Hansen, trained under VanAllen (nobelist, as Hansen will be one day) has dozens of publications in atmospheric science and measurement (the NASA part),he’s at top of his professional field; his supervisor is a Bush administrator following the political agenda of the oil industry (Texas). Your information came from Senator Inhofe’s craftily designed web site (same people and techniques as those who “exposed” the scientific conspiracy behind the supposed connection of tobacco to cancer). Read science journals, not the phoney cess pool of disinformation you’re relying on. Thanks. Tom Staley

Get some popcorn, gather the family and settle down in front of the computer and be the first to see tonight’s main attraction video on Broadway… whoops, I mean Wall Street …“starring DC newcomer David Axelrod in his debut, “Axelrod on Wall Street Bonuses,” written by Axelrod, produced by Axelrod, and directed by Axelrod — already a Bloomberg Editors’ Video Pick — and sure to be a big financial hit on Main Street.Tonight’s family computer viewing also includes a gripping double feature starring another new talent, discovered by Ophrah Winfrey, for a limited time only, that mystery agent of change, Barack Obama in “Obama Vows to Stop CEO’s From ‘Draining’ Recovery Funds,” a story of intrigue and mystery sure to keep taxpayers’ on the edge of their seats in heart-stopping terror that will make every viewer go sleepless listening for the gentle click of the door to gently…swing…open…at the treasury. Yahhahahaha!! Another Bloomberg Five-Star Pick!!http://www.bloomberg.com/index.html?Intro=intro3

True, SWK, but my counter-point is: a bank run or two would be a way to at least get the attention of these thieves, don’t you think?There’s no question in my mind that any purchasing power of the middle class is now gone for the foreseeable future. Because we WILL pay for the bailouts with the inevitable massive inflation, higher property and income taxes, higher mortgage and credit card rates, increased sales and use taxes and more and more “fees.” There will be precious few disposable dollars (pun most certainly intended) left for We the Sheeple for years if not generations.Oh, well. Ya can’t take it with you.

From “Trust Lost, Earned and Achieved” Posted by mollybrogan • 5/18/08“Wise men put their trust in ideas and not in circumstances” Ralph Waldo EmersonBy advising us to trust the ideas of men, not the events in their lives, Emerson expresses his belief that history was biography. This is a form of trusting others outside of convention, namely, trusting in the ideas of men and how they shape our lives.“No soul is desolate as long as there is a human being for whom it can feel trust and reverence.” TS EliotTrust between people is the most widely studied form of trust. Stanford’s Encyclopedia of Philosophy defines trust as: an attitude that we have towards people whom we hope will be trustworthy, where trustworthiness is a property, not an attitude. For trust to be warranted (i.e. plausible) in a relationship, the parties to that relationship must have attitudes toward one another that are conducive to trusting one another. Moreover, for trust to be warranted (i.e. well-grounded), both parties ought to be trustworthy.“I know God will not give me anything I can’t handle. I just wish He didn’t trust me so much.” Mother TeresaWe see from this statement by Mother Teresa, that trust in something greater than ourselves, in a divine organization to life, or in God can work both ways. Having faith that everything will be all right, that tomorrow will come or that the Lord provides, are all examples of trust in creation.http://www.blogcatalog.com/group/dialogue-raises-consciousness/discuss/entry/trust-lost-earned-and-achievedP.S. I trust you, Peter JB, just by knowing you from this blog. Misplaced, misled, mistaken? I don’t know, but I doubt it. Apparently we’ve all a built-in trust detector – which, I admit, isn’t fool proof as proven by con artists. And in that the majority of present-day politicians seem to fall into that category, current events are going to force political change. It’s a given. Hopefully, that new something will be a return to a republican form of government.Article IV of the U.S. Constitution provides that the national government shall guarantee to each state “a Republican Form of Government” – not a democracy.As David N. Mayer in “A Republic, Not a Democracy” says, overall, the system of government [the Founders] created was republican, not democratic. Says Mayer:Among the key features of the American system of government that helps protect against the tyranny of the majority, the basic evil of democracy, is the republican, or representative, system itself…by filtering the people’s desires through the rational discretion of their representatives…The basic evil that the Founders saw in democracy – that is, direct rule by a majority of the people – was that it endangered the rights of individuals. It was the problem that Alexis de Tocqueville, a young French aristocrat visiting the United States in the early 1830s, would describe…by the phrase “the tyranny of the majority.”Virginia’s Edmund Randolph, a member of the 1787 Convention, reminded his fellow delegates that their mission was “to provide a cure for the evils under which the United States labored,” namely “the turbulence and trials of democracy.Samuel Adams championed the new federal Constitution in his own state, Massachusetts, because it was not democratic: “Democracy never lasts long. It soon wastes, exhausts and murders itself,” he noted, echoing the classical model’s theory, “There was never a democracy that did not commit suicide.”Alexander Hamilton, in a June 1788 speech urging his fellow New Yorkers to ratify the Constitution, declared: “It has been observed that a pure democracy if it were practicable would be the most perfect government. Experience has proved that no position is more false than this. The ancient democracies in which the people themselves deliberated never possessed one good feature of government. Their very character was tyranny; their figure deformity.”And James Madison, writing in perhaps his most famous Federalist essay, No. 10, noted that “democracies have ever been found incompatible with personal security, or the rights of property; and have in general been as short in their lives as they are violent in their deaths.” He went on to argue that only in a republic, “by which I mean a government in which the scheme of representation takes place,” and particularly in a republic spread over an enlarged “sphere” of territory, like that of the United States, would the rights of individuals be secure.The Founders’ negative views of democracy derived from the classic theory of politics held by most English-speaking people in the 18th century. Under this classic model, each of the three pure forms of government were unstable, ineffective guarantors of citizens’ rights, that inevitably would degenerate into something worse: monarchy would degenerate into an absolute dictatorship (one-man rule); aristocracy (literally, government by “the best”) would degenerate into a tyrannical oligarchy (absolute rule by a few); and democracy would degenerate into either anarchy or the tyranny of “mob rule.”http://users.law.capital.edu/dmayer/blog/blogIndex.asp?entry=20050606.asp

Well, here’s a start, from Wikipedia, and, then, take a look at the Obama Economic Cabinet and, then, connect the money dots on the financial “daisy chain.” Says Wiki:But more than that, Obama brings with him the baggage of Chicago’s political culture – the roughest in the US…the sharp suits, naked ambition and political trading….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…were regulars, plotting Obama’s run right up to the presidency…http://en.wikipedia.org/wiki/David_Axelrod_(political_consultant

Interesting that gold still fascinates some. A shiny inert metal not good for anything much. Gold is priced by what people believe, having very little fundamental utility. I would surely rather own oil, steel or even lithium.

a,i agree. and you too have that quality.

