First – for me to poop on!

“…we need to do more to avoid the tsunami of foreclosures in mortgages.” Both residential and commercial. Ladies and gentelmen, we are just getting started.

If you have been following ZeroHedge this post from earlier this afternoon was timely in terms of the market spike – if ZH is indeed correct things could get very interesting in the next few trading secessions -Quant Intraday Market CommentaryPosted by Tyler Durden at 2:21 PM”Zero liquidity now”"Large quant blow up in progress right now”http://zerohedge.blogspot.com/2009/04/quant-intraday-market-commentary.html

S&P 325David Tice Says S&P May Plunge 62% To 325April 16 (Bloomberg) — David Tice, the chief portfolio strategist for bear markets at Federated Investors Inc., said the Standard & Poor’s 500 Index will probably plunge about 62 percent.He spoke during a Bloomberg Television interview today. The Federated Prudent Bear Fund that he founded returned 6.7 percent last year as the S&P 500 plunged 38 percent, the most since 1937.Tice said the benchmark index for U.S. stocks may slump to about 325. It closed today at 865.30. The measure has surged 28 percent since March 9, the most in five weeks since the 1930s.http://zerohedge.blogspot.com/2009/04/david-tice-says-s-may-plunge-62-to-325.html

Yeah, I like zerohedge, which I learned about through you. But I don’t get all the “quant blow up” mambo jambo which is yet to materialize; perhaps, I am being too impatient.

“He talked positively about consumer staples such as PG.” (Not Tice, the other guy)

So is Goldman an accident just waiting to happen? They seem to be defying all odds.

Wow man! Your post is way cool!Yeah! the compounded REAL rate of return for the risk free rate (3-month T bills), historically, has been indeed close to zero percent, I believe it is around 0.5% to be precise.In order to accumulate higher, REAL (as opposed to nominal) compounded rates of return, one has to “go up” the time-space risk ladder via either duration (time), if you are talking US treasuries (3% compounded real return historically), or asset class (space): corporate bonds (5% compounded real return historically) and equities (8% compounded real return historically).But for higher real compounded rates of return, the devil is in the risk!!!(e.g., the 70% drop in US equities in 66-82 you mention)For the stock market the expected real annual return is in the order of 8% (10-11% nominal) but the standard deviation of the annual return is in the order of 20%! Dig that, man?;-)

I’ll have what you’re having ;<D

Yeah! An accident waiting to happen, in which us, the little guys in the US economy, are the ones that will get squashed.Unfortunately, the GS boyz, as most rich fellas, are well beyond the point of being “bogged down” by nationalistic ties, and other non-sense patriotic stuff; Dat “silly” stuff is left for 18 year old boys that get send to die in wars) and Joe6packs to believe in; not the golden boys wearing their multi-thousand USD Armani suits (I do not have enough words to tell you how much I despise that “stiff” bankers look; the look that was so common back in my business school days – and still is)Diz guys, are global, diz guys are international; they are beyond poverty, pain and suffering. Dat ugly stuff is left for the masses; Da’ ones who always end up holding the empty bag.

So what is the latest position of the Professor on this rally?- Real or fake?- If fake, how much more to go? New lows in SPX?- If real, how much more to go? SPX 1000 possible?Thanks Mr. Roubini.

So, to rephrase, when it comes to money, people are too greedy and grasping to help others and the government must be utilized as Robin Hood. Oh, and anyone who believes in a particular religion or school of thought obviously doesn’t see its flaws and is therefore stupid. Of course, the very nature of ‘beliefs’ implies the existence of flaws, so probably the lot of us are doomed to stupidity. Awesome.

