And perhaps only!!

AIG bonuses is just a drama. Words and poetry is where Obama plays the main street, and action is where Obama plays the wall street. How could they be outraged by 100-odd million of bonuses when they have thrown 160 billion in this bottomless pit. I guess Obama has stopped appreciating the intelligence of the average American. The most hilarious thing of the whole episode is that they said they will deduct “160 million from the next bail-out of AIG”. So, they’d be throwing another 50-60 billion at AIG soon, and to fool the public they will deduct 160 million of money. Besides, what difference would that have made, because 160 million of bonuses have been imparted ultimately, and the bail-outs run as long as AIG burns money. You can pull the right ear or the left ear, but the effect is the same.

On this post:This is great news! Peterson and his gang of merry men are a welcome addition to the RGE fold. I’m glad to have another site to bookmark!

The American Taxpayer has an 80% stake in AIG. With that much say on the board of directors why can’t the bonuses be rescinded since obviously we didn’t approve.

why are you…. ???? They realize it but don’t give a d***..

Just in the Fed is expanding its balance sheet, printing presses just put into high gear!! Dollar getting hammered, shit is hitting the fan

BIG TIME

Gold Rocketing back up! Wow! Fed buying 750B agency backed mortgage. Fed buying buying treasuries,..Gross,..”Inflationary implications”,..

Dollar down over 2.5%! This is the Weimer experience at its finest. Santelli,..”The Market is not the pricing force,..I find that rather disturbing.”

If you think they won’t find an analogous process to print in euroland, your dreaming. We are in the land of competitive devaluation. Only gold will remain unscathed.

“I guess Obama has stopped appreciating the intelligence of the average American.”The “average Amrican” is worse than a DONKEY. Average American has no brain, no intelligence … zippo. Otherwise, how the hell any “average intelligent American” could have voted for a community organizer? Not for a seat in a local town city council — but the the most prestigious office on the planet earth!Average American is a fool. No more proof needed after they voted for this Fraudorama.

Exactly. But they don’t actually want to, just to create this public melodrama and play around with words with the American people.

8 months in the making…. Evaporflation:http://www.rgemonitor.com/globalmacro-monitor/256056/evaporflationMiss America

Well, it makes sense. The depression charts show two bubbles being burst. In my mind, the bursting of this second bubble will imply a depression. If this second bubble doesn’t burst, then the US will recover soon, but at the expense of sacrificing a decade or two of growth at potential.

just saw a story on it – i’ll confirm.

US DOLLAR IN FREE FALL

would somebody kindly educate me as to what has happened today? I see the market go crazy and the dollar get killed – all because the FED says they’re going to buy some Treasuries.I’m no economist, nor an investor, so I don’t understand what occured. Can someone spell it out in simple(ton) terms?

http://finance.yahoo.com/tech-ticker/article/211012/Geithner-Caves-on-AIG-Bonuses%2C-Defends-LiddyGeithner Caves on AIG Bonuses, Defends Liddy”Tim Geithner is now completely on the defensive. In a long letter to Nancy Pelosi, he explained how and why he approved the AIG bonuses (troubling) and described a plan to “recoup” them. The letter will not likely stop the growing chorus of criticism that may well drive Geithner out of office.Geithner’s new plan will not “recoup” the bonuses at all: It will merely reduce the amount of the next taxpayer handout to AIG from $30 billion to $29.835 billion. This is not likely to quell the outrage: What most people are angy about is that AIG paid $165 million of taxpayer money in “retention” bonuses to executives who blew up the firm (many of whom aren’t at the company anymore).The more troubling part of the letter, though, is Tim Geithner’s description of his own approval of the bonuses. He says he registered “strong objections” and then asked for a written legal analysis of why the bonuses had to paid. This does not sound like the behavior a man who has the balls necessary to stand up to the many constituencies that want to roll right over him right now (which is the kind of man we need during this crisis). It sounds like the behavior of a man who is already thinking of how to defend a decision he knows is a bad one.”People are saying Geithner’s in trouble – I disagree. If Obama were to throw him off the bus right now, every enemy of the man would smell blood – it would be a capitulation of the highest order.Incompetent or not, Geithner’s our man – care to disagree?

and eventually, dollar denominated debt will worth less in long term. watch out for Treasury and Agency to do it inevitable decline as it priced in weak currency. initial strength in USA debt should be used to sell.

with “no one else will buy them” being the key point…

Is Fed’s 300 Billion purchase in longer-term US Treasuries in next six month just the initial installment in a loooooooooong series not too far away? I guess it will become 300 Trillion USD soon.

Octavio,Welcome back! Haven’t seen your name around for a bit. Weren’t you travelling? Any good stories?

Wednesday, March 18, 2009A sad day for America.PeteCA

Pete,But this is like playing poker with the mob. Once you’re in the game, you’re in until you’ve lost your money, your dignity, and quite possibly, your life.What you’re proposing is the rational response to what is occuring in the States -but as we’ve all seen, what actually happens is more often than not *irrational*.I think you’re right – there will be a tipping point. But I’d be willing to wager that quite a few of the countries wrapped up in the dollar will be willing to ride this boat down to the depths of Davy Jones’ locker rather than risk upsetting the Godfather…

I went to Patagonia a couple weeks ago. Awesome sights! Lake Alumine, Villa Peheunia: http://www.villapehuenia.org (I got the tip from a friend who has a cabin there). Forget Bariliche, San Martin de los Andes; those places are too touristy.Good stories? I turned off the EPS system in my van while driving on gravel (a big mistake)and almost rolled over!I just finished my taxes so I will try to post more frequently. We are now preparing to leave Argentina on April 03 until early October at which time I will really go under…

quantitative easing of gigantic proportion.

Per the Drudge ReportTHE REAL AMERICAN IDOL: OBAMA SETS PRIMETIME NEWS CONFERENCE, TUESDAY, MARCH 24, 8:00PM ET… DEVELOPING…The way this guy likes the camera, he should’ve been a movie star. Then he could be Reagan Jr.

No, Honcho Ben doesn’t print money … he simply adds zeros on the right-hand side of the balance sheet.

reality is anything you can get away with OR it’s only money dummy:http://www.nytimes.com/2009/03/19/business/economy/19fed.html?hp

not inflationary yet as mark-to-market values still plummeting so overall deflation still in force but once that tapers off, likely to be big time hyperinflation…