I would like to add that we are at this point in time due to the fact that we are running on ‘lowest common denominator’ (democracy) auto-pilot and not intellect; I draw your attention to the fact (again) that our technological advances at this point in time are accelerating at a bewildering pace.Can we not embrace these facts and leverage them in a risk model (where risk is computable uncertainty)?Yes/No?”To be or Not to be, this is the Question?” (emphasis mine)Ho hum

The American consumer drove world economic development based on the explosion of debt. Now we are maxed out on debt. Our monetary system is based on fractional reserve banking, in which money is loaned into existance. More money must be loaned so the previous borrower has the additional debt-based money to pay off the loan PLUS INTEREST. Once debt stops expanding, the borrowers don’t have the money to pay off their loans plus interest. The demand for dollars increases, and the value of dollars increases. This isn’t good, but a symptom of a deadly illness in the economy, like a high fever. Some debtor are caught without a chair once the lending music stops, can’t find the dollars they need to pay off their debt plus interest, and default. These defaults are widespread, and since we have a debt-based monetary system the economy is thrown into deflation as debt-money is destroyed. The administration wants to get credit flowing again to stop this dynamic.There are several confounding and compounding factors that make the solution more complicated than just getting credit flowing again. One is the high existing indebtness. Consumers have no more capacity to borrow. Another is the negative savings rate. Easy credit inflated the value of assets. Everyone could get their hands on money, so prices inflated. That created a wealth effect, making people think that they no longer had to save because the value of their assets was increasing. Now that easy credit is gone, assets are values are decreasing. Even if the consumer had the capacity to borrow, they wouldnt until they built up savings again. Securitization is another. The debt was bundled together based on actuarial calculations of whatever, divided into tranches and insured, then rated AAA and sold, then insured again with CDO’s and so on. Now that the underlying loans are defaulting the securities are declining sharply in value. Those who insured the securities or are the counterparty to a CDO on a trigger event like the security declines in value below a certain point are being forced to pay up and are being dragged down too (AIG). Another is the off-shoring of manufacturing, and the decline of manufacturing in the US. Now that the financial services based economy has imploded, there is nothing to take its place. We make much fewer products here that we can sell to the rest of the world. We have no manufacturing jobs for people to be employed at in order to make a decent wage and pay off their debts and buy stuff. We have a ‘service based’ economy, but who to sell services to? Unemployed people dont make a good market, or good tourists.Even if the Administration solution can get credit flowing again, there is no way that it will be taken up by consumers. Even if it was, credit is not a solution to the confounding problems. That pandoras box has already been opened.

The point above is: BLIND belief. Believe in it if you feel like it, but do not believe blindy.

Let’s hope Roubini doesn’t become another Granville. It seems to me the only way to understand any company and it’s exposures these days is to thoroughly understand the accounting for that specific industry first.

Kucinich? You must be joking. This is the same guy who allowed his city to go bankrupt.

The worst part of the current financial crisis is that the true idiots , who for years had looked at the total level of derivatives in the trillion and screamed to high heaven that it would bring down the economy , turned out to be right. It’s the worst part because they turned out to be right by luck, not by really knowing anything . I will proceed to scream about every large dollar amount in the future and am sure to be right sometime.

A system of slavery that’s more difficult to reveal or point to.So everyone start emailing all of your friends and relatives there are lots of great videos on the internet that depict very clearly our system of slavery and how it works, if enough people understood and protest this corruption and their control of the media and our government the banking industry would become a tax payer owned utility as it fairly should be!

I respectfully beg to differ. It has been painfully obvious from the beggining that the Over The Counter(OTC) derivatives market when supercharged by computers and deregulation would be taken to its potential extreme which is financial chaos. It is extremely logical to think that total deregulation of abstract digital money would bring the financial system down. Illogical was to believe otherwise! Anybody who knows the history of risk and its roots in the syndicates of Lloyds of London, knows that the syndicate members had to be capitalized. The naked credit default swap bucket shop gamblers were not capitalized, had no insurable interest, and violatedthe tenets of risk management. The unregulated off the exchange derivatives market became a method of gamblingby another name. Even gambling has rules. If a bookie has no cash and is taking bets, he is risking bodily harm in the illegal gambling world. I submit to you that the illegal bookie gambling establishment was better regulated. There is no such thing as luck! There is analytical acumen and there is a faith based investmentsystem.

I agree, with the exception that the blood is not at the head unless the head is up where I think it is.

I guess the interest payment will have to be printed as well. Excellent + Brilliant.

Some worthwhile charts on banking exposure and credit spreads here, thanks to Ty Andros.http://www.financialsense.com/fsu/editorials/andros/2009/0130.htmlNote especially:* High risks currently exist to corporate debt.Translation: Risk of further corporate bankruptcies is high, and dangerin CDS market is significant and credible.** Foreign investments are fleeing the USA in droves.PeteCA

Lets not forget, you can compound and maximize the interest return by lending the interest at the same rate (yes -6%) -> yes, print more money. Fabulous, excellent, and brilliant!!

Democracy has produced Obamaland.

for banking, at 0% rate, depositors get nothing, so some defection to risk spectrum for tiny return. at -6%, depositors will need to pay bank, so there will be no depositors at banks. the money will all be under the each home’s carpet. banking will be destroyed, but wait there will be TARP from fed. yes, fed will nationalize banking with -6% rate policy.

http://www.youtube.com/watch?v=7sei-eEjy4g.mia, paper planes..”all i wanna do is bang,bang, bang, etc..take your money”.here is one with universal appeal.

If they ideologically cannot Nationalize the Banks for dogmatic reasons, then the Soros Proposal is better than others. Mind you, I think Nationalization is the only way.Financier George Soros said he favours a variation he called a “good bank” — keeping existing bank capital together with the bad assets in a “bad bank” and creating a new bank with the good assets. The government would then recapitalise the good bank and existing shareholders could invest more money.http://www.guardian.co.uk/business/feedarticle/8337223The bankers can’t be trusted!

g,the concept of a good bank? wow! that is, frankly, incomprehensible. sadly and sorry, he will have tothink again. won’t happen with the federal reserve system.

I believe in worldwide Ponzi schemes and universal gullibility. I believe that reckless lending can be cured by reckless borrowing and that fraudulent borrowing can be healed by fraudulent lending. I believe that a housing bubble fueled by loose credit can be corrected by easing credit. I believe that each trillion of hallucinated dollars that disappears in a puff of Wall Street smoke then always reappears magically from behind a Treasury Department mirror.I believe in America’s almighty financial geniuses and monetary officials, who destroy wealth indiscriminately and indefinitely, and whose kingdom shall have no end. It is divine justice that those who cause financial catastrophes are rewarded with public money, while innocent bystanders are punished in their stead. I believe that central banks can print all the money anyone will ever need. I believe that if one stimulus package does not work, the next one surely will.I believe in the redeeming power of financial complexity. I believe that hedge funds and sovereign wealth funds are righteous to enter into incomprehensible contracts having convoluted ownership and no inherent value. And I believe that opaque, secretive companies which pretend to insure those investments are offering a valuable service, even if this requires the use of public money.I believe that economic stability and confidence will return when every failing business is bailed out, with no failure too small to be left behind. I believe that all dying institutions shall be consolidated, merging the smaller basket cases with the larger ones. The lion and the lamb shall lie down together in a new spirit of national competitiveness.I believe that the end of days shall come when there is only one institution left, comprehensively unified, far too big to fail, owning everything and controlling nothing. All shall come and supplicate before its holy ATM machines, for they are subtle and quick to anger. It is in this one true financial institution that I put my faith, truly gigantic, truly bankrupt, amen.http://cluborlov.blogspot.com/

s,mountain moving stuff.

What’s so disappointing and sad is that Obamas speeches were so uplifting to the people, people really believed in him and his change message and as it turns out he’s as sold out to the devil as Bush and Cheney were maybe even more. It’s going to be every man for himself now our government is completely hijacked!