Hayek – 1977 answers:”Now, fully to understand this, we must free ourselves from what is a widespread but basically wrong belief. Under the Gold Standard, or any other metallic standard, the value of money is not really derived from gold. The fact is, that the necessity of redeeming the money they issue in gold, places upon the issuers a discipline which forces them to control the quantity of money in an appropriate manner; I think it is quite as legitimate to say that under a gold standard it is the demand of gold for monetary purposes which determines that value of gold, as the common belief that the value which gold has in other uses determines the value of money. The gold standard is the only method we have yet found to place a discipline on government, and government will behave reasonably only if it is forced to do so.I am afraid I am convinced that the hope of ever again placing on government this discipline is gone. The public at large have learned to understand, and I am afraid a whole generation of economists have been teaching, that government has the power in the short run by increasing the quantity of money rapidly to relieve all kinds of economic evils, especially to reduce unemployment. Unfortunately this is true so far as the short run is concerned. The fact is, that such expansions of the quantity of money which seems to have a short run beneficial effect, become in the long run the cause of a much greater unemployment. But what politician can possibly care about long run effects if in the short run he buys support?My conviction is that the hope of returning to the kind of gold standard system which has worked fairly well over a long period is absolutely vain. Even if, by some international treaty, the gold standard were reintroduced, there is not the slightest hope that governments will play the game according to the rules. And the gold standard is not a thing which you can restore by an act of legislation. The gold standard requires a constant observation by government of certain rules which include an occasional restriction of the total circulation which will cause local or national recession, and no government can nowadays do it when both the public and, I am afraid, all those Keynesian economists who have been trained in the last thirty years, will argue that it is more important to increase the quantity of money than to maintain the gold standard.”In fact I would like my money could be backed by things I need (cattle, cars, books, food and why not gold). At least I could buy “MY inflation index”.Concerning gold standard I repeat Hayek:”The gold standard is the only method we have yet found to place a discipline on government, and government will behave reasonably only if it is forced to do so.”But I think it is very difficult to place a discipline on these guys.

great posts tonight at http://zerohedge.blogspot.com/ and this from the SF Fed President (another Must Read)A Minsky Meltdown: Lessons for Central Bankers

Investment OutlookBill Gross | September 2002Dow 5,000http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2002/IO_09_2002.htm

In the Zero Hedge article I love how the spin is given in the Hoeffel letter:If a Participant Bank contributes assets to an auction, and subsequently decides to not accept the highest bid, will the bid be used to value the asset on the bank’s balance sheet? This may create a disincentive for banks to contribute assets to the program.He makes it sound like it’s all a FAVOR that the banks are doing, “contributing assets to the program,” like they’re being charitable! What weasels!Pull the plug, pull your money out of these sham institutions!Mark

I remember well that one:-)