THE FED END GAMEby Mikkel Fishman3/18/2009People are rightly outraged about the AIG bonuses [um, why not the Merrill Lynch ones that were far bigger and possibly involved outright fraud?] but the amounts involved in that are tiny compared to the size of our problems. I would agree that the bonuses themselves are huge problems that far outweigh their monetary value because they are reflective of an insular, entitlement mentality that has captured the Street and the Treasury Department. Until the culture has been broken then we will continue to see a mess.Anyway, forget all that for a second.An hour ago the Fed announced it was buying another $750 billion in mortgage backed assets and will start purchasing long term treasuries, the first installment at $300 billion. In short, this is the long awaited “monetization of debt” that people have been expecting, or in other words, they are just printing money to simultaneously try to keep interest rates low and inflation expectations high (those are contradictory I’ll get to it in a second) with the hope that asset values will increase. Ben Bernanke gave a famous speech where he said deflation was impossible in a fiat system because they could just do a “helicopter drop” or in other words, print money. The idea was proposed by Milton Friedman as a way to avoid a depression.This is potentially the start of the biggest gamble that the US government has taken with its currency since moving off specie and may have profound consequences for decades.So the idea is that the treasury prints money, the Fed then uses that to buy long term bonds to keep down interest rates and encourage investment, and then the money goes into circulation. Theoretically that money will cause inflation and — coupled with low interest rates — people will stop saving money and start buying stuff, getting out of the deflationary spiral and then we are all happy. There are a few minor problems with this.First of all, it’s a game of chicken. If inflation is going to rise then you don’t want to have bonds, so you’d sell them and cause the yields to rise. The more people that sell, the more the Fed has to buy to keep them down, meaning the more money has to be printed, meaning the more inflation expectations will rise…etc. This can cause “embedded inflation expectations” which means that people will stop paying attention to reality and cause rampant inflation. This is what happened during the 70s, which ironically is what Friedman won the Nobel prize for, although the embedded inflation expectations in the 70s were due to an external resource shock rather than monetary policy per se. So then at some point the Fed has to stop and raise interest rates enormously to stop inflation expectations. If it does it too soon, well we’d have a Depression still (worse this time) and if it does it too late, then our currency would be completely devalued against either other currencies or real goods (if all currencies are devaluing). When is that right time? Well no one has ever successfully used this, so no one knows. I’d argue that there is no right time because they operate on different timescales, so it’s impossible to thread the needle…but their models say differently.Secondly, if there is a lot of inflation, that needs to go out into wage inflation or else everyone without a lot of assets will just become a lot poorer. To say that our society doesn’t have the structure to have wage inflation take hold is putting it mildly. Also, as my post a few months ago mentioned inflation won’t come across things evenly. Even if there is inflation that takes hold, then housing still won’t increase much in value, but basic materials will skyrocket. So we’d have all the problems we have today but make it harder for most people to afford necessities. The banks still won’t lend very much because people are too indebted, but now the rich market makers will have lots of money so bubbles will form in lots of stuff.In short, by trying to avoid a depression, they are punishing savers and rewarding debtors, and doing it in a way that makes the people that messed up have more wealth.As the Wikipedia article on the Helicopter Drop states:Milton Friedman suggested that a monetary authority can escape a liquidity trap by bypassing financial intermediaries [in this case we can’t because they have too much power] to give money directly to consumers or businesses [or large investors, which is what this is]. This is referred to as a money gift or as helicopter money. The term helicopter money is meant to portray the image of a central banker dropping money on people from a helicopter. Political considerations make it difficult for a monetary authority to grant the money gift, because individuals and firms not receiving free money will exert political pressure. The monetary authority must act covertly to give gift money to specific individuals or firms without appearing to give money away.In essence it is a transfer of wealth far greater and more insidious than any tax increase and in the present environment will most likely be borne the most on the poor and middle class. As my friend succinctly put it after I described the theory (before stating my personal opinion): “so they are, in practice, devaluing all industry and commerce which hasn’t failed.”There is a chance that they will start down this path and blink because it’s too big, and we’ll have a very fast Depression as they pull the plug and give up. This is literally the last tool they have and if it fails then there is nothing left. There is also a chance that they will continue to do the policy until inflation gets wildly out of control, threatening the security of the US dollar (especially if China decides to sell off its treasuries) or fiat currency in general (the UK started something similar and most countries will follow). This is why gold shot up a ton today. I think there is a small chance that it’ll work as intended, for the reasons I detailed in my series in the fall (here, here, here).Don’t get me wrong, the steps that they have announced thus far are not large enough to really change things one way or the other. This is merely a $300 billion (well $1 trillion with mortgages) test balloon to try and influence people’s behavior. Of course this is like the 50th thing that they’ve done to manage expectations and those have all failed, and at this point people are being tricked for shorter and shorter periods of time, so the real question is what they will do over the course of the next year when the economy fails to pick up.If you think we’ve seen a wild ride so far, just know that we ain’t seen nothing yet. This is going to make the moves in the bond and currency markets even worse, which will cause extreme volatility and lead to more failures. Even if the policy eventually works, it’s going to shake the system to the breaking point…whether it breaks and falls apart or rights itself at the last instant, I don’t really know; the entire environment is getting too ahistorical to try and predict. I for one am desperately hoping that people across the spectrum will wake up and start demanding policies that will preserve the integrity of the government, even though that means deflation and a depression. We can work through that, but it’s less clear how to work through the other.

The bonus issue is just a diversion to keep reporting off the real larceny. AIG has been paid by the government and then paid out over $100 BILLION dollars to investment bankers.The bonus money is just chump change to keep these guys quiet.

I may be wrong, but If other countries try to leave the dollar/treasuries that just puts upward pressure on their own currencies thus hurting their export industries right? So isn’t it more likely that we will just see printing by other central banks? If the printing is coordinated amongst the major central banks, that would prevent the dollar from sliding too much, at least relative to other currencies correct? Or if they take turns printing (and give certain insiders a little nod ahead of time) playing the swings could be a source of income for those insiders correct?I’m just a 25 year old college dropout who has never taken an econ course in my life, so let me know where/if I am wrong

When it comes to the financial establishment, it’s always good to expect the unexpected. Something will happen down the road that will cause the Fed to tighten up the money supply. It will probably coincide with the market reaching its true long term bottom. The Fed will start raising rates. The public will move into cash, and the stock will be left to the exchange members.

great post.

Democrats have no credibility. They are playing political games, approving all the throwing of money insidiously, and then coming in public to blast the bonuses to get political points, and provide therapy to “main street” so to speak. I have no faith in democrats anymore. Republicans might be short of insights and “stupid” as some call them, but democrats are just plain hypocritical.

If the Chinese could start spending locally rather than lending in worthless paper, and the world reacts to it by dumping the dollar, then the world order might be recreated. The Chinese should lend to India, emerging economies, and tap the potential there. The world is at a crossroads and they are asking the Chinese the question, can you show leadership and vision like America has in the past, and so far the Chinese have been weak, to pass on the mantle back to the US.

Jimmy Buffet has a new one too called “A lot to Drink About”Here’s part of it:”Now the family devaluesand little children count their net worthand the truth wherever it’s hiding,can be found on Google Earth.Citibank’s buying jets with our money.I wanna flog ‘em with a buggy whip.I hope Obama and Joe won’t let the volcano blowand patch the hole in our sinking ship.It’s the price of oil,the war of the spoils.Here’s your bucket for the big bailout?Iraq, Iran, Afghanistan,We’ve got a lot to drink about”

Does anyone think that Nouriel wasn’t expecting the drastic $1.15 trillion expansion of the balance FED’s sheet? I’m wondering if he is still standing by his “Dead Cat Bounce” post now with the recent FED action? Doug Kass is calling the March 6th bottom the “Roubini Bottom” and that it was a “generational low” never to be violated. Basically Kass is saying that we are in full blown bull market now and the bear market is over.http://www.thestreet.com/story/10474021/1/kass-rally-through-summer.html

This is all about debt and credit. Today, US bonds and treasuries became a “game of chicken”. You decide where you want to park your money.PeteCA

“$1.15 trillion expansion of the balance FED’s sheet” will not be the last expansion. dont bet against FED.

well, they are trying to get rid of mark-to-market. i think they will succeed in doing it.