Hi allBeen a while since i’ve logged on. Good to see the discussions still going on – a real education, that’s for sure. My husband was in danger of losing his job; fortunately he did not. His company laid off 1380 people.Unfortunately alot of our friends got axed. I grew more than a few gray hairs this month. We did, however, take a 5% paycut. There’s a rumor of another layoff round coming in March or April.There is an interesting lead article today in the New York Times Magazine “The Big Fix – What can Obama do to transform an economy that can no longer count on Wall Street or Silicon Valley?” by David Leonhardt. I think it’s available online; I have the print version. Just wondering what people think of this article.

Okay, I get it. Thanks for all the analysis.Now, what does a family do to prepare.

Your spin is not supported by the verified facts, Anonymous, and the true story is easy to find with but small effort I suggest you make – unless you’d prefer to become married to your error. You are greatly mistaken about Dennis Kucinich’s leadership and who it was strongarmed/caused the bankruptcy. When the truth came out, the people wanted and got DK back in office to represent their best interests once again.

Because the media is money-occupied territory. The financials own the media chains, and about everything else, including the government, IMO.”We simply have to develop better methods of communication with the people because we know that there is no better system of ultimate reliance on the discriminating choice of the people. But they have to be informed. The first responsibility is information, is truth.” ADLAI E. STEVENSON, Mike Wallace Interview, Fund for the Republic, 1958.And, viola, the Internet! The number of daily newspapers in America has plunged from 1,800 to 1,200. And the majors, such at the Washington Post and the New York Times, are reporting massive losses in circulation and advertising revenue—compensating by slashing news staff.Mr. Stevenson would be astonished how the push for truth is pushing the Internet. I love it!!!

The Wee Ones’ Economy Game – a nursery rhyme for adultsPut one-hundred balls in a playpen and thenSurround it with children, a party of ten.Tell them to scramble for all they can getTeaching “more is so good ever-more’s better yet!”Give them the idea to grab without stoppingThen witness the fights and the tears ‘til they’re dropping.Some will get many while others get none:Playtime turned misery for everyone.Now put the balls back; instruct each to take tenAnd smile as you watch peaceful playtime begin.It’s that way with money and power as wellToo much for one, churns the world into hell.Overpayunderpay’s killing us allWhile fairpay’s essential to ending the brawl.Our situation’s as simple as thisEqual fairsharing is key to our bliss.

He still sounds reasonable but the people he has picked to solve our problems only know how to maintain the status quo. In a way he reminds me of Bill Clinton who said the right words and did the wrong things too. He signed all those trade agreements and tax incentives that neither protected the environment nor American jobs or industry. He also signed the repeal of Glass-Steagal which allowed the financial institutions to create all this toxic waste and remember Global Crossings, Tyco, Enron, World Com et al, they all happened under his and the Democrats watch.

mog,that is cool.! and good economics.

I’m in no position to determine whether or not it’s ill intent or just plain ignorance but it doesn’t matter either of them are equally destructive!

Obama is a sold out. Can’t be people are so gullible to believe in him. He doesn’t have the courage, will, or smart to solve the problem. He will just kick the problem down the load. There is no change. NO WE CANT, because even he CANT.

you mean Treasury bond as well? What the heck, lets default on Treasury, Note, or short-term bill. Yes, lets to turn those debt 0cent on a dollar -> complete system default. wow, that will be something.

Want to be prepared? Try Survival blog http://www.survivalblog.com/ and see if you can get your brain around that!Think deep woods military orders retreat with 10 other skilled individuals (no children) and years of supplies. Now check out the type of people that do this: http://www.survivalblog.com/profiles.html And if these people are really lucky will they survive.Then there are the community types: http://www.survivalblog.com/2009/02/the_community_retreat_by_kathy.html but that just means you get to die with your friends a little later than sooner.

Yes, OK! But what about next week’s lottery numbers?

Question: since only about $90 Billion or so of the $825 Billion stimulus package will be spent on infrastructure, does anyone know if it can be said that more money has been spent on infrastructure improvements in Iraq that are slated to be spent on the so-called infrastructure stimulus programs within the US due to the massive global financial and economic crisis?

yes, if you can kindly post the lottery number.

As Emerson would say: “The louder Soros talked of his honour, the faster we counted our spoons.”

I agree.SWK

The lighter side of tutterfrut? Sorry, but this cannot be the real tutterfrut? Besides, the real tutterfrut would never stay up this late into the evening when there is work to be done Monday morning.

Pete, this is what I’ve been waiting to see. Proof! This is the blockbuster, the documentation of the insolvency, the charts, the investment map. I’ve culled out a few kernels to emphasize its importance. It begins:Financial Sense University 2009 Outlook, Part 2:BondsAs economic activity and PONZI finance fall off the face of the earth, we enter the stretch run of the CON game known as the Bond and FIAT currency markets. Although both are headed for their ultimate demise, the path will be quite different. In 2009, these challenges will be headed your way. Prepare properly and thrive, or fail to do so and fall to your demise.Never before in history have so many investors made decisions based on PHONY data and false headlines…GDP, inflation, employment, credit ratings, corporate profits, balance sheets and much more have been MANIPULATED…This politically correct, but practically incorrect data has also been used when making investment decisions, thus creating assumptions which are often false and misleading…Crop reports, unemployment reports, inflation reports, everything has now been colored by politicians and crony capitalists to create PR/illusions they wish to foster into the public at large in order to manipulate them. The MAIN STREAM media are willing facilitators of these FALSE reports. Many times the financial media make reports on companies’ profits which do not reflect the true profits and losses which we find in a companies’ tax return. Every investment and analysis made through the investment and commercial banks is BASED on these false OFFICIAL numbers and most have been massaged, thus any investment decision coming from this data is deeply FLAWED…The Bomb, er…Bond marketsI will start by saying that this is the MOST toxic area you can be in at this moment. Every assumption underlying the creation of a bond, its value as a “store of value and wealth” and repayment is NOW FALSE. Corporate and consumer income, government income, tax receipts, cash flow, level of business activity, asset values, future business, profitability and every qualifying metric used for borrowing are now significantly LESS. In most cases it WILL NOT recover for many years, if not a decade from now. And government stimulus activity will DELAY any recovery in income for years. Therefore, the expectations for repayment are considerably diminished.The first sector we will look at is banks who are on life support as a cardiac victim would be, hooked up to the respective central banks with IV’s. They are functionally insolvent with no reserves to absorb the estimated $2 trillion PLUS of losses expected this year in the US and $6 plus trillion in the Euro zone. Looking at this chart of the biggest banks in the world puts perspective on the DEPTH of the problems:Bank and Market Value, in $Billions,As of Q2 2007 and Market Value As of 01/20/09:Morgan Stanley: 49 vs 16RBS: 120 vs 4.6Deutsche Bank: 76 vs 10.3Credit Agricole: 67 vs 17Societe Generate: 80 vs 26Barclays: 91 vs 7.4BNP Paribas: 108 vs 32.5Unicredit: 93 vs 26UBS: 116 vs 35Credit Suisse: 75 vs 27Goldman Sachs 100 vs 35Santander: 116 vs 64Citigroup: 255 vs 19JP Morgan: 165 vs 85HSBC: 215 vs 97TOTAL IN $BILLIONSMARKET VALUE AS OF Q2 2007: 1726.0MARKET VALUE AS OF 01/20/09: 501.8The $501 billion figure is what is known as TANGIBLE COMMON equity and it is actually the total net worth of these banks. Book value is a fiction; this is the true level of equity available to absorb future losses. To demonstrate how close they are to insolvency, I will show you measures of outstanding liabilities wherein this equity is leveraged:(This 5-bank 10Q chart is TOTAL CREDIT EXPOSURE TO RISK BASED CAPITAL (%) SEE LINK) NOTE: Avg % (Top Five Banks) 08Q3 317.4%These banks are representative of the problem they all face: INSOLVENCY. For a complete look at the picture, you can link to this report from the Office of the Comptroller of the Currency Administrator of the United States outlining the unbelievable LIABILITIES and LOSSES these banks face (P.S.: when reading this report, be sure to have fresh underwear close by as it is a thorough picture of the problems). This is a nightmare on WALL STREET and MAIN STREET…READ THE FULL REPORT:http://www.financialsense.com/fsu/editorials/andros/2009/0130.html

