Why you’re making an amazing contribution, please reconsider you’re very valued and influential.

Why the insistence of “Trickle down economics”. All of the bailouts or 90% of the spending has been given to the creditors who are then supposed to open their coffers and “loan” the money out to people and get the economy started-what’s wrong with that picture?Why can’t they save the economy and system from the bottom up through debt forgiveness or new job creation? Trickle down economics is a failed theory yet they continue forcing it on us like a square peg in a round hole. I’m convinced the FED is a devious way to spend tax payers money freely and is a “trickle down economic scam”.

Come on, wise up. Trickle down was bogus from the start. The rich don’t get and stay rich by letting money get throught their fingers. It was always a handout to the rich and powerful. If they wanted to get money to the people, they would raise the minimum wage and provide childcare and health insurance.Corporations pay out money in wages, taxes, and executive compensation (also dividends and buybacks). During the last 20 years, wages and taxes have gone down. What happened then to executive compensation?

Re-post from the end of the last thread. I think it fits here better than there.subgenius wrote: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…)

Where is “Mr. UNO,” or “Me First?” Looks like, has gone to bed too early tonight.

I really hope you don’t go. You have a lot to say and you are appreciated here by many.

And when taxes went down, it was the companies who pocketed that money by stagnating wages. It wasn’t a case of the people getting to keep “more of their money”, as was told to them, it was a case of businesses saying “that’s mine, thank you very much!”

friggin’ FIRST.thanks for the heads up!

TAKE YOUR MONEYPrimary modus operandi of our govt and wall street is the same: devise ever more sinister and clandestine ways to take our money: have you ever noticed that when you think a stock or commodity is going to go up, it usually goes down and when you think it will go down it goes up? When you are wrong more times than you are right, they take your money. So when you are enticed to use credit cards, take out variable interest loans, buy a house(s) with less than 20% down, etc, they eventually take your money. When the govt is now encouraging you to spend when you should be saving, guess what they are trying to do? And when the big and powerful get into trouble after years of record profits, our govt says, we have no choice but to bail them out: again, they take our money. So the first step towards freeing oneself from a system which is perfectly designed to take your money is to do the exact opposite of what most people are doing and what you are being tempted to do.

I am going to give a forecast of what is going to happen over the next 18-24 months on the state of the global economy after the actions of the Fed 2 days ago.What the Fed did was essentially a declaration of economic war against its creditors. The following will happen in the coming months:1) countries unwilling to break from the US$ will print money to maintain their exchange rates, thereby creating hyperinflation for themselves2) Countries that will break with the US will dump their dollars and raise their protectionist gates3) The monetisation of debt will continue at an accelerated pace as less buyers of agencies and treasuries would mean the Fed has to back stop all issuance.4) at some point, the US will use its military card.I expect some sort of reaction from China over the next 2 weeks before G20. I expect to see Japanese pension funds start to panic. I expect the Middle East to accelerate the ME single currency with a basket peg. There will be implications for how oil is traded. The budget deficit of the US will be much bigger than budgeted as tax revenues collapse, increasing issuance of more treasuries, with no buyers. There will be a vicious cycle of monetisation as the Fed tries to cap interest rates in the face of collapsing FX and reversal of investment flows into the US. I will not be surprised to see the Fed balance sheet to be 45% of the GDP before the year is out.The initial phase of deflation will be pushed into inflation in the next 6 months and hyperinflation by end 2010 as continued monetisation of debt causes loss of faith in the US$. Before 2009 is out, the world will NOT be using the US$ as a transactional currency which also means that it will no longer be the world reserve currency. This will be led by global trade partneres (not the US) deciding among themselves to settle in other currencies. At some point, the US will be forced to sell US$ to get foreign currencies to pay for its imports.WTO is dead. We have just entered the age of Protectionism.The global economy will be entering a multiyear depression which will probably end in a war, which will start somewhere in the Middle East as the US seeks to find resource reserves to support its currency.March 18, 2009 will be marked as the day the world took the path to WW3.If I sound depressed, that is because I am. It is sad to see the world go down this path and we all just have to prepare for it.

everyday, Obama is delivering new BAILOUT to this and that institutions in the name not TBTF but will not let anyone to fail. Obama and his administration is out of their mind.

FLASH UPDATE – March 18, 2009 – JOHN WILLIAMS’ SHADOW GOVERNMENT STATISTICS – FLASH UPDATE – March 18, 2009 – Annual CPI-U Inches Higher to 0.24% (SGS 7.7%) – Housing Starts Annual Plunge at Historic ExtremeEveryone is talking deflation as an established fact, yet not even the gimmicked BLS numbers can get down to 0% for the second straight month. Meanwhile, using the BLS’ own 1980s non-gimmicked measures, inflation is running a whopping 7.7%!This also demonstrates just how gimmicked the CPI-U really is: the CPI-U understates real inflation by a minimum of 7.5%.Cannot trust Wall Street Bankers, investors like Madoff, that slimy smelly stuff that one steps into and sticks to the bottom of your shoe (Jim Cramer), the rating agencies owned by the big banks, the Goldman Sachs revolving door at the Fed and Treasury, the claimed $1.2 trillion debt monetization, and now the same BLS bullsh*t from the democrats as the republicans. It’s obvious someone higher up the food chain is running the government. The buck may stop with Obama, but the Federal Reserve Note goes higher up.We are caught in a true nightmare where the bad guys are chasing you, but you are running in place. To see more clearly what I mean, look at these three videos in sequence:FDR Ends Gold Standard in 1933 This happened 76 years ago, yet it’s the same justification we are hearing today! We must stabilize our economy with inflation.1933 pro-inflation propaganda movie theatre trailer Obama has yet to pull this rabbit out of the hat, but I guarantee he will use these same bizarre talking points before the end of 2009.Nixon Ends Bretton Woods International Monetary System Nixon blames the USA’s excessive debt on the red herring international foreign exchange traders and sends the country into accelerated inflation!The latest version of NDR’s gross debt-to-GDP ratio See that little “plateau” at the peak in 1933? Well, that’s where we are today except the ratio has jumped from 260 to 360.dshort’s four-bears chart Even though this chart is more of a “economic depth-finder” than anything else it sums up the whole nightmare. (It’s also updated daily.)

http://www.counterpunch.org/hudson03182009.html.Bait and SwitchThe Real AIG ConspiracyBy MICHAEL HUDSON……” ..And popular opposition has been rising to how Obama and McCain could have banded together to support the bailout that, in retrospect, amounts to trillions and trillions of dollars thrown down the drain. Not really down the drain at all, of course – but given to financial speculators on the winning “smart” side of AIG’s bad financial gambles.”

Inflation the hidden tax is going to take all your money, enjoy today.

Yes sir, tax revenues will be poor this year for sure. Barter is growing and so goes the State and Local sales tax. Let’s see, I think it’s a day’s wage for a loaf of bread, that would be hyperinflation, and the war would be Armageddon, its sounds right. Hang in their brother, dodge the draft that’s coming and grow you a garden and let the robots fight it out. Worry also has a high interest penalty; don’t take on any worry loans.