FED brought out Bazooka to wipe out short from time to time. Today, short got seriously violated. dont bet against FED’s determination to do quantitative pumping.

Further to the above – I am just watching the Obama “townhall meeting” stream.His explanations are weak, and his presentation weaker, than I had been expecting. Is the Obama bubble over already?(note: I am apolitical – at least in the rigged nonsense perpetrated by this great nation)

This was the standard method politicians use: it’s called CYA; the only problem is Geithner is too big of an Ass for it to be adequately covered!

Pete’s Level of Impossibility =’s The Humpty Dumpty ThresholdHumpty Dumpty AnimationIn Case You Are Wondering Who This Is – It’s YOU!Dear Professor,Please feel free to use the Humpty Humpty business in any of your economic outlooks – I lay no claim on this verbiage – it belongs to all of mankind.

Why? Because when the BLACK SWAN event hits there will be no place to hide.

mark this day on your calendar the future isdarkening

Asset deflation currently, the CPI inflation will come when and if the dollar drops against other currencies. All the imported consumer products will cost much, much, more. The question here is will the Chinese de-peg from the US dollar

This is a dark day in financial history. Remember March 18, 2009. It is the beginning of the end of the status of the US$ as the world reserve currency. It may be the day the world takes its first step to World War 3.If I sound gloomy, it is because I am. Once the world has taken this path, there will be almost no way to get off it. Politicians and central bankers who focus on the short term, will doom us all for the medium and long term. The likelihood of a hyperinflationary inflation has just shot up dramatically. Now its time to see what China and Japan and the rest of the world who holds the US$ as reserve do. This is nothing more than default via debasement. We are all about to pay the price for it.Is there anymore hope?

sorry I forgot to give a citation for the above quotehttp://www.federalreserve.gov/boardDocs/speeches/2002/20021121/default.htm

and from the above link another excerpt:”The conclusion that deflation is always reversible under a fiat money system follows from basic economic reasoning. A little parable may prove useful: Today an ounce of gold sells for $300, more or less. Now suppose that a modern alchemist solves his subject’s oldest problem by finding a way to produce unlimited amounts of new gold at essentially no cost. Moreover, his invention is widely publicized and scientifically verified, and he announces his intention to begin massive production of gold within days. What would happen to the price of gold? Presumably, the potentially unlimited supply of cheap gold would cause the market price of gold to plummet. Indeed, if the market for gold is to any degree efficient, the price of gold would collapse immediately after the announcement of the invention, before the alchemist had produced and marketed a single ounce of yellow metal.What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.Of course, the U.S. government is not going to print money and distribute it willy-nilly …”

and this idea reminiscent of Japan from the same link”So what then might the Fed do if its target interest rate, the overnight federal funds rate, fell to zero? … One approach, similar to an action taken in the past couple of years by the Bank of Japan, would be for the Fed to commit to holding the overnight rate at zero for some specified period.”

but the better solution according to the link above is this: (sound familiar)”A more direct method, which I personally prefer, would be for the Fed to begin announcing explicit ceilings for yields on longer-maturity Treasury debt (say, bonds maturing within the next two years). The Fed could enforce these interest-rate ceilings by committing to make unlimited purchases of securities up to two years from maturity at prices consistent with the targeted yields. If this program were successful, not only would yields on medium-term Treasury securities fall, but (because of links operating through expectations of future interest rates) yields on longer-term public and private debt (such as mortgages) would likely fall as well.”

See below. You are assuming that they want to have hyperinflation in their own country. Can you see that happening?Bernanke has just endangered the world. And I think the world will bite back.

… Hard to see the future is – cloudy is the dark side…

Well, seeing that the dollar only lost 3% on the $1.15 trillion announcement, the FED could do and additional $4.60 trillion of printing and give it all to the banks in the form of “free money”. At 3% per 1.15 trillion the dollar would still be above its 2008 low. The dollar has gained through deflation/deleveraging. So in essence the FED could expand its balance sheet an additional $5 trillion and the dollar would still be in relatively good shape. The dollar amount of the deleveraging losses is now absorbed into the equity of the USD through dilution. The “The banks should pay with their equity” additude is no longer in vogue in Washington – that is now obvious. The FED is making a statement that the “sins” of the banks will be compensated for with the dilution of the US dollar. The “franchise value” of the banks will not be sacrificed, and the dollar will take the hit. All the crooks keep the cake and eat it too. And all Americans pay for the sins of the crooked gamblers.The big question is will everyone just sit back and watch this unfold or will they do something about it?

It looks like the Fed cat is back, and the short mice will have to go into hiding, at least for a while.If da’ bears don’t grab some terrain in the next few days, the market should get close to wiping out its YTD losses soon, which would mean at least another 100 points on the S&P.BTW, IMHO, Benny did what needed to be done and I highly doubt the Professor will criticize his latest move.Yes, I am ready to get tomatoes thrown at me, but it looks like the ‘lucky stars’ have lined up in a way such that this country has gotten the president and fed chairman it needs to get better. The reality seems to be that the patient was gravely ill but never visited/will visit the intensive care unit.Do not underestimate the training and the brains of the Fed Cahirman. Bet against him at your own peril:-)From the WS Journal#1 rated forecaster for 2008:Hatzius Sees GDP Growth in Second Half, 10% Unemploymenthttp://www.bloomberg.com/avp/avp.htm?N=av&T=Hatzius%20Sees%20GDP%20Growth%20in%20Second%20Half%2C%2010%25%20Unemployment&clipSRC=mms://media2.bloomberg.com/cache/vyh.GUfFx_L4.asf

Agreed.

http://www.youtube.com/watch?v=MdsnIYurpSM

nay, i think countries around the world will follow USA’s lead into debasing currency spiral. gotta keep ponzi game going.

Remember those tugboats??? theyre coming out from the harbours..

Better yet, we own 80% of AIG. So bailout will be us paying ourselves, but these bonuses were us paying the employees.We can never get the money back, by “deducting” it from a bailout of a company we already own.Allowing these bonuses was just more of the intentional Keystone Kops act whereby they loot trillions from us.But I see that things are getting beyond the financial sphere and the personal safety of some individuals is coming into question. It’s the new trend and it’s going to grow.

or? and..http://www.theologywebsite.com/etext/egypt/osiris.shtml

What are the dollar PUT’s doing?PeteCA

Yup.Quit using TPTB’s money. Look to develop and use local currencies.Mark

Pardon the expression, but a broken clock is right at least twice a day…Eventually, if one believes that everything is cyclical, what you state WILL occur. It’s a matter of time. I was about 3 years early in calling this collapse Took a lot of ribbing (now no longer).So, care to place some sort of constraint on your prognostication? Are you thinking a month, 6 months, a year?Mark

Since we cannot pay the debts we must default.A simple logical statement. It would have been treasonous for the US government to deny its citizens this relief.