Achutan is positive on Obama’s plan. In my opinion, the stuff I made bold below is the low probability event but is the way I am cautiously positioned now. If I turn not to be right, I will hit a home run. If I am wrong I will definitely ended poorer than if I had stayed in 100% cash/cash like, As I advised late last year but turned away from as I started buying risk on price weakness. My risk exposure is now in US equities (29%) and commodities (4%) as detailed in previous posts.http://www.businesscycle.com/news/press/1298/Obama’s Recession FixBloombergJanuary 28, 2009(Bloomberg) – Right TrackSo President Obama appears to have it about right: Government spending, including state and local, for a quick fix; temporary tax reductions to help households pay down debt and, eventually, spend the money to strengthen the private sector; and no permanent tax cuts that would stick us with even worse deficits than are projected now.Senator John McCain, an opponent of the Obama plan, raised the deficit issue last week — although only in the context of spending, not of tax cuts. “We need to have a commitment that, after a couple of quarters of GDP growth, we will embark on a path to reduce spending to get our budget in balance,” he said.Shades of 1937. In that year, the economy was improving and Roosevelt — on the advice of his bankers — turned conservative. He cut government spending, raised bank reserves and increased interest rates. It was a disaster. The U.S. plunged into a second recession.‘Error of Optimism’In February 1938, the economist John Maynard Keynes wrote FDR a reproving letter, saying he’d fallen into an “error of optimism.” Cleaning up insolvencies and establishing easy money was a precondition for recovery but not recovery itself, Keynes wrote. Government-aided investments, in “housing, public utilities and transport,” should have continued, he wrote, until it was clear that private demand had grown strong enough to carry the recovery up.Currently, we’re enduring the worst recession, for depth and duration, since the 1930s and the broadest global recession since 1948. We don’t want to repeat FDR’s mistake. By embedding longer- term infrastructure programs in the stimulus package, Obama’s plan provides continuing support for GDP and jobs.At the moment, expectations are rising that the aggressive, yearlong drop in interest rates, plus the fiscal stimulus, will produce results in 2009 rather than 2010. The weekly leading indicators compiled by the Economic Cycle Research Institute stopped falling in December and rose a bit through early January, although not by enough to call a turn in the economy, says ECRI managing director, Lakshman Achuthan.Preparing for the Turn“My fantasy,” Achuthan said, “is that the stimulus coincides with the natural forces that will turn the business cycle up.” Such a recovery could be strong enough to create the jobs needed to stabilize housing prices. Nothing in the data, however, predicts this yet. When the cycle does turn, Achuthan would favor investments in commodities, Treasury Inflation- Protected Securities and other inflation hedges.(Allan) Sinai expects higher corporate earnings by yearend, based on the size of the write-offs and cuts in labor costs he’s seeing now. “People in safe financial positions might think about deploying some money in stocks,” he said. “There could be a bear market rally, with some chance of starting the next bull market.”The next challenge will be the shocking government debt and deficits that are shaping up. But first, the policy makers have to get the economy moving again.

Sometime within the last year or so I remember reading a news item that the us govt had placed motion sensors throughout the national forests. The sensors automatically report to the government via satellite. The reason given was to watch for ‘poachers’- a problem I never heard discussed before. Conspiracy logic suggests it is to track any Robin Hood movements if things get difficult. Or not. Deep woods survival may or may not be a workable alternative.

You are correct. Who would pay more for the same?How do you get higher wages? When others are willing to do the same job for less.What is wrong is that American’s want everything and don’t want to pay for it today so they charge it. Now the bill has come due and we can’t pay for it so we think we should just be able to charge some more except we can’t because we can’t pay for what we already bought and used up.Yet the government thinks we should…. anyway! Are they delusional?

How interesting: the bad bank plan gets put on hold so Obama can tout his CEO pay limits and talk about saving peoples homes in his stimulus bill, all this to soften the blow and soften the resistance for when they bailout bank shareholders. They’re trying to build up as much political capital as they can because they know full well bailing out bank shareholders is extremely unpopular and will costs them all dearly politically. Obama’s a pretty smart guy give him credit he’s willing to give the people a nickel first before taking their dollar and giving it to the owners of the big banks. So here’s a message to the banking oligarch and Obama , Hello big banksters and your whipping boy Obama, the people are on to you they know you own our government the media and most big industry but this time the people of the world won’t be fooled with slight of hand tactics, the internet is quickly revealing who you are how your ownership of banks is a cloaked system of slavery and just how far you’re willing to go to preserve your power and control of the U.S. and the world. This time you will not succeed your demise is coming!

Why is it that these people think that God somehow has ordained capitalism?It’s how it always is, “My/Our” system is the best that could conceivably exist. It gets repeated up until the very system collapses from an inability to handle change…Mark

“no one should be forced to pick higher price”Neither should the U.S. government be forced to support free trade or manufacturers in other countries.American problem is not that they end up in debt because they buy luxuries. It is that they end up in debt because they can no longer even afford to live paycheck-to-paycheck.Besides I was referring to the American government to buy American. Individuals can do what the heck they want.The fact is that free trade is what causes the beggar-thy-neighbour situation by forcing down the wages. You can support that all you want – just shows what you are.Capitalism is a religion just like so many other human philosophies, complete with its own adherents.

yea maybe he’s actually hoping for those things

Sorry, you’ve mistaken this channel for the “The Commies are Going to Get Us” channel. Please turn your dial.Mark

Hanging… Town Square…Mark

Lest anyone think that it’s readily possible to just run off and live off of a pile of food and guns:Winter catches couple off guardMark

And why the heck would Russia want Europe? There’s got to be a motive… Europe doesn’t have enough resources.I don’t see this playing out like some Hollywood movie. Most likely it’ll be politicians haggling over spending money to prop up failing infrastructure until such infrastructure can no longer be maintained: yes, sooner or later those nuke plants will be devoid of human fingers to keep them from melting down, and THIS is where the real disasters lie (of course, those selling this crap to us for all these years want us to fall for some sort of distraction like a Russian invasion).Mark

Speaking OF “Opportunity”:From a Bloomberg Page I noticed this advertisement (by Google):Low Cost Jail FacilitiesApproved by D.O.C. 20 Year Warranty Turnkey package available for LeaseSee here: http://www.jailcells.comJust hilarious, but could be an IPO venture. Just think, there could be specialist detention centers for Bankers | Regulators | Rating Agencies | Real Estate Agents | Mortgage Salesmen | and even energy slicks… place them in good locations and just think of the property market growth potential:-)Ho hum

Should have said in closing usher in the new era!

oh yeah? look at argentina, no nation bother with it since it defaulted.