Obama and his democratic dogs are drunken Bailo’Rama

I think your internet name “Mother of God” is sacrilegious. Good riddance !

All this shows that it’s the American Democracy that is seriously ill, the economy is just a consequence.It’s democracy at its core which is attacked and undermined as a consequence of the spurious Wall Street-Washington relationship.For those a bit far-sighted it’s not difficult to see a rapid decline of american geopolitical leadership as long as the foundations of the American Society and its core social contract are not seriously reassessed and strengthened.”We The People…”, remember? these days the People are clueless, cheated in every way, lost… reduced to mere consumers… what are we, Citizens or just Consumers?

Paul Krugman: The Alice-in-Wonderland Economic Landscape

Not so sure “you the people” are the victims – I suspect you are reaping the fruit of what you chose to sow.You lacked courage and embraced fear instead, giving up your freedoms to a leader who became hated by millions in the world because of the torture, theft and killing done in his name (and yours).You made jokes about how foreigners would never be able to get the money they loaned you back, because you had the reverse currency and could print them to death.You consumed the world’s resources as if it was your right; whilst in an age of an excess (of every physical thing) people in the world starved.You weren’t reduced to consumers, you chose it.

Is it true that a social net was developed in England only after WW2? As if, after contemplating the destruction, they understood that we have to take care of each other and everyone has to contribute to help the ones in need?Also does a society gets greedier and more selfish the richer it gets? Then is the only way to get universal health care, a pension, good paying jobs is to go through the worst of nightmares? Then be it. The ones that survive, and hopefully our kids, will live in a better world. FED up already of this one….

Wolf,Your wish is my command..http://en.rian.ru/russia/20090318/120627306.htmlRussia wants to start debate on new reserve currency at G20

So the question remains: is there enough left of the original American Citizen in us?Or are we doomed to soon go the way of past powers?

Obama told a town hall meeting in CA today we need to get our deficit spending under control. This, the day after BB printed another trillion to buy treasuries and MBS. I guess someone didn’t get the memo.

Not true.Velocity of money leads to inflation.Velocity of money is not necessary for hyperinflation.Hyperinflation occurs when holders of a currency realize that the currency is loosing value, and they try to SELL IT into other currencies/commodities.It is the act of selling currency into a marketplace where there is a lack of adequate buy interest that induces panic, and thus dumping, and thus hyperinflation.There are also unique characteristics about the USD that will lead to a totally unique brand of hyperinflation for which no models currently exist. In sum, the USD has the historically unique status as world reserve currency. This status confers a value-add to the USD, and loss of this status will compound the loss of value of the USD in a hyperinflation scenario. (I have previously estimated that the USD has a value that is roughly 3x it’s true value, simply as a result of holding the reserve currency status, but of course, the actual number is unknowable, since it there is no historical analogue, and we can really only measure the USD against itself).So, the important takeaway is that one must recognize that inflation has a classic and a layman definition, and for standard inflation, velocity of money is a factor. Hyperinflation is a totally different thing. Just because it has the word “inflation” in it, do not mistake it for simply “big inflation.” Hyperinflation is a unique phenomenon, and it does not depend in the least on actual spending of money – it is wholly dependent on the SALE OF MONEY into other currencies and commodities.–Brian

Brian,When I used the term “Velocity of Money”, I was not referring the money creation process (ie fractional banking money creation). I was referring to the number of times money changes hands within a year (ie what you said). So we are on the same page.

the linkhttp://en.wikipedia.org/wiki/Velocity_of_money

Brian, you totally get it. How can the guy with the gun experience hyperinflation? The guy with the gold will experience hyperinflation if the guy with the gun takes the gold from the guy with the gold. So between the guy with the gun and the guy with the gold, the guy with the gold is susceptible to hyperinflation. Gun is the new gold.Not convinced? Check out the 90% tax on bonus on the bailed out firms. Politics drives economics. They can do it and they will do it. Just like that! You don’t argue with the guy with the gun. He might shoot first and ask questions later. Somewhat like …… Print First Ask Questions Later.

People can say what they want about the French, but one thing is certain: the French don’t fear their government like we do.The French would burn their government to the ground if it pulled stunts like ours does.

Do you have the will to rise against the government at this point?Too many still have jobs and are in love with their ‘stuff’.Like it or not, we are all going to be liberals soon. It will be our duty as good liberals to replace a rotten system with a new system that will decay over time.Obama had the platform and the support to affect real change, but even he has succumbed to the plutocratic forces.May we live in interesting times.

Brian,Actually, in the case of hyperinflation, velocity of money is the main reason. In Weimar Germany, individuals were spending their earnings immediately after receiving it on anything and everything that has some barter value. And whoever was paid went out to spend it as quickly as possible as well. There was widespread unwillingness to hold currency as the value was debased on a daily even hourly basis. As a result, because of the fear of debasement and the lack of trust in monetary authorities, velocity of money shot through the roof. In the modern equivalent, the same can happen. It may start with large holders of the USD to sell first but eventually, it will be the citizens of the US of A that will flee out of their own currency into barter-able goods and other currencies (if there are any that are not monetising) causing hyperinflation.What happened on March 18, 2009 was similar to what happened in Weimar Germany on August 1921 when they first printed money to pay war reparations. As more foreign investors flee the dollar, the greater the need for monetisation to hold rates and to fund deficits. There will be a vicious monetisation and debasement cycle that will shred any confidence in the dollar. Bernanke just took the Gono/Havenstein route.

How about Antarctica? They might accept volunteers on some expedition. Great if you love skiing and snow.Besides there are not so many of those HUMANS that cause most of the problems on this planet:-) Only yourself of course and a few researchers.

bet its not your last post

I think you meant to say ‘reserve currency’, but there’s a certain charm to the concept of a ‘reverse currency’.

Anyone who gets an opportunity should throw a shoe at Bernake or Turbo. Someone reading this blog might get close enough for a good throw.

I, myself, am a big fan of bulldozers.

Good Ridence

I agree with CLake! “The institutional machine” he describes is an extension of the hypercorrupt finance-led de facto shadow world government. The power of fractional reserve banking when compounded with asubsidiary military machine that is pervasive andcontrols the energy corridors can create whateverworld crisis it needs to manipulate world events.Debating who is at fault between Wall Street and theFederal Government is insulting. Wall Street financiers and the world finance elite run the worldand the government is lobbyist controlled windowdressing. We have Potemkin Democracy! All democraciesare beholden to the power of elite contributors andtheir army of lobbyists. The kabuki dance of electionshides the fact that creating multiples of money andgetting paid interest for a virtual asset is the mostpowerful technology ever invented. Those who controlthat technology, control everyone else in the world.The events of the last couple of months are empiricalevidence of this assertion. If we get involved in assinine debates like this, we just spin our wheels.The intellectuals of our day have forfeited their rolein history. They are the whores for the finance elite.There is an agenda, and it involves a very diabolicaland ingenious multilayered control of the population without the need for force. The elite of the elite areformulating an end game, and it is pathological accumulation of assets. The pathology is so severe,that they are willing to crash the world economy andcull the herd to get to accumulate it all.