Did you see my plug for you on Roubini’s blog – citing your evaporflation theory? Go check it out on yesterday’s blog.

What do you mean? US has just nuked China and Japan.

This star – it wouldn’t be the reflection of the orbiting space station, would it – it’s luminosity can be surprisingly bright at times?Ho hum

it flickered!!from my understanding satellite just reflect the suns ray/light, so it would be yellow coloredplanets reflect the suns light like our moon would, so its white colored, not flickeringthis thing emits rays of blue and red, and compared to other stars, it’s really brightand it’s easy to find, just direct yourself towards SSW and Voila it’s there..

LB wrote:

Creditors and savers (the Chinese, Japanese, Russians and Gulf Arabs) will notice the value of all their assets being eroded, and notice the negative return on lending cash or investing in the USA, UK and other bubble states. They will shift out of bubble states, directing investment inward to support their own growth and regional development.

Support their own growth and development you say? I beg to differ. Investment doesn’t rhyme with these countries.Chinese and invest? The communist political model is unable to match investors and entrepreneurs. No wonder they kept buying treasuries since they couldn’t spawn entrepreneurial operating assets!Japanese and invest? When was the last time you heard from a keiretsu bank?Russians and invest? In Oil? In Oligarchs? No can do!Gulf Arabs and invest? In Real-Estate? In Oil? Uh, no. They’re both busted now.They’ve gotta stay with the dollar since they don’t have alternative ‘shadow’ assets to invest in any more.May the USD be with you.Ben, Print without fear. Take the poison out of the blood and apply the balm of the greenback on the innards.Mission Accomplished. Old jungle saying: You can’t fight the Fed. The 2002 note machine has been activated. Can you hear it go whirr?Best,Print First Ask Questions Later.

wolf:I don’t think Bernanke did this in a vacuum. Remember the G-20 meeting? I’m very sure everyone there got clued into what the FED was planning so they could digest it and make plans accordingly. just MHO.

Because you don’t get to hundreds of billions without pi**ing away hundreds of millions.I used to do comp contracts, and they always had an out for events of fraud, misrepresentation and usually had clawbacks for error in calculations. I’m sure one of these applies in the case of the rocket scientists at AIG, and would have been employed by an Administrator if that fine firm had found its way to bankruptcy, where it belonged … then again, in Bankruptcy AIG wouldn’t be useful as a conduit to pump money to the FOPs, now the FOGs. So we really must be getting our moneys’ worth for the $165m when seen from the perspective of Mr. G.

There was some chance if you were following the integrity of Vikram Pandit.Best,P1AQL.

Mr. Roubini believes in Keynesianism. I don’tget it. Is there one iota of evidence that anyof these monies are going to raise declining realwages, increase home affordability for brokenconsumers, or create new jobs. Please. Whatindustries haven’t offshored most of their goodjobs?

It is Venus. Venus gets surprisingly high in the sky and can be seen until about 10PM. It is yellow and in the SSW portion of the sky.Anyone see comet Lulin in Leo a few weeks ago? I saw it. It was pretty cool.

Kudos to the Fed and Ben Bernanke. As I have said before, they will use the threat of inflation and if that does not work inflation itself to pry dollars from hands of dollar hoarders and put them into circulation and creating wealth again.

@ El-le…Stan Rogers – Barrett’s PrivateersOh, the year was 1778, HOW I WISH I WAS IN SHERBROOKE NOW!A letter of marque came from the king,To the scummiest vessel I’d ever seen,God damn them all!I was told we’d cruise the seas for American goldWe’d fire no guns-shed no tearsNow I’m a broken man on a Halifax pierThe last of Barrett’s Privateers.Oh, Elcid Barrett cried the town, HOW I WISH I WAS IN SHERBROOKE NOW!For twenty brave men all fishermen whowould make for him the Antelope’s crewGod damn them all!I was told we’d cruise the seas for American goldWe’d fire no guns-shed no tearsNow I’m a broken man on a Halifax pierThe last of Barrett’s Privateers.The Antelope sloop was a sickening sight,HOW I WISH I WAS IN SHERBROOKE NOW!She’d a list to the port and and her sails in ragsAnd the cook in scuppers with the staggers and the jagsGod damn them all!I was told we’d cruise the seas for American goldWe’d fire no guns-shed no tearsNow I’m a broken man on a Halifax pierThe last of Barrett’s Privateers.On the King’s birthday we put to sea, HOW I WISH I WAS IN SHERBROOKE NOW!We were 91 days to Montego BayPumping like madmen all the wayGod damn them all!I was told we’d cruise the seas for American goldWe’d fire no guns-shed no tearsNow I’m a broken man on a Halifax pierThe last of Barrett’s Privateers.On the 96th day we sailed again, HOW I WISH I WAS IN SHERBROOKE NOW!When a bloody great Yankee hove in sightWith our cracked four pounders we made to fightGod damn them all!I was told we’d cruise the seas for American goldWe’d fire no guns-shed no tearsNow I’m a broken man on a Halifax pierThe last of Barrett’s Privateers.The Yankee lay low down with gold, HOW I WISH I WAS IN SHERBROOKE NOW!She was broad and fat and loose in the staysBut to catch her took the Antelope two whole daysGod damn them all!I was told we’d cruise the seas for American goldWe’d fire no guns-shed no tearsNow I’m a broken man on a Halifax pierThe last of Barrett’s Privateers.Then at length we stood two cables away, HOW I WISH I WAS IN SHERBROOKE NOW!Our cracked four pounders made an awful dinBut with one fat ball the Yank stove us inGod damn them all!I was told we’d cruise the seas for American goldWe’d fire no guns-shed no tearsNow I’m a broken man on a Halifax pierThe last of Barrett’s Privateers.The Antelope shook and pitched on her side, HOW I WISH I WAS IN SHERBROOKE NOW!Barrett was smashed like a bowl of eggsAnd the Maintruck carried off both me legsGod damn them all!I was told we’d cruise the seas for American goldWe’d fire no guns-shed no tearsNow I’m a broken man on a Halifax pierThe last of Barrett’s Privateers.So here I lay in my 23rd year, HOW I WISH I WAS IN SHERBROOKE NOW!It’s been 6 years since we sailed awayAnd I just made Halifax yesterdayGod damn them all!I was told we’d cruise the seas for American goldWe’d fire no guns-shed no tearsNow I’m a broken man on a Halifax pierThe last of Barrett’s Privateers.