The drooling rich have spontaneous orgasms every time the workingman’s pay is cut further and further and further and further and further and further and further and further and further and further and further and further and further and further and…

This is an excerpt from Frank Veneroso via naked capitalism:When financial markets become nothing other than a casino, as they had during the bubble period, and market participants flee fundamentals for the witchcraft of technical analysis and other divinings of market dynamics, market participants will send prices flying about in ways that have nothing to do with prospective returns to real investments. The result will be a serious misallocation of real resources.When bubblized markets go from a mere speculative casino to a casino in which pivotal players are driven only by the pursuit of short-run fee income by hook or by crook, you can get a more willful proliferation of “false” prices and an even worse misallocation of resources.This is what has happened over the last ten years. The result is what economic theory says it should be: today’s global financial, economic, and social catastrophe. The ruling maxim in such a regime seems to be that market participants will push prices to the point where they do the maximum financial, economic and social damage. I believe that, despite the massive losses to market participants that such behavior has now brought them, their behavior has not changed. Half a generation is enough to breed a cohort among market participants that knows of no other way. This cohort has been hurt and has had its wings clipped, but the markets have become commensurately less liquid. This cohort still runs the show.If you want to change something, first kick all this bastards out.

Good morning, blindman, dear. Thanks for enjoying that. This species (if we wake up in time) is going to have a tremendous laugh at itself someday when we look back and realize how simple the solution to 99% of all our unnecessary suffering always actually was.Maybe this peaceful revolution in thinking needs to be danced into people’s heads??

I have no use whatever for Richard Heinberg ever since I discovered the nasty dark side he’s tied up with. Scratch deep beneath the surface of that dude and you won’t like what you’ll find cuz his pals are racists and eugenicists and they’re all connected with some pretty ugly new-age sewage “spirituality”.

That is the true travesty. The system of serial bubbles of inflated assets took investment capital away from productive resources. The misallocation cost this countryit paramount position in technological advancement. The present regime of banksters must be replaced by efficient productive capitalists that value the economy. The parasitic speculative paper shufflers must exit now. Theywill not be easy to dislodge, and we must be tenacious.

m,word.

The Banksters Debtosaurus is going to swallow the toxics andallow them to return to pillaging the land!From the Daily Star:One of the most articulate critiques came from Niall Ferguson, a professor of history at Harvard, who repeated an argument he has made in several recent books that the American “debtosaurus” is following Britain down the path of imperial exhaustion and decline.The rock stars here this year, surrounded by adoring fans, were two economic analysts, Nouriel Roubini and Nassim Nicholas Taleb, who saw the disaster coming before most everyone else.Roubini argued that the skewed incentives of the old system had almost guaranteed the eventual crackup. Mortgage companies had offered dubious subprime mortgages, for a fee; banks had underwritten them, for a fee; investment banks had turned them into exotic securities, for a fee; rating agencies had given them artificially high marks, for a fee. The system “worked,” you might say.Taleb, a former trader who wrote the book “The Black Swan,” argued that Wall Street’s models – supposed to prevent bankers from taking excessive risks – were actually a big part of the problem, since they created a false sense of confidence about the future. Rather than seeking reassurance in models, he advised anxious traders to go have a drink, or take up religion.”It’s easier to say ‘God knows’ than ‘I don’t know,’” said Taleb, in what might be a motto for this year’s Davos meeting.explanation:P.S. Jamie Dimon made some reference that ” God knows mistakes were made”. Jamie Dimon must talk to God like Dubya

Quinn who authored this article is a card carrying Democrat. In reading the Bloomberg article (also published in Sunday’s Washington Post) she seems to have written it in such a way that the reader would infer endorsements of Obama’s plan by Achuthan and Sinai.Here is what Sinai wrote on January 28 in the Wall Street Journal A $545 Billion Private Stimulus Plan (WSJ)and from a January 17 Associated Press article there is this:

“Allen Sinai, president of Decision Economics, a Boston-area financial consulting firm, said that even with Obama’s aggressive spending program, the economy seems unlikely to show a true recovery this year in terms of sustainable gains by consumers and businesses.”There are forces going on that are 1930s-like,” Sinai said. “There is incredible asset deflation, a huge loss in wealth by households. In the ’30s, even when funds became available from the financial system to borrow, the pessimism by consumers and businesses was so great that no one wanted to spend.” Sinai wouldn’t rule out a repeat of that mind-set.” link

And then this:

Economist Lakshman Achuthan agrees that government-funded job creation alone won’t solve the problem. Atchuthan is director of the Economic Cycle Research Institute and as he sees it, there are two other elements needed: extending jobless benefits, which Congress just did, and some sort of direct economic stimulus.”Rebate checks or food stamps or payroll tax holidays or tax breaks for specific businesses — whatever,” he said. “The content is less important than the timing.”Case in point: the economic stimulus package passed by Congress last February.”$150 billion was spent earlier this year and what we ended up with was a rapidly deteriorating economy and financial market, Atchuthan said. “It didn’t help at all.”Achuthan says since the economy was already going down, the money got lost in the economic storm. Instead of buying stuff, most people put their stimulus checks in savings for a rainy day or paid off credit card debt. Congress and Obama should agree on an economic stimulus package, but he says the money shouldn’t go out until the economy takes an upward turn. link

Banker + gangster = bankster – an excerpt from BBC AmericaWords pop in and out of our language as social conditions change. The American gangster, which is still with us, has been around as a noun and a reality since 1896 according to my Shorter Oxford, but it seems to have dropped another Americanism from the 1930s and I think now is the time to revive it.The word is bankster, derived by a marriage of banker and gangster.It was coined, as far as I can deduce, by an American immigrant, a fiery Sicilian-born lawyer by the name of Ferdinand Pecora. He was the chief counsel to the US Senate Committee on Banking set up in the early 30s to probe the origins of the Crash of 1929.He exposed quite a lot of the Wall Street practices that Harvard’s Professor William Z Ripley had condemned in 1928. The believable Ripley called them – get ready for these Americanisms – “prestidigitation, double-shuffling, honey-fugling, hornswoggling and skullduggery”.The professor had vainly tried to warn President Calvin Coolidge that Wall Street was full of gas and was bound to blow up. To great discomfort all round, Pecora identified Coolidge himself, by then out of office, as one of those who’d been in on the honey-fugling.The great banking house of JP Morgan had the president on a “preferred list” by which the bank’s influential friends were given a chance to buy stock at half price. Shall we say, they made out like bandits? …People are now struggling for words to describe the latest example of Wall St’s money madness. The fabled investment bank Merrill Lynch, run by one John Thain, had so many big zeroes on its balance sheet it would have been liquidated in December but for a merger with the Bank of America.That was actually a shotgun marriage – in the US vernacular – since the Bank of America was forced to take billions of government money when it learned later that Merrill Lynch was down another $15bn.Then what? In the few days in December while he was still in charge, Mr Thain reportedly spent nearly $4bn on staff bonuses. That’s peanuts on Wall St. In 2007 Mr Thain himself received $83m…he spent $1.1m doing up his office – $86,000 for a rug, $35,000 for something called a commode on legs…The anger about the greed that got us into our mess is, in my view, wholly justified. And now we hear that 10 of the big banks that got $148bn from Uncle Sam so they could make loans to get things humming again have actually reduced their loan totals by $46bn…Mr Thain now is history, having resigned, but the great Bank of America, the biggest in the US and maybe the world is now on the list of banks that may have to be nationalised…http://news.bbc.co.uk/2/hi/uk_news/magazine/7861397.stm