Unfortunately, you might be right.

http://news.yahoo.com/s/ap/20090320/ap_on_go_pr_wh/obama_iranmy god, is Obama out of his mind?

yep, it shocked me how fast they can pass new law to tax people. they can certainly lower that $250k to $100k or to $50k next week. then that will mean higher tax for 99% of American. Scary stuff. Obama and his democratic gang is abusing their power now.

Brian is very correct. What’s important to understand is that this is not at all a linear phenomena : one does not get from deflation to low inflation then higher inflation and then hyperinflation, but directly from deflation to hyperinflation :there is a treshold beyond which monetary easing, not having succeeded to get us out of a deflationary environment as operators have until then preferred to hold cash or cash equvallents suddenly panic and decide en masse that they’d rather hold tangible assets (typicall gold, oil, other commodities, farm land are generally the first to start the bidding) than cash. That’s when we go directly to hyperinflation, over a VERY short period of time. There are no signs beforehand, because if there were, those first signs would be sufficient to start the ball rolling.Noone knows where that treshold lies. Bernanke doesn’t know, there is no model that describes the phenomena. That’s precisely the lesson Germany learned during the Weimar republic, a dangerous game of manouevering in uncharterred territory. It wasn’t crossed in Japan, it hasn’t been crossed (yet) in the USA or in Britain, but who knows how far we are from it ? Because it is essentially a psychological phenomena (the moment when individual’s fear of holdng cash becomes superior to that of holding tangible assets as a snowball effect), a black swan, something we can’t forecast, we should do everything to avoid testing it’s limits, and not the other way round.But it seems Mr Bernanke has no fear !

Interesting. I was only looking at it as a dilution. If there is really a loss of faith in the greenback, then the gig is up. That would have to be a domestic loss of faith.I think its status buys it a little room.We may actually see inflows of cash because of a carry unwind. Our trade deficit is shrinking, so foreign held reserves can shrink.Actually, Saudi Arabia may see that cash as it gets traded for something useful.I’m not sure that printing new money is as dangerous as what is starting to back existing money. Have you seen the composition of the FED balance sheet lately? It wasn’t through open market operations that it ballooned, it was from all the special facilities and the result is our money is backed by Maiden Lane.The FED has to be concerned if some of that paper starts defaulting. There is no recourse on that paper; it’s not like taxes can be raised to make up the shortfall because that was a FED operation outside the government.

“we will extend a hand if you are willing to unclench your fist.”And how about lashing claws around the region?

On the stock markets, investment bank analysts and stock holders are the ultimate responsible. The same applies to some so-called prestigious strategic consultant firms, when criticizing the stock pricing lag of companies who did not engaged in the follies of the bubble, or those with a more conservative risk-taking and not permeable to the collective euphoric craziness. The good sense was bitterly punished and those with the feet on the ground were always under a takeover threat and lost unsatisfied clients, who moved to stock price growth institutions and companies, because everyone with no exception were betting on those. CEO’s could not be blamed, they were simply pushed by the market to do what their peers were careless doing. Just look to what happened once Citi, a bankrupt institution issued a kind note on themselves. Many others wsere compelled and immediately did the same. Investment and brokerage houses inflated the value of those statements with stock prices increases in an attempt to create an optimistic wave and attract money from investors. They all live by (badly) advising, selling and buying on behalf of investors.

In the end though it’s a necessary adjustment we have sacrificed real demand by exploiting cheap foreign labor for a long time and the imbalance was a disaster waiting to happen. Ultimately we’ll be better off it just sucks if you happen to be middle aged like me. It’s not as if the U.S. lacks resources, it’s just always been cheaper to get them else where, well that certainly won’t be the case any more but real jobs can be created now. Once the equilibrium has been established and globalization put to death we can start rebuilding in a more sensible self-sustaining way, but yes you’re right the party’s over. War is not inevitable but this adjustment increases the chances. It’s last call and the bartender is serious but he’s doing us all a favor.

agree; centralization of power is akin to absolute power and we know the end of that saying. As our govt has grown ever larger, it has become more inefficient, corrupt, inept and unrepresentative of the people’s interests; in short, it has become the primary tool of the elite corporations; there needs to be a decentralization, full transparency, full regulation and full accountability if they expect Americans to continue to live and work in this country, pay taxes and die in it’s wars!

Excellent article.UM economist V.V. Chari: Government bailout policy is “cross your fingers and hope”There are a bunch of people who are talking about nationalization in the sense of taking over, wiping out the equity holders and wiping out the debt holders. To the extent that they’re talking about wiping out part or all of the debt claims that uninsured debtors hold against the financial institutions, I would say economic theory says that that’s a really good idea. To the extent they continue to protect the existing debt holders–if you nationalize just in terms of wiping out the equity holders–that does not solve the medium-term and long-term problem. In fact, it’s going to exacerbate it, because as we have seen with AIG and Bear Stearns and a variety of other institutions, the U.S. government is singularly ill-equipped to run major financial institutions.So any proposal for nationalization–even the most ardent advocates–propose a relatively speedy return to private hands. If you’re going to return it to private hands without wiping out the debt holders, you haven’t solved the fundamental problem. Nationalization is fine if it means wiping out the equity holders. It’s not fine if it means leaving the debt holders completely unaffected. That’s the way I’d describe it.I think these code words and buzzwords miss the fundamental underlying reality: Somebody has to take the hit because the market value of the assets is less than the market value of the liabilities. Any mechanism that does not impose some of that hit on existing debt holders is a mechanism that’s setting us up for problems in the future.Mark

I agree with you on that , all that bail out money thats been thrown to system covering the place for lost credit for now.Programmes are mostly about housing, and consumer spending. Basically to create an inflationary situation all the losts from that deleveraging and stock market collapse in the entire world has to be regained.The difference is that once those losses regained Dow Jones wont stop at 14000 this time it will go a lot further cause of the money that FED creating from thin air right now.Yes there is a monetary inflation now but also there is a consumption decrease so most probably deflation forces will stop the inflationary forces for some more time. Until when ? Until FED throws many many other programmes and also many other stimulus packages from the governement.Scary thing is that we can possibly have inflation with stagnation as wellwhich will make life more diffucult on people who lost their jobs.Nothing will happen tomorrow immediately , i think everybody has to take steps according to that and slowly save up in assets that will hold value……

Wolf – you should chill out….there is no currency on this planet that isn’t fiat…everyone has the incentive to print money….so there’s unfortunately nowhere to hide….so you say buy gold? why? the only reason gold mattered in the past was that it backed currency — but now it doesn’t…so why should gold matter in the future? Settle down and stay put. The US will still be the best of the worst.