The cat is out of the bag and climbing upwards in a bounce of all bounces.The FED has begun to seriously Bet-The-Country. Will they succeed in reflating the economy? Will the global economy follow?Marc Faber said a few weeks ago that the USA was practicing Zimbabwe economics and to expect 200%/year inflation in the USA. No time line given.I can’t get my head around the suffering that is about to be unleashed. All because of a few rotten apples in the barrel.US Inflation Could Hit 200%…

@ Mark,Are you refering to evaporflation or my gold call?My gold call has 2 months left to play out. At the moment I look extremely wrong. …but my being right/wrong is so impossible to call right now because of the current state of evaporflation that WE ARE IN. (and we did experiance condenflation for about 4 years)I think the book needs to be re-written to basic economics. I don’t think such a large artificial force was ever accounted for. (large to the point of difference making)Miss America

great comment on CNBC just now – an analyst stated that the Fed is printing 1 Trillion Zimbabwe dollars – he then holds up a 100 billion Zimbabwe note, which can buy a loaf of breadhe concludes 40% of potential money that could go to equities is sitting in Money Market earning zero – that money is now at risk due to inflation e.g. it will be forced into equities.

Goldman Sachs (Jan Hatzius) sees (Mild) recession this yearJan. 9, 2008WASHINGTON (MarketWatch) — … Goldman Sachs chief economist Jan Hatzius said he now expects a mild recession lasting two or three quarters this year, with a cumulative drop in gross domestic product of about 0.5%. “The latest data suggest that recession has now arrived, or will very shortly,” Hatzius wrote in a note to clients Wednesday. The Goldman economist expects the jobless rate to rise from 5% to 6.25% by the end of the year. The Federal Reserve is likely to cut its overnight lending rate target from 4.25% to 2.5%, Hatzius said. He expects consumer spending to decline for the first time since 1991http://www.marketwatch.com/news/story/goldman-sachs-sees-recession-year/story.aspx?guid={958F9640-9AD3-44A1-AA2B-E0097C111D3F}

read my lip, Fed is not done with $1.2Trillion Zimbabwe dollars. He will print and print until money sitting on sideline move into equity. money sitting sideline just waiting for its value to go done with Ben’s massive printing.

Good article. What I get from it is that the FED purchase of 300 billion is kinda peanuts amount. Benny is gonna have to buy more:-) There are of course, inflationary implications, which is what unfortunately the US needs to get out of this mess. Datz one of the reasons I hedge my bets by moving some money from cash/fixed income into equities/commodities.But also note that according to the some of the brightest economists: Shilling, the Professor, Hatzious (sp?), Kasriel, deflation/no-inflation is watz on the cards.

My response above to Miss Italy on Yves latest:Good article. What I get from it is that the FED purchase of 300 billion is kinda peanuts amount. Benny is gonna have to buy more:-) There are of course, inflationary implications, which is what unfortunately the US needs to get out of this mess. Datz one of the reasons I hedge my bets by moving some money from cash/fixed income into equities/commodities.But also note that according to the some of the brightest economists: Shilling, the Professor, Hatzious (sp?), Kasriel, deflation/no-inflation is watz on the cards.

Great point. Diz is precisely the reason I moved into [now close] to 40% risk. But will cut some of the exposure as long as diz bull runs out of time (not in the cards just yet)

For some reason my “safe” high dividend stocks MO, PFE, PG, are down while speculative/technology MSFT, TIE issues are up. I don’t have the slightest idea how to interpret this.Short covering? the “safe” stuff is perceived as less undervalued. PG PFE should rally on a weak USD.

Octavio – I posted a link a few weeks ago featuring Chanos on for profit educcation (shorting) did you see it? if not I will repost

This is an opportune time to use the dollar for purchasing. After the economy is rolling again interest rates will see higher averages I am sure and yes, buying shares of good solid companies at lower than average valuations is also very good right now.

Chinese think they are so smart, swapping long date Treasury and Agency debt into short term treasury. Then come will $1.2Trillion dollar printing that wack them with forex loss. at least long date treasury and agency will pare some loss, because they go up in value. but short term treasury holders will take heaviest absolute forex loss pounding. but eventually forex loss will come to long date treasury and agency holders (and the fact, these securities are toxic will compound the loss)

Ok based on the Fed deciding to monetize the debt how should one invest if they are vested in the Gov’t TSP account which tracks index funds. I’ve been hunkered down in the G fund (Gov’t securities) for over a year and was able to hold on to most of my chips during the market downturn. What’s the strategy now..start moving into stock funds like Bernanke is “banking” on people doing since bonds will get hit?

Thanks for that link – a picture really is worth more than a thousand words. Chilling….

A while back on this blog someone asked if “inflation” would be affecting asset prices. Well, starting today you can see the market adjusting now to the very real threat of high inflation levels in the future. That doesn’t mean we will have double-digit inflation today or this week. But very definitely you can look at market responses and see the shift towards inflation protection – as the market begins to look forward.Meanwhile, I think that average Americans must be getting frustrated, angry and depressed by what is happening to THEIR money. It seems that every taxpayer dollar that we give to Congress is just getting bundled up on trucks, sent over to Helicopter Ben, and handed straight to the Wall Street banks. Americans are going to start wondering very seriously – what is the point of contributing tax dollars if this keeps up? There was a time when taxes were supposed to be used for the collective good of our country as a whole. It’s very difficult to see our hard-earned money being abused in this way. Congress needs to think about this quite seriously.PeteCA

sounds like what Senator Grassley will say.

I’m not gonna lie – these new developments have me in a daze. I don’t feel like I have any point of reference, and the schism that’s opened up between those who are calling this the beginning of the end of the recession versus those who are calling it the beginning of the end of the U.S. is troubling, to say the least.Here, though, is something I can understand:http://biz.yahoo.com/ap/090319/economy.htmlNew jobless claims drop more than expected to 646,000; continuing claims set new recordThat’s real human suffering right there. While the folks in Washington experiment with the future of our nation, people are hurting, and they need help. It’s not going to come from Washington. We need to mobilize on a local level. Find out who needs your help, and serve them.

World economy to shrink ‘for first time in 60 yrs’http://www.breitbart.com/article.php?id=CNG.fe9fec32d48b8af35fec6efbf0bf940b.461&show_article=1In a report prepared for the Group of 20 meeting of finance chiefs last week in Britain and published Thursday, the IMF slashed forecasts from two months ago to a global contraction of between 0.5 percent and 1.0 percent.

It’s even worse because all the money the government is spending is going into the hands of the top 1%, there is a shortage of dollars on Main street. The FED is all a trickle down economics scam because the banks will not loosen their lending standards. This is all leading to massive consolidation of power and wealth. There won’t be inflation of wages just inflation of rich peoples bank accounts, then the dollar will collapse because the governments can’t pay their pension and food stamp recipients and foreigners will gobble everything up. All and all it ‘s a sickening form of wealth redistribution, they’ve done almost nothing so far to save the actual economy or create jobs. The little guy will be killed by rampant inflation and low wages or no jobs period, that is until we’re all on the same economic level as the Chinese.