This article refers to the Brookings Institute paper by Elliot that is in the RGE news section. He recommends a “mild form of nationalization”"a somewhat more aggressive takeover of the weaker banks” in “combination with toxic asset guarantees”. His recommendation has so much hedging language I don’t really know what it is! His description of the negatives of the bad bank approach is good. I say you can’t trust the bankers not to gamble and they will lay off all toxics on the taxpayer. All the academics(except the professor) are dancing around the fact that the banks are technically insolvent. What is hiding their insolvency is the “crafty accounting” and ” off balance sheet toxics”.http://www.nytimes.com/2009/02/02/business/economy/02value.html?pagewanted=2&_r=1

Although the US market is overdue for a major bounce (up), it’s still amazing just how much weakness there is in the underlying investment sentiment. Says something. Nothing very optimistic there.PeteCA

and this from NCYES WE CAN!! have a global depression if we really continue to work at it… linkWillem Buiter

I think the professor’s rational approach allows Krugmanto step away from sycophancy!Obama Should Nationalize U.S. Banks, Krugman Says (Update1)Email | Print | A A ABy Brian SwintFeb. 2 (Bloomberg) — President Barack Obama shouldn’t hesitate to nationalize the banks that need to be bailed out, Nobel Prize-winning economist Paul Krugman said.“If taxpayers are footing the bill for rescuing the banks, why shouldn’t they get ownership, at least until private buyers can be found?” Krugman wrote in a column in the New York Times published today. “But the Obama administration appears to be tying itself in knots to avoid this outcome.”His remarks echo those of Nassim Nicholas Taleb and Nouriel Roubini, who said last week that nationalizations will be necessary to bring the U.S. banking system out of insolvency. Obama will require banks to bolster lending in return for government aid, lawmaker Barney Frank said yesterday, stopping short of taking full ownership.Krugman said the U.S. government’s rescue plan appears to put banking risk with taxpayers when loans go bad while giving the rewards to executives and shareholders when things go well. He cited newspaper reports that Obama’s rescue plan will include government purchases of troubled bank assets and guarantees against losses.Treasury Secretary Timothy Geithner said on Jan. 28 that U.S. officials will “do our best” to preserve the banking system run by private shareholders.Global economic growth will come close to a halt this year as more than $2 trillion of bad assets in the U.S. help sink economies from there to the U.K. and Japan, the International Monetary Fund said last week.The world’s largest economy may shrink at a 5.5 percent annual pace this quarter after contracting at a 3.8 percent rate in the fourth quarter, according to a forecast by economists at Morgan Stanley in New York.The government’s $819 billion economic stimulus package is still “very much the right thing to do,” Krugman said.To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net

Treasury Secretary Timothy Geithner said on Jan. 28 that U.S. officials will “do our best” to preserve the banking system run by private shareholders.Isn’t that what Paulson said when he had his one pageTARP proposal!!!TRUST ME! WE WILL DO OUR BEST!!!

follow the money

Maybe you should find a better god to pray to.

http://www.interfluidity.com/Just Remember Rule #1Never, ever feed the Zombies!

What the good Professor and most other mainstream economists are attempting is putting Humpty Dumpty back together again. If all the king’s horses and all the king’s men were not able to be successful even in a nursery rhyme, I really do not think than an imploding, overly concentrated economic system is going to be any more readily reconstructed than a large egg. The dream was that the entire world could be ruled and controlled out of the Federal Reserve Bank of New York, and its allies. But, such concentration of financial clout wound up crashing in an orgy of greed. Structures that were lauded as being too big to fail, now are too big to fix, and the interconnectedness of globalism are spreading that implosion world wide. Rather than trying to frantically try to patch together the doomed and crashing world financial empire, I would rather see Professor Roubini putting his incredible brilliance and expertise into framing a replacement economic system built on workable ideas of human scale in economics. My own thinking is that this would be in line with the upcoming political downsizing that is going to be the case for most of our currently over-sized nation states. There is really no such thing as an entity that is too big to fail. Instead, we are going to have to look at survivability and decentralization, both in economics and in politics, not erroneous notions of economy of scale.

A people for the goverment, a people by the goverment, and a people from the goverment.

Thank goodness they’re back from the ski slopes. We’re saved!Nationalize, privatize, economize, victimize, bailout, TARPize, inflate, FDRize, stimuli-ze….What the financial elite really are saying is that bank insolvency is deeper and more severe than they’ve ever said: Which is why there is this need to give us a new level of lie every week.After they nationalize, they’ve got to do something else, and after that, something else, and after that something else… because the banking system is hopelessly lost, hopelessly insolvent. It can’t be fixed and, especially not with debased currency.The American people want a banking system that is helpful to the economy rather than a banking system that’s an albatross around its neck.America’s banking system has to be built on two things – one is sound money, and, two is trust. As for sound money, the financiers are destroying sound money as fast as they can go with a banker president who’s trying to destroy sound money even more.As for trust, who can trust these people? One day they will say, as Bush said, the fundamentals of the economy are strong, we’ve just had a little rough patch. And the next day Paulson will say, well, the rough patch’s a little rougher that thought, but we know what’s wrong and this is going to do it, and then he says, well, the rough patch’s needs a little more patching…and the financial media will chime in with the American people did this, it was their greed…And, now, the financiers are off the economic summit of Davos, out of the cold…And they’re spreading out to four corners of the world, taking off their ski pants, rolling up their sleeves with the vow: “We’ve got work to do!” And what we need to do, we need to take more money away from the people!“We’ve got work to do,” we can’t be entertained by Bono, we can’t be entertained by Jet Li and Bollywood and Davos jollies, with $1700 Chateau Petrus. What we need is Dr. Doom. And you know what? We know what caused this, it was that crooked Vanguard! We need to bring in that old man Bogle on charges of bankrupting Lehman…They’re back!

There you have it. we have mini Paulson for next 4 years.

Always right on, Peter.Two false flag to cover for covert takeover of the Government1. False flag number one – global war on terror2. False flag number two – global financial crisis.Both used to bring about the takover of the freedom of all lands

Smile (wry) of the dayPer Jon Reynolds, from Jeff Weil’s commercial real estate blog: we have had a boom in Unintentional Affordable Housing.

Toby, you’re fired! “TARP Landings” was supposed to be ready for the Super Bowl commercial contest. It was a sure winner, sure to beat out Denny’s “Thugs” — and you blew it.

This is a great post elaborating on how little deleveraging has actually occured and how far we have to go.We’ve Only Just Begun?http://www.safehaven.com/article-12483.htm

I’ll tell you what, you do that.