SF Fed President Speech:A great contribution that took Yellen a lot of mambo jambing to finally get to the meaty stuff in which AG and Co. failed miserably:supervisory and regulatory policies towards the mortgage and security industries:Another important tool for financial stabilityRegardless of one’s views on using monetary policy to reduce bubbles, it seems plain that supervisory and regulatory policies could help prevent the kinds of problems we now face. Indeed, this was one of Minsky’s major prescriptions for mitigating financial instability. I am heartened that there is now widespread agreement among policymakers and in Congress on the need to overhaul our supervisory and regulatory system, and broad agreement on the basic elements of reform. 15Many of the proposals under discussion are intended to strengthen micro-prudential supervision. Micro-prudential supervision aims to insure that individual financial institutions, including any firm with access to the safety net, but particularly those that are systemically important, are well managed and avoid excessive risk. The current system of supervision is characterized by uneven and fragmented supervision, and it’s riddled with gaps that enhance the opportunity for regulatory arbitrage. Such arbitrage was a central component in the excessive risk-taking that led to our current problems. It is now widely agreed that such gaps and overlaps must be eliminated, and systemically important institutions—whether banks, insurance firms, investment firms, or hedge funds—should be subject to consolidated supervision by a single agency. Systemic institutions would be defined by key characteristics, such as size, leverage, reliance on short-term funding, importance as sources of credit or liquidity, and interconnectedness in the financial system—not by the kinds of charters they have. Another critical shortcoming of the current system is that it lacks any legal process to enable supervisors of financial conglomerates and nonbanks to wind down the activities of failed firms in an orderly fashion. The need for a resolution framework that would permit such wind-downs of systemically important firms is also widely accepted.The current crisis has afforded plentiful opportunities for supervisors to reflect on the effectiveness of our current system of micro-prudential supervision. The “lessons learned” will undoubtedly enhance its conduct going forward. 16 But, regardless of how well micro-prudential supervision is executed, on its own it will never be adequate to safeguard the economy from the destructive boom and bust cycles that Minsky considered endemic in capitalistic systems. Analogous to Keynes’ paradox of thrift, the assumption that safe institutions automatically result in a safe system reflects a fallacy of composition. Thus, macro-prudential supervision—to protect the system as a whole—is needed to mitigate financial crises.The roles of micro- and macro-prudential supervision are fundamentally different. In principle, many individual institutions could be managing risk reasonably well, while the system as a whole remained vulnerable due to interconnections among financial institutions that could lead to contagious cycles of loss and illiquidity. For example, it is prudent for institutions to sell risky assets and pay off debt when a decline in asset prices depletes capital. But the simultaneous behavior of many institutions to protect themselves in this way only intensifies the decline in prices. Moreover, when many institutions try to de-lever simultaneously, market liquidity can instantly evaporate. Systemic risk is endogenous to the working of the financial system.Capital requirements could serve as a key tool of macro-prudential supervision. Most proposals for regulatory reform would impose higher capital requirements on systemically important institutions and also design them to vary in a procyclical manner. In other words, capital requirements would rise in economic upswings, so that institutions would build strength in good times, and they would fall in recessions. This pattern would counteract the natural tendency of leverage to amplify business cycle swings—serving as a kind of “automatic stabilizer” for the financial system. Financial stability might also be enhanced by reforming the accounting rules governing loan loss reserves. A more forward-looking system for reserving against such losses could make regulatory capital less sensitive to economic fluctuations. 17 In addition, most proposals for financial reform emphasize the need for stronger liquidity standards. The funding of long-term assets with short-term, often overnight liabilities, is a source of systemic vulnerability. One interesting recent proposal would disincent overreliance on short-term funding by relating an institution’s capital charges to the degree of maturity mismatch between its assets and liabilities. 18 There has been considerable discussion recently of the need for a new macro-prudential or “financial stability” supervisor—whether the Fed or some other agency—with responsibility to monitor, assess, and mitigate systemic risks in the financial system as a whole.At this stage, the proposed reforms involve broad principles. The translation of those principles into a detailed supervisory program will be challenging, to say the least. But I am hopeful that the lessons we have learned will help us build a more effective system to head off financial crises. If we are successful, then we will have gone a long way toward preventing another Minsky meltdown.

I was about to suggest Minsky should be awarded a post mortem Nobel price, but then I thought: who cares!This is not to say that the people who have received the price are not deserving outstanding people, but the history of the price shows it is granted in rather arbitrary fashion; almost a joke.I am convinced that if a list of deserving individuals were drawn and the choice made randomly, the outcome would be a lot fairer and satisfying to the citizens of the world. (e.g., take a look at the blogging of the latest fella who got the price in Economics:-)…

Stephen Friedman is serving as chair of the Board of Directors of the Federal Reserve Bank of New York. He was appointed by Board of Governors to represent the public. Here is his bio:Stephen Friedman is retired chairman of The Goldman Sachs Group and currently serves as chairman of Stone Point Capital, LLC.He joined Goldman, Sachs & Co. in 1966 and became a partner in 1973. He was vice chairman and co-chief operating officer from 1987 to November 1990, and co-chairman or chairman from 1990 to 1994.Mr. Friedman is chairman of the President’s Foreign Intelligence Advisory Board and of the Intelligence Oversight Board. From December 2002 to December 2004, he served as assistant to President George W. Bush for Economic Policy and director of the National Economic Council.Mr. Friedman received his B.A. from Cornell University and law degree from Columbia University Law School. He is currently a board member of The Goldman Sachs Group, Memorial Sloan-Kettering Cancer Center, The Aspen Institute and the Council on Foreign Relations.http://www.newyorkfed.org/aboutthefed/org_nydirectors.htmlWe can sll sleep better knowing that the public has such a strong advocate - Charles

If you watch the recent Bloomberg interview with Taleb you’d catch him saying that regulators are stupid and that the system needs to operate on this premise: I’d say it isn’t so much that they are stupid, but, rather, they are corruptible. He also said that the system should remove leverage as a tool, which would correspond to the comment here about increased capital requirements. But perhaps the biggest comment by Taleb, one that appears to be missing from this discussion, is that we cannot have LARGE financial/banking institutions: he even went so far as to point out that these things don’t exist in nature (something that I’ve been trying to stress- only models resembling those in nature can even begin to attempt to claim sustainability).Mark