I just watched Farber advise everybody to get a farm and a shotgun on an ABC Australia stream.It’s here if anybody is interested…

A Program of Financial ConcentrationWas the Bailout Itself a Scam?By PAUL CRAIG ROBERTSProfessor Michael Hudson (CounterPunch, March 18) is correct that the orchestrated outrage over the $165 million AIG bonuses is a diversion from the thousand times greater theft from taxpayers of the approximately $200 billion “bailout” of AIG. Nevertheless, it is a diversion that serves an important purpose. It has taught an inattentive American public that the elites run the government in their own private interests.Americans are angry that AIG executives are paying themselves millions of dollars in bonuses after having cost the taxpayers an exorbitant sum. Senator Charles Grassley put a proper face on the anger when he suggested that the AIG executives “follow the Japanese example and resign or go commit suicide.”Yet, Obama’s White House economist, Larry Summers, on whose watch as Treasury Secretary in the Clinton administration financial deregulation got out of control, invoked the “sanctity of contracts” in defense of the AIG bonuses.But the Obama administration does not regard other contracts as sacred. Specifically: labor unions had to agree to give-backs in order for the auto companies to obtain federal help; CNN reports that “Veterans Affairs Secretary Eric Shinseki confirmed Tuesday [March 10] that the Obama administration is considering a controversial plan to make veterans pay for treatment of service-related injuries with private insurance”; the Washington Post reports that the Obama team has set its sights on downsizing Social Security and Medicare.According to the Post, Obama said that “it is impossible to separate the country’s financial ills from the long-term need to rein in health-care costs, stabilize Social Security and prevent the Medicare program from bankrupting the government.”After Washington’s trillion dollar bank bailouts and trillion dollar gratuitous wars for the sake of the military industry’s profits and Israeli territorial expansion, there is no money for Social Security and Medicare.The US government breaks its contracts with US citizens on a daily basis, but AIG’s bonus contracts are sacrosanct. The Social Security contract was broken when the government decided to tax 85% of the benefits. It was broken again when the Clinton administration rigged the inflation measure in order to beat retirees out of their cost-of-living adjustments. To have any real Medicare coverage, a person has to give up part of his Social Security check to pay Medicare Part B premium and then take out a private supplemental policy. The true cost of Medicare to beneficiaries is about $6,000 annually in premiums, plus deductibles and the Medicare tax if the person is still earning.Treasury Secretary Geithner, the fox in charge of the hen house, has resolved the problem for us. He is going to withhold $165 million (the amount of the AIG bonuses) from the next taxpayer payment to AIG of $30,000 million. If someone handed you $30,000 dollars, would you mind if they held back $165?PR flaks have rechristened the bonus payments “retention payments” necessary if AIG is to retain crucial employees. This lie was shot down by New York Attorney General Andrew Cuomo, who informed the House Committee on Financial Services that the payments went to members of AIG’s Financial Products subsidiary, “the unit of AIG that was principally responsible for the firm’s meltdown.” As for retention, Cuomo pointed out that ”numerous individuals who received large ‘retention’ bonuses are no longer at the firm” .Eliot Spitzer, the former New York Governor who was set-up in a sex scandal to prevent him investigating Wall Street’s financial gangsterism, pointed out on March 17 that the real scandal is the billions of taxpayer dollars paid to the counter-parties of AIG’s financial deals. These payments, Spitzer writes, are “a way to hide an enormous second round of cash to the same group that had received TARP money already.”Goldman Sachs, for example, had already received a taxpayer cash infusion of $25 billion and was sitting on more than $100 billion in cash when the Wall Street firm received another $13 billion via the AIG bailout.Moreover, in my opinion, most of the billions of dollars in AIG counter-party payments were unnecessary. They represent gravy paid to firms that had made risk-free bets, the non-payment of which constituted no threat to financial solvency.Spitzer identifies a conflict of interest that could possibly be criminal self-dealing. According to reports, the AIG bailout decision involved Bush Treasury Secretary Henry Paulson, formerly of Goldman Sachs, Goldman Sachs CEO Lloyd Blankfein, Fed Chairman Ben Bernanke, and Timothy Geithner, former New York Federal Reserve president and currently Secretary of the Treasury. No doubt the incestuous relationships are the reason the original bailout deal had no oversight or transparency.The Bush/Obama bailouts require serious investigation. Were these bailouts necessary, or were they a scam, like “weapons of mass destruction,” used to advance a private agenda behind a wall of fear? Recently I heard Harvard Law professor Elizabeth Warren, a member of a congressional bailout oversight panel, say on NPR that the US has far too many banks. Out of the financial crisis, she said, should come consolidation with the financial sector consisting of a few mega-banks. Was the whole point of the bailout to supply taxpayer money for a program of financial concentration?

Please remember, the Fed is absolutely backed in a corner here. Real rates in the 10-year part of the curve have exploded. They have no choice but to try and reduce real rates through QE or any other possible means. The US 10′s are going to 2% or less fairly quickly. Just look at a chart of the 10-year Gilts if you want to see the effects of QE…..However, most people missing the boat here. A flatter yield curve is not going to entice people to spend more like the Fed wants. Just the opposite, people will have to save even more to repair their badly damaged balance sheets. This huge collpase in bond yields is going to have a huge effect on the potential insolvency of the pension and insurance sector. How do they meet future obligations??? Simply put, they don’t. This will be the next bailout.

Good comments.We’e already one bailout past financial oblivion … at least for the US economy. This doesn’t mean we won’t see a rally somewhere in the global stock markets (at some time soon).I do think we’re reached a real point of policy division for the world’s central banks. At this stage the Chinese Bank must go its own way. Same goes for the Bank of Japan (BOJ). And I would strongly suspect that Trichet and the ECB will do the same thing. The chance of global coordinated action by these banks has been effectively reduced to zero. So this marks the start of a real currency struggle, or currency wars.PeteCA

So where is real CHANGE under Obama?!! Everybody knew that the Camelot atmosphere was going to wear thin … but this quickly??? I’m trying to give the man a chance. Just because someone is elected President doesn’t mean they’ve got all the answers. It takes time. But where’s the heart of the man? ‘Cause it’s sure not coming across in the economic policies right now.PeteCA

Yes there will be a currency war. This movement over the last few days in the dollar is nothing but a short term correction. More debt is going to be paid off or written off by the priavate sector than will be printed by the Fed or US Gov. It is total debt we need to be focusing on not jsut government debt. We could possibly see $20 Tln worth of US debt paid off or written off in next coupel years. No way can the Fed print this much money. Dollar will get much stronger before its ultimate demise.

If the Western banking system is broken and insolvent, can the dollar wind up stronger vs. the yuan (renminbi)? That’s a key question. Seems to me like the answer must be No. If the derivatives bubble collapses (Fed ultimately loses complete control over interest rates), won’t the winners be the people with real savings – who are least affected by financial leverage?PeteCA

You should watch “The Obama Deception” on yahoo videos. Once again the president is the puppet for the powers that be.

who says the Chinese banking system is not broken or insolvent????

If the money being printed went directly to individuals, who could then use it to pay of their debts to the banks it would help people. Giving the money straight to the banks without reducing the debt of individuals will only further the gap between rich and poor, and will inevitability find its way back into non-productive, speculative paper assets. Seeing these assets begin to increase in value will once again encourage those individuals who haven’t lost everything to once again invest income from actual productive work into these investments, to only be fleeced by the well connected insiders once again when that bubble inevitably pops. Wash, rinse, repeat.