James K. Galbraith has written an excellent article in the March/April 2009 edition of Washington Monthly entitled, “No Return to Normal: Why the economic crisis, and its solution, are bigger than you think.” Here is the link:http://www.washingtonmonthly.com/features/2009/0903.galbraith.htmlIn a lengthy article packed with careful analysis and specific solutions, Mr. Galbraith makes a compelling case that the financial/credit crisis can only be solved from the bottom up and not the top down. It is one of the first comprehensive articles I have read which gives me a glimmer of hope that this financial crisis can be tackled but it will take extraordinary creativity and time, lots of it. I urge everyone to read the entire article, but below are a few noteworthy quotes from Mr. Galbraith’s article:”A brief reflection on this history and present circumstances drives a plain conclusion: the full restoration of private credit will take a long time. It will follow, not precede, the restoration of sound private household finances. There is no way the project of resurrecting the economy by stuffing the banks with cash will work. Effective policy can only work the other way around.”After laying out detailed steps to begin resurrecting private household finances, Mr. Galbraith summarized: “[T]he work does resemble wartime mobilization in important financial respects. Weatherization, conservation, mass transit, renewable power, and the smart grid are public investments. . . . What is required are careful, sustained planning, consistent policy, and the recognition now that there are no quick fixes, no easy return to ‘normal,’ no going back to a world run by bankers — and no alternative to taking the long view.”Mr. Galbraith closes his article as follows: “Does the Geithner team, forged and trained in normal times, have the range and flexbility required? If not, everything finally will depend, as it did with Roosevelt, on the imagination and character of President Obama.”

With the participation of the distinguished and well-known speakers, it is without doubt an excellent debate. Apportion of blame between Washington and Wall Street is obviously pointless. Policy-makers and lawmakers in Washington are enablers of the ponzi schemes of securitization devised by Wall Street through modification and creation of new rules and regulations, and legislations. As long as the schemes work both parties are happy because they receive huge profits in term of bonuses and campaign contributions, etc.Now that the schemes have collapsed, Washington and Wall Street have resorted to looting the tax-payers through systemic bailouts that are opaque. Such policy actions are always cheered by main street media to subdue public opinions. One obvious example is the bailout of AIG, which to date has cost tax-payers $170 bn. More is yet to come. Last week, two important announcements pertaining to AIG were reported. First announcement was the list of CDS counter-parties (Goldman Sachs, BOA, Citigroup, etc.) that received about $100 bn of AIG’s payout in full without any hair cut. Let’s not forget that when AIG and its counterparties entered into an insurance contract there was no implicit government or taxpayers guarantee. Second announcement was the obscene bonus given to AIG Executives, particularly to those in the division that brought the firm down. Between these two issues, policymakers, lawmakers and mainstream media have exhibited extreme outrage (that is rightly so) at AIG bonuses instead of AIG’s 100% payout to its counterparties. My perception is that there is a strong intention to divert Americans attention away from the bigger issue where more taxpayers’ monies could have been saved. American public should be more outrage as to the rationale of full payout to AIG counterparties, which should have been devised with the knowledge of policymakers, particularly, the FED, past and present Treasury Secretary. Is such action not tantamount to looting the American taxpayers? If so, how can we prevent such daylight looting from continuing?

When Adam delvedAnd Eve span,Who then was the gentleman?–I forgot who (Ezra Pound, perhaps?)

There has been some really good debate on this thread today about deflation, inflation, hyperinflation, and velocity of money. I really appreciate all the inputs on these subjects – thanks for the discussion folks.Wolf in the Wild: As I said above, if you need specific info on NZ, let me know an e-mail. I can help.What’s noticeable today is that the market is dithering. Already it does not look like there’s much steam left in this rally. I firmly beleive its a bear market rally. But the point is this – after a monumental announcement by the Fed (with a $1.6 trillion injection), we’re already talking about the rally being possibly stalled. There’s now already pressure on the LONG’s and CALL’s about whether they want to hold, or sell and take a profit. So the tremendous underlying weakness in the US market is again manifesting itself.Meanwhile, Obama is telling folks he needs to trim the budget. But let’s get real. He needs to make mammoth cuts in major spending programs to even make a dent in the spiraling deficits at this stage. Will Washington DC actually cut the defense budget by 50%? Politically, it’s hard to imagine that such an option would fly. But it’s what’s required if they’re serious about stopping runaway deficits.PeteCA

Hello all,For those of you who were interested in my EVAPORFLATION piece, and stopped in, I have replied to all.If you haven’t seen it or would like to, it is at:http://www.rgemonitor.com/globalmacro-monitor/256056#159536I will keep checking in and commenting as I go.Nouriel, If you haven’t had the chance to read it, I’d love it if you dropped by. I really believe this is more reality then theory, and our cure from our current ills requires proper diagnosis.All the best,Miss America

Joe Russo has some interesting charts for US major stocks at the following link. While I don’t agree with the technical analysis on every single chart, I do think that Mr. Russo manages to get his main point across.There are a lot of major US companies that are either on the road to ruin right now, or literally sitting at the dividing line. Here’s the link:http://www.financialsense.com/fsu/editorials/russo/2009/0319.htmlI thought this article was interesting – because it squares with some comments I made on this blog a week (or so) ago. It sure looks like the USA is on the verge of seeing the industrial base get decimated.While Bernanke, Geithner and Obama have been spending countless trillions to rescue banks – the fact is that America needs a new industrial revolution. And we need it now! That’s where all the stimulus money should have gone. But instead, the dying banking sector has literally sucked the lifeblood out of this nation. Not only today’s lifeblood mind you, but very likely the lifeblood of the whole next generation of Americans as well.PeteCA

If there’s one positive that can come out of this mess, it’s that, in the future, bright kids coming out of college might go into something productive as opposed to going to Wall St.

Well said, but perhaps I would use defensive due to fragility in plae of arrogant.hlowe

That is not technically the case. Its a chicken and egg thing. If the value of the USD declines precipitiously as foreign holders of the currency sell for fear of monetisation, the immediate impact will be higher prices. With higher prices, there will be incentive for higher wages. But even then, that is not necessary the case. Domestic holders might flee the dollar in favour of hard assets (gold, farmland etc) to preserve value of their wealth. That too will lead to higher assets prices and in turn may spur higher wages. In Weimar, the initial economic results looked like a massive turnaround before it all broke down in hyperinflation. During the first 12 months, income rose as prices rose, and investment increased. It was all nominal though. The cost was a far weaker Mark but in the short term it looked like a good idea to spur growth. The problem was that there was no way to stop the monetisation of debt and wages without causing massive overcapacity and unemployment. So they kept of printing to pay off their debt. Eventually, the Mark was debased to such as extent (in terms of other currencies as well as gold and other hard assets) that faith was completely lost. Look at Zimbabwe. The same is happening there today. They are printing to pay wages. And the workers will buy whatever that is tradeable as soon as the cash is at hand. As long as there is fear that money is not scarce, hyperinflation will occur.The wage/price spiral is about overproduction and oversupply of money. It is monetary phenomenon but it leads to HIGH inflation not HYPERinflation. Denninger is confusing the two. Hyperinflation is a debasement and psychological phenomenon.