The next shoes to drop include, A) Munis, B) States, C) Sovereign entities, D) Dividends, E) PEs are I’m afraid way too high in the USA at the current 12 to 15, they need to be more like 6 to 7— and earnings are decreasing still!, F) Corporate defaults. TIMBER!!! Dow Jones Industrial Average 4k here we come!!!~ Andrew Bernhardthttp://www.google.com/search?hl=&q=+site:www.rgemonitor.com+Bernhardt,+RGE

your response to my comment is ironic but captures the point I was making – e.g. Hansen must be correct because “he’s at the top of his professional field” – only problem is, his field is neither meteorology nor climatology. And then there is the issue of the The Senate report on Global Warming – so it may well be that Theon had political motivations for outing Hansen but then perhaps Hansen also has political motivations.

Pettis’ latest on Tradehttp://mpettis.com/2009/01/all-but-the-kitchen-sink/

Have you heard of this, Andrew? The government is sending out letters to first-time home buyers—offering a $7500 loan, interest free, payable in 15 years at $500 a year.“$7,500 Tax Credit for First-Time Home Buyers” | fromMoney BlogI’ve been hearing a lot about this new $7,500 tax credit for first-time home buyers, which is part of the newly passed 2008 American Housing Rescue and Foreclosure Act. Is it as great as it sounds?To qualify, you must close on your new house between April 9, 2008 and July 1, 2009. A good summary of this tax credit interest-free loan is in this Fortune article:”The ‘first-time home buyer credit’ is a temporary refundable, repayable tax credit equal to 10% of the purchase price of a home, up to $7,500 for singles and married couples filing jointly. (Singles who buy a house together get only $3,750 each, as do married couples filing their tax returns separately.) [...]“But the way the credit works, it’s actually more like an interest-free loan. Two years after you claim this credit, you have to start paying it back. The payback comes over 15 years in 15 equal installments–meaning you owe an extra $500 on your tax return each year. Sell your house, and you have to pay the rest back that year from your profits. (No profits, no pay back. Also, if you die, your heirs are off the hook.)”The allowed credit starts being reduced once a single has $75,000 of modified adjusted gross income, or once a couple has $150,000 of income. The credit goes away entirely at $95,000 for singles and $170,000 for couples.”The justification behind a $7,500 interest-free loan is that it is supposed to ease the “pain” of having to come up with closing costs and a downpayment. But wait… Wasn’t the housing bubble caused in part by people being tempted into buying houses they couldn’t really afford because they didn’t need to first save up for closing costs or a downpayment? I find it ironic that our choice of “buyer assistance” is even more easy lending.Now, of course I would still grab this tax “credit” if I was going to buy a house anyway. I’d happily take a 0% interest loan on $7,500 for any period. But why not just give us something simple and straightforward, like a check for $1,000? My guess is that the phrase “$7,500 tax credit” works better to pacify angry citizens.http://www.mymoneyblog.com/archives/2008/08/7500-tax-credit-for-first-time-home-buyers.html

and then they cry protectionism!!!!!!!!!!some nerve eh?Delving into the truth of corporate taxes has taken our Guardian team months. What they have found is truly shockingBut this we know: a third of FTSE 100 companies paid no tax in 2005-2006, and another third paid a minute proportion of their operating profits. Thanks to avoidance, HMRC says 12 of the UK’s largest firms “extinguished all liabilities in 2005-2006″. Scores more claimed tax losses. The area between tax dodging and reasonable offsetting – of pension contributions, research and development, preventing double taxation, new investment and legitimate reliefs – is the thick fog where lawyers and accountants make their millions. Between the spirit of tax law and its practice, fortunes are made.

This is incorrect. As long as people continue to trade, Gold will be the most solid store of wealth there is, and it is not arbitrary, either. Just because YOU don’t see its value, doesn’t mean others don’t understand it. Gold is:1) Rare2) Beautiful3) Easily divisible4) Portable5) Homogenous6) DurableIf you’re going to put your money into oil or lithium, you better hope that when you need bread, you run into someone who wants it. Meanwhile, I’ll be using gold to buy and sell whatever I need; Gold will always be a universal medium of exchange.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a7wuYIziOVh0&refer=homeObama’s team and American bank regulators are discussing ways to overhaul the bailout fund, called the Troubled Asset Relief Program, in an effort to ensure banks step up lending. Possible strategies include insuring other banks’ hard-to-value investments, and setting up a so-called bad bank that would remove toxic assets from their balance sheets.Obama said today that the U.S. is suffering from a “massive hangover” from years of risk-taking and warned of further bank failures.“They’re going to have to write down those losses, and some banks won’t make it,” he said in an interview on NBC’s Today show.DID SOMEONE OUTSIDE THE COCOON GET TO OBAMA?”THEY’RE GOING TO WRITE DOWN THOSE LOSSES, AND SOME BANKS DON’T MAKE IT” SOUNDS LIKE NATIONALIZATION OF INSOLVENT BANKS”

The man who called the crash – Shiff

The “Great” part I’m not sure about, but the “Depression” part was very early on. I’m reading “The Age of Roosevelt” by Arthur Schlesinger Jr., published 15 years after Roosevelt’s death. I’m sure there are earlier uses of the word “depression”, but in June 1930, a delegation of two men from the National Catholic Welfare Council urged Hoover to immediately expand federal public works. He tells them “Gentlemen, you have come sixty days too late. The depression is over.”

While I’m still very skeptical of President Obama and his economic team, I haven’t written him off for good yet. There is a part of me that wonders (hopes?) that he may not be drinking the Kool Aid, and is instead gently and deftly leading the horses to the water. We’ll see. Hope so.

Good memory, blindman, supported by the Austrian School economist, Dr. Murray N. Rothbard. Here’s what he had to say in “Depressions: Their Cause and Cure”:We live in a world of euphemism. Undertakers have become “morticians,” press agents are now “public relations counselors” and janitors have all been transformed into “superintendents.” In every walk of life, plain facts have been wrapped in cloudy camouflage.No less has this been true of economics. In the old days, we used to suffer nearly periodic economic crises, the sudden onset of which was called a “panic,” and the lingering trough period after the panic was called “depression.”The most famous depression in modern times, of course, was the one that began in a typical financial panic in 1929 and lasted until the advent of World War II. After the disaster of 1929, economists and politicians resolved that this must never happen again. The easiest way of succeeding at this resolve was, simply to define “depressions” out of existence. From that point on, America was to suffer no further depression. For when the next sharp depression came along, in 1937-38, the economists simply refused to use the dread name, and came up with a new, much softer-sound word: “recession.”From that point on, we have been through quite a few recessions, but not a single depression. MNR “The National Series of POLITICS” VOL. IV No 8, March 5, 1969