Given the extent of uncertainty that now begins to unfold – I must admit that I am becoming a believer in the unfathomable New World Order that the Silver Surfer mentioned in the movie featuring the Fantastic Four,All That You Know Has Come To An EndFasten your seat belts folks.

m,not me! i’m jumping out the window.

When someone breaks into your house threatening your family and steals all your belongings do you behave in a civil manner? I’m tired of all this civility it’s time to get very offensive if you don’t get that then you are exactly as I described.

STOCKS GOING UP [NOT TODAY THOUGH], TIME FOR MORE HOME BUILDING NOW?I see the federal government put a trillion dollars into bad overpopulation debt Freddie/Fannie and propped gov’t bonds [by printing $300B out of thin air, because no one wants to buy our debt]. The stock market reacted [just like it did when the $767B bailout was announced last Fall], by spiking up some.Granny bar the door on inflation; the dollar value sank 2.5% today….pitty the stupid savers with their 1% money markets.Did any of the trillion go to like developing long-term jobs for America [like industrial base jobs that provide a domestic tax base]? Nope.It all went down the overpopulation toilet. Kiss it good-bye.Does the stock market increase mean anything? Nope, its just an adjustment to inflation as the dollar shrinks in value to pay for the bad overpopulation loans.Will companies be hiring again? LOL

The problem with the world economy, ‘free market capitalism’ (Hah!), the so-called ‘bail outs’ (Hah!), AIG bonuses, Wall Street chicanery and a host of other financial debacles is so utterly intrinsic to our human nature that a massive extinction event is probably the only thing that will cure it.(That light we see in the tunnel is not on oncoming train, it is Darwinian enlightenment.)The tragically false belief is that there is anything, in this mercilessly physical universe, even remotely akin to “profit” (used in the sense of gaining more from an investment than was put into it by all involved parties in the first place.) It’s a concept comparable to a ‘perpetual motion machine’, and if you think such a device is possible then I would would like to sell you shares in a company that says they hold the patent.Certainly there is successful theft (which can be made to look like profit, especially if you own a few newspapers and TV studios.)Just as certainly there can be delusion based on promises of ‘profit’ (just ask Mr. Ponzi.)There can even be hope of profit, as attested by widespread faith in the magical “Unseen Hand” of the marketplace.But, alas, there is no such thing as financial profit.I refer all engineers [and arm chair financiers] to the physical law known as Conservation of Energy, and its firstborn son, the First Law of Thermodynamics.To know that those principles are true in the realm of physics (and petroleum extraction) and nevertheless hold simultaneously to the belief that they do not apply to money… well, it’s just sad.Think of commerce as a cup, and all human activity as a quantity placed in the cup for later use. One can get from that cup exactly as much as was put into it, minus a some evaporation, a little spoilage and a few minor spills “Twixt cup and lip.”That’s it, and that’s all.The rest is flim flam designed to separate victims from what they have labored to put into their own cups. But a piece of advice to novice Capitalists: don’t call it flim flam and theft. That just alerts the marks and makes ‘em cautious. Call it Economics and Profit.(Hat-tip to D.Benton_Smith @ TOD, from whom I stole this…)

Ahhhh Darwinian Evolution or is it Devolution?

That light we see in the tunnel is not from an oncoming train, it is Darwinian enlightenment.

Yes, fellow travelers, familiarize yourself with the following case histories of those who elected to purify the gene pool.Darwin AwardsThe next person to win the Nobel Price in economics I personally will nominate for this award – in the name of all mankind.

Well hop on the commodity bubble folks….and prepare for the eventual treasury bubble burst that will bring down the entire fiat edifice.Banana Republic or bust….>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>Commodities surge after Fed bond planBy Javier Blas in LondonPublished: March 19 2009 19:14 | Last updated: March 19 2009 19:14Commodities prices surged on Thursday as investors sought protection against the risk of higher inflation by buying everything from oil and gold tocopper and sugar.Plans by the Federal Reserve to buy $300bn of US government debt triggered the stampede into commodities markets, which had suffered sharp price falls on worries that the world was heading for a depression. For the first time in almost a year, traders looked to oil and other raw materials as a hedge against an unexpected jump in prices.The benchmark S&P GSCI index, a basket of raw materials, rose 6 per cent as oil prices soared to $51 a barrel, up 7 per cent on the day, to theirhighest level since December. Copper reached a four-month high.The switch into commodities was triggered by concern that the US central bank might find it difficult to manage down the country’s money supply whenits economy turned. That could lead to sharply rising prices for many goods and services.Hussein Allidina, head of commodities research at Morgan Stanley in New York, said: “Investors are buying commodities as protection againstinflation and as a hedge against a weaker US dollar.”Nick Kalivas, an analyst at MF Global in New York, said that the aggressive move by the Fed was “stoking inflation expectations” and that there was abelief that a lot of money could flow into commodities.The price rises gained extra momentum from a weakening dollar. The US currency extended its fall against the euro to 4.5 per cent over the past two days, hitting a low of $1.37 per euro.Gold rose to $960 a troy ounce, up 8 per cent since the Fed’s announcement on Wednesday.Michael Lewis, commodity strategist at Deutsche Bank, said that commodities’markets had started to move away from the depression scenario that they werepricing in a few weeks ago. “The hope is that as radical central bank action spreads around the world, demand destruction fears will start to diminish,”he said.The International Monetary Fund forecast the world economy would contract 0.5-1 per cent this year, the first global fall in output in 60 years.”Commodity prices are unlikely to recover while global activity is slowing,” it said in a report ahead of the G20 summit of developed and developing nations next month in London.US shares slipped as investors questioned how effective the Fed’s move would be in averting a prolonged recession. In New York, the benchmark S&P 500index was 1.2 per cent lower by mid-afternoon.