Yes, currencies are all fiat but not all currencies are monetising. That is main issue. Individual countries will have to decide what they want: the choice of hyperinflation or recession. Given the sharp and semipermanent decline in demand from the US, the likelihood is higher for the these countries to choose the latter. Why debase your own currency when there is NO benefit? Taking the former route will be going back to Bretton Woods I with all the inflation ramifications. Also, commodity rich countries do not have to devalue their currency with the backing of hard assets. Gold didn’t just back currency. Gold IS currency. It has all the characteristics of a currency. The debasement of the USD may not lead to the debasement of all currencies. If it did, it is even more important to buy gold to protect real wealth and preserve real capital.The world can choose to abandon the USD hegemony and move to a more sustainable currency model. Unfortunately, that will spell the end of the US (no foreign reserves to buy imports, not enough production capacity to export its way out). Then again, there is the military card…..

Its status is dependent on the belief of US’s creditors in the country to preserve the value of the USD. Bernanke just destroyed that myth. The US just went on the path of beggaring its creditors. It will be met with retaliation: dumping US treasuries and switching out to hard assets/commodity currencies.Bernanke’s actions on Wednesday was an act of desperation or worse, deliberate default. No creditor will trust the US again.And of course you are also right about what is backing the USD. Which is why the Chinese have been warning the US, to no avail.

How about passing a law that says all banks taking bailout money must pay all bonuses in MBS’s, CDO’s, and CDS contracts. Then tax the them as bonus income at their face value. This would in effect claw back previous pay as we all know these assets are worth far less than face value. Pay these guys with the products they created and then see how they try to value them. If you can pay bonuses in stock why not other paper assets.

“Getting Tough” with Predator Financial InstitutionsAIG, Larry Summers and the Politics of Deflectionby F. William EngdahlPreserving the CDS bubble….”The political ‘outrage’ expressed by the Obama Administration is an example of ‘perception management.’ The population is being slylyduped into believing their officials are working in their interest. In reality the officials are channeling growing popular outrage over endless bank bailouts away from the real problem to an entirely tertiary one. The US Government has injected $180 billion since September 2008 to keep the ‘brain dead’ AIG in business and honoring its Credit Default Swap obligations. In effect, they are propping up the casino to continue endless gambling with taxpayer dollars.The rise of a market in derivatives or ‘swaps’ contracts supposedly to ‘insure’ against a company going into default and not being able to honor its debts, the Credit Default Swaps market, is at the heart of the global financial catastrophe. The market was ‘invented’ by a young economist at JP MorganChase, interestingly enough one of the few big banks recording profit today……”.http://www.globalresearch.ca/index.php?context=va&aid=12787

This would be too fair and require too much common sense; hence, they won’t do it!

Sorry, DAPeople sell their stocks when they go DOWN. Just look at Mutual Fund outflows for 2008 compared to previous years.

@Wolf in Wilds et alAll of this talk of hyperinflation and comparison of the current situation of the USA with 1920′ Weimar Republic is interesting. Maybe there is another way too look at it though … Niall Ferguson had this to say in the FT on Jan 1 2008 => An Ottoman warning for America

g,absolutely yes. and then throw them in jail.

Are you sure you have the right link?

Oh Phil, you linked to a pornsite!

*Update*Thanks to RGE Monitor staff! My account has been re-activated quickly after I replied. So one approach is to reply the email you receive about subscription exipiration stating for access to Professor’s blog. Then your account will be updated soon (during regular business hours, Eastern Time, I think).

3 o’clock! Ferry time? Anyone?

They sent the inflatable dinghy – it was all they had left. Unfortunately they didn’t repair the hole in the tube due to budget constraints and it is now shipping water.

WASHINGTON – The White House says new projections of spiraling budget deficits won’t stop President Barack Obama from achieving his goals or keeping his promise to cut the country’s red ink in half within four years.White House spokesman Robert Gibbs said Friday that the administration is a bit more optimistic about the nation’s economic growth over the long term than congressional analysts. The congressional projections released Friday say Obama’s budget would generate deficits averaging almost $1 trillion a year over the next decade.The Congressional Budget Office figures predict Obama’s budget will produce $9.3 trillion worth of red ink from 2010 through 2019. That’s $2.3 trillion worse than the White House predicted in its budget.http://news.yahoo.com/s/ap/20090320/ap_on_go_pr_wh/obama_budget

Am I blind, or MarketWatch site is blind??This MarketWatch site says that Dow p/e is 28.41 as of 3/20/09?http://www.marketwatch.com/quotes/indu

Does the President not realize that he is simply “roadkill surrounded by vultures”?

Why not set up over on blogspot? You can post there and people who are interested in your particular topic can follow? I know I try to keep it short here and do anything with a significant length over there.You main themes (pay justice) are a reflection of a very important force impacting our economy. I would expect to see more discussion of wages, labor shock, and other related topics in the near future here, courtesy of the Brain Trust activity. Please check back in.I wish you and your husband the best, especially as it relates to navigating your way through the next couple of years with your current situation.ex VRWC

b,and other people buy them.

This is a splendid example of “tweedledum” and “tweedledee”. Who is the more criminal person–the bank robber, or the guy who drives the getaway car?

One reason why I don’t worry about saving for retirement.

There is nothing that the industrialized world is doing that can be done without fossil fuel. Including building and fueling alternative cars, power stations, etc.theCat is right.

Wolf that make way too much sense. I hope we avoid a hot war but the excess of labor and manufacturing capacity left by the collapse of the American consumer makes that outcome less likely. The powers that be will balance supply and demand some how. Woe is us.

All of the executives of the companies receiving largess from the AIG bailout get large BONUSES. These bonuses would likely not have occurred or been seriously scaled back without the AIG bailout. When executives can no longer profit from federal monies, the banks will stop fighting nationalization and real resolution to this crisis can begin.

And these are same people who are being encouraged to go out and borrow more.Sounds like a plan, to me.

I think this had less to do with who he was critical of than with the fact that he filed a criminal complaint with the U.S. Attorney’s Office. Not exactly keeping a low profile.An old girlfriend and I used to talk on the phone for hours and mused on the likelihood that our calls were being wiretapped by the government. We would toss in a random “kill the president” now and then just to see if anyone was listening. If the men in black ever showed up they must have stayed on the down low.

Back in the early days of email it was discussed in hacker (in the original sense of the term) circles that email was going to be heavily monitored by TPTB. Certain individuals (who shall remain nameless) devised a program (nicknamed “NORIEGA”) that inserted random key phrases into all emails, in an attempt to overwhelm the monitoring system.These days, obfuscation is a far superior tactic.

You’ve never seen data presented like this. With the drama and urgency of a sportscaster, statistics guru Hans Rosling debunks myths about the so-called “developing world”.http://www.ted.com/index.php/talks/hans_rosling_shows_the_best_stats_you_ve_ever_seen.html

No … it’s definitely the tequila.And that worm at the bottom of the bottle doesn’t help!PeteCA

which retailer? Walmart? Costco? Target? KMart? just wondering…. Good data….