Mish has long been arguing that we are in deflation, basing it on the definitions that “Inflation is a net expansion of money and credit,” and “Deflation is a net contraction of money and credit.” He says, “In both definitions, credit needs to be marked to market.”He writes: Please consider this audio with Austrian Economist Frank Shostak on Mises on September 30, 2008 discussing recent actions by the Fed:“Will this printing create [price] inflation? This is dependent very much on what money will do next. If banks will not lend and banks sit on that cash forever and ever like the great depression because the risk is too high and the banks do not know if the lending will end up in good assets or bad assets, and because banks are in so many bad assets now they probably will not lend at all.”That is the observation that Murray Rothbard made, that during the Great Depression that banks have chosen not to lend because the risk of accumulating bad assets was far to high. So they were sitting on massive reserves. That is what is developing right now…”Says Mish: “I agree whole heartedly with Shostak and suggest we are following the Japanese model. This has been my thesis for years.”But I contend there is yet another possibility.It is true it is not inflation if the Fed doesn’t spend the money or loan it out, but it very well could be that the money ends up in a private account in the Cayman Islands, or in Switzerland, or in China or, say, in the Bank of Israel. This is a reasonable assumption given the Fed’s refusal to reveal the whereabouts of trillions of recently created dollars, and given the extent of fraud perpetrated by the Fed’s contacts, i.e., its friends and associates.Money it must be remembered can be used for other things besides spending it. For example, the Fed or its friends could give the central bank of China $10 billion and say do not spend this, put it in your vault and in exchange for that we’d like for you to do us these three favors. The money does not get spent, it is not inflation, but yet it buys something.Am I making sense? It goes something like this: Things are getting a little hot here. Would you be able to set aside five or six estates of say 600 acres each with private guards in exchange for, say, a planeload of $100 bills in world reserve currency?The Fed’s authority does not only include manufacturing the money by adding zeros as it passes through its Federal Reserve system; it also includes the physical authority to operate the actual printing presses at the US mint. One night of printing $100 dollar bills, loaded in the early morning hours on a C-130J cargo plane…?Beyond reach? I think not. Has anyone ever located the money taken to Iraq in a C-130J, last seen being unloaded with a forklift…?http://globaleconomicanalysis.blogspot.com/2009/02/fiat-world-mathematical-model.html

The U.S. “Federal” Reserve System was formulated after the Bank of England, the world’s first central bank, and was a continuation of these bankers’ unbroken record of fraud, booms, busts, and economic chaos.Fed Founder Paul M. Warburg was a partner in Kuhn, Loeb & Company, a representative of the Rothschild banking dynasty in England and France, and brother to Max Warburg who was head of the Warburg banking consortium in German and the Netherlands.The centralization of control over financial resources was far advanced by 1910, according to Fed historian G. Edward Griffin. With the Federal Reserve Act it was hammered home. Says Griffin, “In the United States, there were two main focal points of this control: the Morgan group and the Rockefeller group… In Europe, the same process of financial concentration had proceeded even further and had coalesced into the Rothschild group and the Warburg group.”

Where do you live?

The Founders of US Of Awere very wise men…

g,don’t forget africa. big continent. i thinkhe’s making sense but not in a good way.

We thought we elected genius, but no no no, we elected moron or ponzi. first government sponsored ethanol failed, next to fail will be solar energy, now this expansion of high-speed rail will fail and waste money, and all other Obama initiatives will fail too.http://www.marketwatch.com/news/story/Obama-unveils-plans-high-speed/story.aspx?guid={156CF8FE-29DB-4ED8-A2C5-6F899E54AD91}”In the US, the population is sprawled with 1st, 2nd, and 3rd ring suburbs. People get around with cars. High Speed Rail will not be economically or practically feasible to do in the US. Also, if they can’t make Amtrack consistently profitable then what makes you think the government can make High Speed Rail work???” from the comment