S&P 500 to Fall as Bank Bailout Stalls, Barclays SaysFeb. 2 (Bloomberg) — The Standard & Poor’s 500 Index will fall, wiping out its 9.8 percent gain since November, as President Barack Obama’s so-called bad bank plan takes months to carry out and the recession worsens, Barclays Plc said.“We suggest putting down the champagne glass and drinking a cup of coffee,” Barry Knapp, chief U.S. equity strategist at Barclays said in a report dated Jan. 30. “The policy euphoria associated with the ‘bad bank’ plan will prove to be short lived.”The S&P 500 jumped 3.4 percent on Jan. 28, last week’s biggest daily gain, when government officials said the White House is moving closer to a plan to buy toxic assets from banks. The complexities of the program mean it will take months to implement, said Knapp, who reiterated his forecast that the U.S. stock benchmark will drop to 750 in the first quarter, the lowest level in 11 years.Economic data that is still “unequivocally negative” will also prevent a rally in the stock market anytime soon, the strategist wrote. The S&P 500 dropped less than 0.1 percent to 825.44 today after the Commerce Department reported U.S. consumer spending fell in December for a record sixth consecutive month.Barclays joins Goldman Sachs Group Inc. in predicting the S&P 500 will retreat back to the Nov. 20 low of 752.44 as approval of legislation to support the economy and financial system takes longer than investors anticipate…http://www.bloomberg.com/apps/news?pid=20601213&sid=aq9GGgCeXDsw&refer=home

Blowin’ In The Wind | Bob DylanHow many roads must a man walk downBefore you call him a man?Yes, ‘n’ how many seas must a white dove sailBefore she sleeps in the sand?Yes, ‘n’ how many times must the cannon balls flyBefore they’re forever banned?The answer, my friend, is blowin’ in the wind,The answer is blowin’ in the wind.How many times must a man look upBefore he can see the sky?Yes, ‘n’ how many ears must one man haveBefore he can hear people cry?Yes, ‘n’ how many deaths will it take till he knowsThat too many people have died?The answer, my friend, is blowin’ in the wind,The answer is blowin’ in the wind.How many years can a mountain existBefore it’s washed to the sea?Yes, ‘n’ how many years can some people existBefore they’re allowed to be free?Yes, ‘n’ how many times can a man turn his head,Pretending he just doesn’t see?The answer, my friend, is blowin’ in the wind,The answer is blowin’ in the wind.Copyright ©1962; renewed 1990 Special Rider Music

OK. I have been reading a lor of blogs and commentary and I think its time I speak up on the so-called sins of the most basic of credit derivatives: The Credit Default Swap. There has been a lot of negativity surrounding this instrument, from being “financial weapons of mass destruction’ (Buffett) to ” believe they are toxic and should be used only by prescription” (Soros). I think its time I clear up this misconception.CDSes are tools and like any other tools, it can be used for good or for evil. CDSes allows investors to get risk where they want risk and take off risk where they want to take off. They can also be used to take a view on the credibility of any corporation, bank or sovereign. CDSes help the credit markets in general because they allow banks or financial intemediaries to distribute their risk to parties that want them. It makes the credit market more liquid and generally promotes risk distribution. Of course, the CDS market can also be used to express a view on the price of credit. No one was complaining when CDSes was tight (and by tight I mean credit spreads of less than 100bps for BB risky names) but everyone is thinking that it is a nuclear weapon when spreads are wide.The pricing of CDSes reflect a more fundamental issue: it reflect the monetary and economic condition of the markets. It is in the failure of regulators and policy makers that created the problem. Central banks made liquidity too cheap and drove a chase for yield. Regulators failed to properly quantify the risks from these derivatives and allowed excessive leverage. Banks let greed get in the way of risk management and took too much counterparty risk without collateral. All these does not have anything to do with the CDS. It just became a avenue through which all these policy failures and errors manifested.This is no different from the FX option, or rate options, or for that matter equity options. As long as there a a buyer and a seller, there is a market. Soros called CDSes asymetric risk. Obviously, he wasn’t long cds in 2004-2006, where everyone who was long protection got fired. The only reason why the CDS is targeted is because it has become a more efficient way of reflecting the price of credit. And the other reason why was in the chase for yield, investors forgot risk and focussed on return. And the regulators let them.Blaming the instrument is like blaming FX options for the collapse of the GBP when Soros attacked it. It is rubbish and generally, a refusal to look in the mirror to see where the blame lies.

Guns dont kill people, people kill people.

But ask yourself who will set the value of Gold after ‘The Apocolypse’? If you have only a bag of Gold and I have bread and water then I’m soon going to have your gold…Best invest in some farmland and the skills to keep yourself alive!Nick.

Very good!

pjb,that is why i love the statement. ” now i know, beauty is life’s revolt against life…”resistance. outright refusal and defiance. and it is the source of hope, that circumstance can change people for the better. interactively and knowingly and intelligently leaning against one another in the creative act of generating visible light. thank you for being sentient. and shining etc.

Who cares what they say about Al-Queda and 9/11 and who knew what when. Simple question: If the towers came down as a result of rigged explosives and not the aircraft strikes would you necessarily have to conclude that 9/11 was an inside job? Before you get all superior and giggly about conspiracy theorists, see if you can think through an answer to that question.OK now I’m going to tell you that several related violations of basic laws of physics, do/did in fact make it impossible for the towers to have collapsed solely due to the fires set by burning jet fuel.The tops of the towers exploded. Just watch the videos. Howe could gravitational collapse cause the explosions? And what weight would be left to pancake down on the rest of the building?The extent of the destruction, the pulverizing of all of the concrete, thousands of tons of it, violates the law of the conservation of energy. Put another way there was not enough energy in the system to do all the damage that was done. Therefore there was an “outside” input–the controlled explosions that blew up and collapsed the buildings.My field was engineering physics but the same conclusions could have been reached by as slightly above average high school physics senior.

Professor R.He called a lot of this. Very well. Others saw the impending crash also. The difficulty is, NONE of the classically trained econ/finance people are really different from that buffoon Bernanke. They can analyze past happenings, make some decent near term predictions, but RUN ANYTHING?????Academics are NOT QUALIFIED to manage anything (even faculty Senates!) and their prescriptions for “Improvement” are either trite or most usually, become irrelevant in the real world. Academics are occupied studying past economies, just like Bernanke.In fact, Bernanke’s biggest flaw is the misguided belief that this DEPRESSION is basically a repeat of the 1929-1940 Depression. All proposed solutions I have seen regarding this Global meltdown, miss one VERY IMPORTANT POINT!!As any good General will tell you, battle plans are tossed once the enemy is engaged. Then it all becomes a matter of “winging it”. We feel we can make NO prescriptive suggestions at this point. The economy is really like the weather. It does, what IT wants to do, YOU have to put on boots or carry an umbrella.Outcomes of this bursting bubble are clearer in general. The average wage earner, and peasant, will be noticeably poorer by 2012-ALL OVER THE GLOBE. Riches will be more highly concentrated in the US, but the financial class will be watched carefully for a long, long time.Possibly, the typical American will regain courage and decide that being serfs to rich criminals is cowardly. And, since the upper classes will not behave in the best interest of the NATION, they can essentially be considered a Fifth Column. In other words enemies of the Country.ENEMIES SHOULD BE TREATED AS SUCH.

There is a valid reason for commodities markets. Producers of the commodity and users of the commodity protect themselves by “Hedging”. In the old days, before the criminals got hold of this term, it meant spending money on a futures contract to provide price protection in a fluctuating economy.This antique style hedging cut profits but insured more stability in the markets. Commodities,still operate pretty smoothly. Crooks like the Hunt Bros ($37/oz silver) usually get caught and hung.

how true, but remember the story about the guy who caught the lepracaun and got him to show him the tree with the gold. He marks the tree with the yellow ribbon only to find when he returns that every tree is so marked. I’m sure on the net there are a lot of yellow ribbons and it is hard to distinguish the true trees from the false.