Accounting Brothel Opens Doors for Banker FiestaMarch 19 (Bloomberg) — The banks demanded that the accountants give them leeway in how they report losses to investors. The accountants responded by giving away their souls.This week, the Financial Accounting Standards Board unveiled what may be the dumbest, most bankrupt proposal in its 36-year history. If it stands, the FASB ought to change its name to the Fraudulent Accounting Standards Board. It’s that bad.Here’s what the board is floating. Starting this quarter, U.S. companies would be allowed to report net-income figures that ignore severe, long-term price declines in securities they own. Not just debt securities, mind you, but even common stocks and other equities, too.All a company would need to do is say it doesn’t intend to sell them and that it probably won’t have to. In most cases, it wouldn’t matter how much the value was down, or for how long. In effect, a company would have to admit being on its deathbed before the rules would force it to take hits to earnings.So, if these rules had been in place last year, a company that still owned shares of American International Group Inc. or Fannie Mae, for instance, could exclude those stocks’ price declines from net income entirely. It would make no difference that the companies were seized by the government last year, or that both are penny stocks. The loss would get buried away from the income statement, in a balance-sheet line called “accumulated other comprehensive income.”Desperate BankersThese are the earnings we get when the people who write accounting standards give in to desperate bankers. And it’s no mystery why the three FASB members who voted for this — Leslie Seidman, Lawrence Smith and Chairman Robert Herz — did so. (The two who opposed it were Tom Linsmeier and Marc Siegel.)Since the credit crisis began, the board’s members have been under assault by the banking industry and its wholly owned members of Congress. The most recent display came last week at a House Financial Services Committee hearing, where Democratic Representative Paul Kanjorski and other lawmakers beat Herz like a dog. Herz declined my request to be interviewed. A FASB spokeswoman, Chandy Smith, confirmed my understanding of how the rule change would work.The banks want unfettered license to value their assets however they see fit, and to keep burgeoning losses out of their earnings and regulatory capital. The FASB had been holding its ground, for the most part. Now, though, the board has assumed the fetal position.Differing TreatmentUnder the current rules, securities get differing accounting treatments depending on how they are classified on the balance sheet. When labeled as trading securities, they must be assigned marked-to-market values each quarter, with all changes flowing through to net income. Otherwise, changes in value don’t hit the income statement, unless the securities have suffered what the accountants call an “other-than-temporary impairment.”While the term may be cumbersome, the idea is that companies need to show losses in net income once they no longer can pretend that an asset’s plunge in value is only fleeting. Think of a man who gets sent to prison for 20 years. That’s not necessarily a permanent sentence. Yet it’s definitely not temporary.The board’s proposal tosses the old principle aside. Even if a loss is deemed not temporary, companies still would be allowed to keep it out of net income. There’s one exception: If a company holding debt securities concludes some of the decline is due to credit losses, that portion would need to be included on the income statement. Otherwise, the losses stay off.You just know how this will turn out: Debt holders will say their losses almost always are due to something other than credit losses, such as liquidity risk, because it’s impossible to prove their judgments wrong. So the dents to net income will be minimal. That’s exactly what the FASB is trying to accomplish.Investor ProtectionThere is something investors can do to protect themselves: Ignore net income and start focusing on the real bottom line, a term called comprehensive income, which is found on a company’s statement of shareholder equity. General Electric Co., for example, reported $17.4 billion of net income for 2008 — and a comprehensive loss of $12.8 billion.For years, the FASB has used comprehensive income as a dumping ground for losses that it has decided are too politically radioactive to be included on the income statement. These include changes in the values of corporate pension plans, foreign currencies, certain derivative instruments, and securities classified as available for sale. That’s why investors should stop giving credence to net income.They have done this already with Tier 1 capital, the government’s main solvency measure for banks, which ignores lots of losses and treats some types of debt as if they were assets. Nowadays, bank investors are obsessed with a no-frills capital benchmark called tangible common equity. This leaves out intangible assets, such as goodwill from past acquisitions, and preferred stock, which acts like debt and must be repaid before common stockholders can claim any share of a company’s assets.What’s good for the balance sheet is also good for the income statement. Enough with the fluff. Net is dead.The FASB might be, too, if it keeps this up.http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_weil&sid=aGdxdLHUVGrs#

This is a tragedy for the growth in landfills

We’ll be back in good shape in no time after we give 10 or 20 more trillion to the banks, that will definitely get people to start buying stuff again, don’t worry.

Live goods drop is interesting. Happens to have been my bailiwick for awhile.Browsing through Wal-Mart and a couple of big box ads I was surprised to see a big jump in prices of live goods – 6 packs and 4″ vegetables that have held steady around a dollar for a decade now priced at $3 each.And the thing is, I don’t blame them. Growers margins were cut to the bone dealing with the big box retailers. I worked at a mom and pop nursery for a couple of years and then spent three years working at a big box. I was shocked how tight the margins were…so close to zero. That was in 1997. The run-up in oil and fertilizer prices last year probably put growers negative on some contracts, and gave them leverage to demand higher prices for their product.Cut to this weeks Home Depot ad – 4″ annuals 3 for $1, 4 days only. Looks like they are back to running live goods as loss leaders, at least this weekend, because we were paying growers .45 for 4″ plants 12 years ago.I’m definitely making a trip tomorrow.

Here’s my take:Most of the ‘eased’ money goes to buying up F&F mortgages. Why? First, a lot of ‘Alt-A’ are due to reset this summer and that could very well kick off another round of foreclosures. (The Alt-A market is even bigger than subprime.) A high percentage of Alt-A were issued by foreign banks operating in the US – thus the source of this money is foreign. Their interest rates are determined by Libor, not Fed. When they reset, the new interest rates will reflect Libor, which are higher than Fed, and thus will represent a continued high burden these home owners. The aim of the new money is to empower F&F to buy up a large chunk of foreign-issued Alt-A, and reset them according to Fed rate, which as we know is quite a bit lower.The benefits are twofold: Reset the Alt-A to a much lower interest rates and thus arrest the probable second round of foreclosures. Bring a large chunk of this foreign mortgages into US-controlled F&F, which ‘cannot’ default. Foreign banks who sold their Alt-A to F&F thus reduce their risks by holding agency debt. This helps in holding up the dollar. In short, the Fed is using F&F to help avert probable Alt-A crisis.

Who is the more criminal?maybe the banker …

90% tax on bonus money to top executives at financial institutions got money from TARP? will there be 90% tax on money got from AIG thru derivatives collateral call? after all that is TARP money too? some how I will not be surprised that this law get passed overnight in congress.

i wont be surprised that there will be talk about asking financial institutions to return the TARP money they got from AIG thru derivative contract collateral call. if they dont return, the congress will pass into law 90% tax on that TARP money.

g,hahahahahahahahhahahahaahaaa..i did not see that program but i wish i did!

or there’s something wrong with our GPS system??Polar shift anyone??

Does the Professor’s post on this being a Dead Cat Bounce still hold even with the government’s action on Wednesday?