The Real AIG ScandalIt’s not the bonuses. It’s that AIG’s counterparties are gettingpaid back in full.By Eliot SpitzerPosted Tuesday, March 17, 2009, at 10:41 AMEverybody is rushing to condemn AIG’s bonuses, but this simplescandal is obscuring the real disgrace at the insurance giant: Whyare AIG’s counterparties getting paid back in full, to the tune oftens of billions of taxpayer dollars?For the answer to this question, we need to go back to the veryfirst decision to bail out AIG, made, we are told, by then-TreasurySecretary Henry Paulson, then-New York Fed official TimothyGeithner, Goldman Sachs CEO Lloyd Blankfein, and Fed Chairman BenBernanke last fall. Post-Lehman’s collapse, they feared a systemicfailure could be triggered by AIG’s inability to pay thecounterparties to all the sophisticated instruments AIG had sold.And who were AIG’s trading partners? No shock here: Goldman, Bankof America, Merrill Lynch, UBS, JPMorgan Chase, Morgan Stanley,Deutsche Bank, Barclays, and on it goes. So now we know for surewhat we already surmised: The AIG bailout has been a way to hide anenormous second round of cash to the same group that had receivedTARP money already.It all appears, once again, to be the same insiders protectingthemselves against sharing the pain and risk of their own badadventure. The payments to AIG’s counterparties are justified withan appeal to the sanctity of contract. If AIG’s contracts turnedout to be shaky, the theory goes, then the whole edifice of thefinancial system would collapse.But wait a moment, aren’t we in the midst of reopening contractsall over the place to share the burden of this crisis? From raisingtaxes—incometaxes to sales taxes—to properly reopening labor contracts, we areall being asked to pitch in and carry our share of the burden.Workers around the country are being asked to take pay cuts andaccept shorter work weeks so that colleagues won’t be laid off. Whycan’t Wall Street royalty shoulder some of the burden? Why didGoldman have to get back 100 cents on the dollar? Didn’t we alreadygive Goldman a $25 billion capital infusion, and aren’t theysitting on more than $100 billion in cash? Haven’t we been toldrecently that they are beginning to come back to fiscal stability?If that is so, couldn’t they have accepted a discount, and couldn’tthey have agreed to certain conditions before the AIG dollars—thatis, our dollars—flowed?The appearance that this was all an inside job is overwhelming. AIGwas nothing more than a conduit for huge capital flows to the sameold suspects, with no reason or explanation.So here are several questions that should be answered, in public,under oath, to clear the air:What was the precise conversation among Bernanke, Geithner,Paulson, and Blankfein that preceded the initial $80 billion grant?Was it already known who the counterparties were and what theexposure was for each of the counterparties?What did Goldman, and all the other counterparties, know aboutAIG’s financial condition at the time they executed the swaps orother contracts? Had they done adequate due diligence to seewhether they were buying real protection? And why shouldn’t theybear a percentage of the risk of failure of their own counterparty?What is the deeper relationship between Goldman and AIG? Didn’tthey almost merge a few years ago but did not because Goldmancouldn’t get its arms around the black box that is AIG? If that istrue, why should Goldman get bailed out? After all, they shouldhave known as well as anybody that a big part of AIG’s businessmodel was not to pay on insurance it had issued.Why weren’t the counterparties immediately and fully disclosedFailure to answer these questions will feed the populist rage thatis metastasizing very quickly. And it will raise basic questionsabout the competence of those who are supposedly guiding thiseconomic policy.Eliot Spitzer is the former governor of the state of New York.Article URL: http://www.slate.com/id/2213942/

g,ok. this is the stuff i love. but..at first, i was thinking goldilocks let down her hair,but that wasn’t her. repunzle.then i realized there were 3 bears to deal with, not just one.and then i remembered that after she ate and found thenice bed she fell asleep. but i don’t think the storyindicates how long she slept. but…i still can’t remember if she is eaten by the bears or ifshe gets away with violating their privacy and stealingtheir lunch?

They don’t have to sell existing treasuries. They just have to stop buying new ones, the looming demand to fund US government spending is just huge. This demand cannot be met by attracting off shore investors, because the rate by which they are accumulating their surpluses is much reduced.That is not to say they won’t buy any – they just can’t buy at the volume the US requires to fund it’s spending deficit.Therefore the US must print money to cover the difference. Don’t get sidetracked by misunderstanding how they create the money – which won’t be by using a printing press literally.What happens to the US dollar at that point depends on how much money everyone else in the world is also “printing” – because everyone will be forced to print.If any one doesn’t print, their currency will rise to a rate as to completely destroy their export industries.Currency management is the new way to protect your economy.

m,please forgive me if this post is “unresponsive” or in some waydeserving of an aforementioned award. so here it goes..( someone once told me it is easier to ask for forgiveness thanpermission. ).Ducksbreath … google this for the source…Dear Dr. Science,Why is it so funny when milk accidentally shoots out your nose?from Tony G…of ” Beaverton, OR”.”It isn’t funny, it’s tragic. It’s a waste of good milk and a violation of the integrity of your nasal mucosa. I once fired a lab assistant you spewed milk at me that way. He claimed it was an involuntary reaction to a knock knock joke, but I knew better. He was actually making an anti-intellectual statement, dismissing and demeaning everything Science stood for. I took it as a slap in the face, albeit a wet one. There’s nothing accidental about nasal dairy projection. “

The United States Of Ponzihttp://www.forbes.com/2009/03/18/american-economy-housing-bubble-madoff-opinions-columnists-ponzi.htmlAt the moment, the last one in the Ponzi row of investors is the Fed.Next one will be the American worker and taxpayer, although he never asked for this position. Others, managing his savings, his country, his institutions, managed him into this position. Too bad. Such are the results of short-sighted greedy take-what-you-can societies. Don’t ask the Iraqi’s for help. Don’t ask the jailed black youth for help. You didn’t care. They won’t.

Hold on.The banking system is insolvent/bankrupt. The goal is to prop it up at any cost to stop the collapse of the wider economy; because our economies rely on the role of banks to broker payment between all parties. There is no functional backup to this system.The second goal is to kick off inflation to get the economy “growing”; at least in nominal terms. There is hope this can be done in a controlled manner, but we’ll take uncontrolled if we have to. Forward momentum creates options going forward that otherwise do not exist.Realistically, the problem of bank lending hasn’t made it to the table to be dealt with yet.Within that context the Fed’s actions can be painted as a steady hand at the wheel.

Though I don’t believe in violence there are times for war, though I don’t believe in vulgarity there can be times for that as well. A thief has broken in our home(bond holders/creditors) and hopefully in some small way my vulgarity heightens your level of awareness. Hopefully that sickening feeling in your stomach from my vulgarity resonates in your subconscious enough that you don’t go to sleep or are tempted to believe the emperor is wearing clothes. There is a time an place for everything and right now anger is very appropriate. My vulgarity in context was for loving purposes aka fairness. It’s time to swear, holler and attack in every way you can think of until the thief becomes frightened and leaves our home. There’s never been a better time for hysteria!

New Thread.

we just steping from credit crisis to currency crisis global scale. do you think purchase of MBS and agency will matter a squat? in currency crisis, what does it mean for USD? what do you think can mean to USD? certainly not positive. next question should we gonna step from currency crisis into what?

I know exactly what you are saying.But if people weren’t repulsed enough with slaughtering others, Iraqis and Afghans (and abetting the slaughter of Palestinians), then can we really expect them to be upset enough here?As a burned out anti-war campaigner (and vet) I’m long past disgusted.Yes civility just means bending over for the elites (the ones commanding the real vulgarity).Mark

As I recall your original time frame was 3-6 months on the gold call.The dark clouds do part more frequently, but the sense of purpose has not returned. Head Stone is finally completed with pictures and messages. The anger I have with myself has not gone away and I’m sure never will. I do talk about it sometimes with his friends during our lunch outings, but not with my family to much as the pain is still somewhat debilitating. One of his friends I had been helping with college fees recently committed suicide, her mother told me her daughter suffered from depression and spiraled down after my loss. The church people are doing well. I do have a tenant we are trying to find a place for as she lost her job and can’t pay rent. Fortunately I can afford to not kick her onto the street.On a lighter note, unfortunately I did not go with my intuition regarding AIG and Citi over the last week after the statements of no nationalizing, and the big confidence boosters including Bernanke on 60 minutes. Now I’m even more scared of getting in and continue to just play it safe. If safe is still cash??Hlowe