Brett, you parrot Obama. Can’t you think for yourself? Can’t Obama? Wall Streeters perform one of the two essential functions of capitalism: the twin towers of capital and labor make the wealth machine tick.Cat, you misunderstand what wealth is. Wealth is organization. If you put all the pieces together properly, you can have a motorcycle. You can take your girl into a beautiful private forest and kiss her until one thing leads to a creative other. If you’re not organized, you’ll have no wealth, only parts.If you were intellectually honest, you would admit you have no idea what the energy inputs are into this planet. How do you know that fossil fuels aren’t fungible? (look the word up in the dictionary)I’m tired of these poor little rich kids who can’t appreciate the wealth our parents’ generation has provided us. It wasn’t that long ago we Americans wondered at the blessing of being able to cruise down the highway on vacation all day long at 60 mph. Now it’s considered a sin against the planet.Never mind that the science behind global warming is suspect. We wouldn’t want to think that much outside the box, would we? Personally, I like fighter jets, Ackerman. They’ve made it possible for us to blog instead of cleaning out the stables on the fiefdom. if you believe this lie promulgated by the elite-intelligentsia, you’re just one of the many flies on shit.I believe nothing of what I hear and only half of what I see. Americans would be wise to have a more skeptical attitude. Oh, I can hear the howls of protest already, but consider this: If everyone thought the way I do, I’d be a damn fool to think any differently wouldn’t I?

Brett, you parrot Obama. Can’t you think for yourself? Can’t Obama? Wall Streeters perform one of the two essential functions of capitalism: the twin towers of capital and labor make the wealth machine tick.Cat, you misunderstand what wealth is. Wealth is organization. If you put all the pieces together properly, you can have a motorcycle. You can take your girl into a beautiful private forest and kiss her until one thing leads to a creative other. If you’re not organized, you’ll have no wealth, only parts.If you were intellectually honest, you would admit you have no idea what the energy inputs are into this planet. How do you know that fossil fuels aren’t fungible? (look the word up in the dictionary)I’m tired of these poor little rich kids who can’t appreciate the wealth our parents’ generation has provided us. It wasn’t that long ago we Americans wondered at the blessing of being able to cruise down the highway on vacation all day long at 60 mph. Now it’s considered a sin against the planet.Never mind that the science behind global warming is suspect. We wouldn’t want to think that much outside the box, would we? Personally, I like fighter jets, Ackerman. They’ve made it possible for us to blog instead of cleaning out the stables on the fiefdom. if you believe this lie promulgated by the elite-intelligentsia, you’re just one of the many flies on shit.I believe nothing of what I hear and only half of what I see. Americans would be wise to have a more skeptical attitude. Oh, I can hear the howls of protest already, but consider this: If everyone thought the way I do, I’d be a damn fool to think any differently wouldn’t I?

This may seem like conspiracy theory even to some of the tin foil hatters around here, but it seems to explain a lot that is otherwise inexplicable. It’s long but compelling. Draw your own conclusions.http://www.youtube.com/watch?v=eAaQNACwaLw

Joe Salatin says that the big mistake is that the bright minds are all taken away from farming, where they are really needed! So, yes, it’s as you say, but probably not as you see/thought.BTW – Jim Rogers is really talking up agriculture. He’s absolutely right.Food, Shelter and Water…Mark

Decentralization of power, what a concept! This is the primary (only real) tenant of anarchism. It’s how nature behaves. Centralization requires greater amounts of energy, something that we’re slowly running out of… It’s one reason why I rebuff the One World Government theory.Mark

We HAD cheap energy -oil- and look at where we’re at now!I was tracking fusion back in the early 80s. I was real excited about the prospects. But then I saw the big picture. If we had really cheap and abundant energy we’d just create larger populations that would trash the planet, kind of like what we’re seeing now (as a result of fossil fuels).But I agree on the sustainability part. Until we ditch this “growth at all costs” mentality we’re going to continue toward the abyss. NOTE: and then you turn around and jump on the growth bandwagon? Sigh, apparently you haven’t watched Dr. Albert Bartlett’s presentation: it’s absolute viewing for anyone who suggests “solutions” to today’s problems.Mark

LOL!Yes, it’s back to pretending again… Could this be the mother of all moral hazards?They pretended to pay us, so we pretended to work. Sooner or later people will disengage from this dysfunctional system.Mark

Ever consider that this is but one big cycle, and that perhaps it’s coming to a close?It’s all about growth. The greater the overall consumption of natural resources the harder it is to add growth.All system fail, eventually.Speaking of big cycles, our inter-glacial period (10,000 to 12,000) is about up. After which, ALL systems that we know/depend upon will cease to exist.Mark

Of all that I’ve read or heard Engdahl’s piece makes the most sense. He writes:Fortunately there is a simple way out of the AIG debacle. The US Government can step in and fully nationalize AIG, 100%, kick out responsible management, declare AIG’s CDS contracts null and void and let holders sue the US government to regain value for what were in reality lottery gambles not loans to the real economy. They own 80% so the step is small to 100%. Doing that would end the global market in CDS and open the door for countless legal challenges. But AIG’s counterparties, as we begin to learn, were exactly the big Wall Street players like Goldman Sachs, Citigroup, even Deutsche Bank. They have gotten enough taxpayer bailouts to cover their risk in CDS. Let them recognize risk is the heart of banking, not the opposite.Unfortunately, this only clears the deck for a reshuffle. As long as the system is based on growth, and as long as we pretend that this elephant isn’t in the room, we’ll again find ourselves in this situation (though perhaps for the last time?).Mark

I guess Bernanke has two options– deflation or end of dollar’s hegemony. He has chosen the latter. His helicopter comment just sums it up. And between the two questions lies the choice: American people or Wall Street. And he has chosen Wall Street. Because the real worth of their debt will be much reduced but American people will end up much poorer and worse off because of it.

I suppose it is because he expected “change” from Obama. When Obama was outside the system, he seemed to have a good critique. As soon as he became part of the system, he started thinking too much like the system. He needs to take Bernanke, Geithner with a grain of salt. The thinking has taken “the” form rather than become a form unto itself. If the system were to be believed, then this crisis was never going to happen. It was only the individualism of people like Roubini who could think outside the box and provide a good critique which saw it coming. That is where I personally feel Obama is wrong. It is hypocritical to abuse the same hedge funds and provide them with aid under TALF. It is also hypocritical to bring the bonuses at AIG under scathing criticism yet “review” it after the congress will have passed a 90 percent tax on them. Whatever be the reasons, but will Obama take a stand or sink with the system? And, again, the firms receiving TALF, what, they might withdraw the receivership of their aid should the bonuses be taxed? What? The govt is forcing this aid upon them? Or they feel they could do whatever they want with impunity and get away with it because the goverment is begging them to take the money?There is something horribly wrong…

m,.http://www.youtube.com/watch?v=bfLpnXQpjvw&NR=1.speaking of elephants. btw, i agree with you.these dilemmas of growth, material wealth, personalfreedom / responsibility etc., etc. need tobe investigated and integrated by all of us,individually and collectively.we need to become adults!ps. v.v. chari would make a good treasury secretary oreconomic adviser.

Give me a break. Bush is history. Obama and his Democratic gangs are in charge now. They are all voted by American to fix the problem, but they are not charging the nation into new direction. For them, it is still privatize profit and socialize loss. Obama and his Democratic gangs are no different from Bush.

g,his compass will finally read truemagnetic north!

“Obama might as well force consumers to buy them by tarffs on Toyota and others”you are absolutely right. this crazy Obama will not hesitate to do that? and that will force alots of Toyota and others factories close down in USA. and force alots of USA workers out of jobs. this crazy Obama will destroy the market efficiency and create armagedon Depression.

What I meant was, Obama took a stand against the bonuses and he should go along with it. He argued against the gambling nature of hedge funds and he shouldn’t provide them with aid. He should be consistent with what he says, whether he is left-wing or liberterian is relaticely irrelevant. To me it seems that he is fooling main street with poetry and doing everything he can do for wall street. Why? Becuase Bernanke says the financial system is the heart of the economy and untill that is fixed, the world will come to a sudden halt?Well, if Obama thinks that, he is thinking too much like the system. What we need is end to this nonsensical throwing around of money to hedge funds and God knows whichever entities, nationalization of the too-big-to-fail so that American taxpayer isn’t cheated and capitalism saved, 90 percent tax to the bonuses for the companies that receive aid, and the companies that don’t want aid should now get it. The goverment’s role should be to protect the American people and yet at the same time not allow a systematic collapse of the financial system. However, a systematic collapse can be avoided by nationalizing the too-big-to-fail and allowing others to fail. This is more like taking a stand which is not to bolster the wall street but to protect the main street, an individualistic stand, which doesn’t fall in principle to the interests of the very people who cause the crisis with the thought that “this is what will make it work” — in Bernanke’s mind– without and relevance of the moral hazard.

private capital, run out of USA. run run. and USA treasury and agency debts holders. run run too.

“We’re essentially monetizing our country’s debt and deliberately devaluing our country’s currency. We’re also screwing over our foreign creditors”I think we are not just screwing the foreign creditors. we are fighting the foreign creditors now. look for any kind of investment to dry up and FED to print more money out of thin air.

and the contract i had with the u.s.a. has been broken. And now my children and i have to pay these bankers. to hell with just breaking contracts with them i say hang em high. REALLY, END THEM

wow, does Geithner wants to destory FDIC?”The FDIC will provide a low interest non-recourse loan up to 85% of the value of the assets”that is just mad.”Private investors, then, would be contributing as little as 3 percent of the equity, and the government as much as 97 percent.”taxpayer are on hook now. well, Ben will be on hook to print more money now.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a5z1.VcMZHBM“the Fed’s TALF program may lend as much as $1 trillion to investors from hedge funds and pension funds to insurance companies to buy recently created securities backed by loans for car purchases, college education and real estate. “same question, will these hedge funds, pension funds, insurance companies subject to 90% bonus tax for receiving money from government?

PS. my name is Hayes not Corcoran (the author of the article I posted last night)My political orientation is generally well to the left of center but I don’t by the Obama propaganda – IMHO he is indeed taking on too much at one time; his resources are inadequate and like Bush appears to have surrounded himself with ideologues. But in his case instead of neo-cons such as Paul Wolfowitz, we are blessed with the likes of Larry Summers who presided over the dismantling of Glass-Steagall (link).The circus that Congress has become, led by Dodd (also a Glass-Steagall alumnus), is creating a situation where confidence in leadership at this critical juncture is all but gone. The AIG bonus debacle, initially a red herring to distract from the tens of billions funneled to the banksters backfired on Obama when it is he who signed the Stimulus bill that included the “Dodd/Getithner Ammendment”. Instead it revealed the self-righteous hypocrisy of our leadership, though they are doing their best to back peddle.The bottom line is that there is a serious leadership vacuum and the evidence is mounting that the person in charge lacks the management skills, values and most importantly the leadership skills to guide the country out this morass. But at least he was funny during his appearance on Leno, if taking cheap shots at the disabled can be considered funny.Now that I have that off my chest it’s back the beach, actually I’m on the beach as I write this. Time for a refill of my coffee cup as I continue to prowl the blogs and news sites.On a “positive” note it looks like Turbo will be coming out with some details of the Public Private Partnership to deal with the Toxic assets (PPPT) on Monday (probably will be leaked Sunday), which could be good for a few hundred points on the Dow.

The Public Private Investment Fund will rely on the FDIC. We have to also remember that private capital can know own33% non-voting stock in banks without trigerring the bankholding company regulations. The FDIC is the “new FLSIC”.The most logical instrument for dumping on the Taxpayer isthe FDIC. After it is done. The beneficiaries will rail againstthe liberal FDIC. We are being set up to have the mother ofall bailouts by way of the FDIC. The banks controlled by private capital and hedge funds will gamble big time with FDIC insured money, and will pass on losses. The FDIC and TALF will backstop the PPIF. All this machinations bear an uncanny resemblance to the Savings and Loan Crisis. The Resolution Trust Corporation gave away assets to insiders. “Nothing isnew under the sun” Shakespeare. LOOTING, LOOTING, LOOTING,by the “men behind the curtain”.

via NCMother of All Stealth Scams?Earlier this week, Michael Hudson wrote an excellent comment in counterpunch, The Real AIG Conspiracy:It may seem odd, but the public outrage against $135 million in AIG bonuses is a godsend to Wall Street, AIG scoundrels included. How can the media be so preoccupied with the discovery that there is self-serving greed to be found in the financial sector? Every TV channel and every newspaper in the country, from right to left, have made these bonuses the lead story over the past two days.What is wrong with this picture? Is there not something over-inflated about the outrage led most vociferously by Senator Charles Schumer and Rep. Barney Frank, the two leading shills for the bank giveaways over the past year? And does Pres. Obama perhaps find it convenient that finally, at long last, he has been able to criticize something that he believes Wall Street has done wrong?Even the Wall Street Journal has gotten into the act….

One of the first two you listed…

h,the financial crime of the last two centuries, ongoing! outrage or revolution.the fbi is on it? the justice department? somebody had better be. congress?all these “institutions” cannot be blind to what every citizen can see. if theyremain so the laws of nature will see they are removed.

@ n.r.where is the “triage”? that seemed likea fundamentally important part of any correctiveintervention. oh well.

Good link every one should read it.

Basic physics. Open systems/closed systems: open thermodynamic systems exchange heat, light, or matter with their surroundings, closed systems do not. No outside energy flows into a closed system. Earth is an open system; it receives outside energy from the Sun.Facts are facts in physics.

Where is the judicial branch of our government in review constitutionality of Fed/Treasury actions against the citizens of USA? Asleep, enabler?

Actually, it was William H. Donaldson who was chairman of the SEC at the time. No matter, Paulson is a gigantic scumbag and deserves to die a horrible death.