f,then you create the abs and cds and unleashthe power to create debt and extend creditto the lawyers and the priests of finance,but the veil of illusion becomes transparentlythin and everyone appears naked in the daylight..HolonA Holon is a part of the universe which is complete and consistent in itself, but is also an necessary integral part of a greater system which encompasses it.E.g. Atoms are a holon. Atoms are complete in themselves. They have a consistent form that can be relied to be the same no matter where they are found. Atoms however can join together to form molecules. Molecules are made of atoms. Molecules encompass atoms. Molecules are more complex than atoms. Molecules are holons because they are complete and consistent within themselves and because they can be organised into a basic living cell. Cells are holons which can form a body organ. Body organs can form a complete being…etc ….http://www.geocities.com/piers_clement/victor.html.re: too big to fail. becomes too big to regulate and toobig to prosecute. the king, the church, the god. too bigto resist? to integrated in your life to leave room foryou and your freedom. or the truth.

Bloomberg.com: Ortel Says GE Needs to Raise $25 Billion in Capital. Says their view of the economy makes Roubini look like an optimist.

Here is a well written article on what we are facing long term… We are SCREWED and none of this stupid stock market crap and Eaarnings and stress test and TARP and GM and Chryslar crap matters… All they do is plug the holes short term… Our Gov’t is BANKRUPT and so is our ECONOMY and so are WE. We lack the abilty to produce our way out of this and it will take 20-50 years to fix all this and that is only if every single politican does the right thing from this point on. Obama is trying to hang is hat on anything that will produce jobs, airgo his dream of High speed rrail. He knows if he doesnt produce jobs that can be identified he is a 1 term President.Read the article on our true debt.Knowledge@Wharton Law and Public Policy Research ArticleView Article on Knowledge@Wharton MobileA Thought for Tax Day: The Real Fiscal Crisis Is Yet to Comehttp://knowledge.wharton.upenn.edu/article.cfm?articleid=2209

Unsafe Money Market Guarantees Expire in AprilBack in September of 2008, money market funds made historic news by “breaking the buck”. These funds which were designed to offer slightly better returns than bank deposits or certificates were showing signs of weakness in the form of capital losses. From a September 17, 2008 marketwatch article:Money market funds pride themselves on their liquidity and the safety of their investments. All money market shares are priced at $1 — a figure so important to the industry that fund companies take losses to keep the share price from dipping below $1, which is known as breaking the buck.But with investment losses from repeated bank failures, firms found it to difficult to fight off the losses. The result was that money markets across the nation were “breaking the buck”.“They didn’t just break the buck, they shattered it,” said Don Phillips, managing director at investment research firm Morningstar Inc. This is only the second time that a money market fund’s net asset value has dipped below $1. In 1994, Denver-based Community Bankers U.S. Government Money Market Fund returned 96 cents on the dollar to investors when bad derivatives investments forced it to liquidate.With the scare of losing money in what was supposed to be safe, investors started withdrawing en masse. It was then that the government stepped in to guarantee all capital investments in money market funds, but this was a temporary measure. That temporary guarantee is now set to expire in just two weeks.Check out this excerpt from the T. Rowe Price Prime Reserve Fund:Notwithstanding the preceding statements, the T. Rowe Price money market funds are participating in the U.S. Treasury’s Temporary Guarantee Program for Money Market Funds. The Program generally does not guarantee any new investments in the funds made after September 19, 2008, and is scheduled to expire on April 30, 2009.If you think you are safe from an implosion in your money market, think again! If you think you have no money market to worry about, think again! If you have a brokerage account, then you probably have a money market. Every brokerage treats uninvested cash balances different, but in general they are swept into a money market fund of the brokerage’s choosing. In some cases, while the default behavior is to sweep the cash into a HIGH RISK MONEY MARKET, account holders can elect to choose only an FDIC insured sweep account instead.If you are not worried about your cash balances, then you probably just don’t like cash. If you are worried, then call your brokerage immediately, and demand that your cash be swept to only FDIC insured accounts.Unless Obama-san passes another emergency money market insurance extention, then you can expect that the “breaking of the buck” will continue in May. You have been warned!

More GS fodder… Goldman needs to go away and the question is who has the gonads to do it. The only one I see is Obama and if he wants to be a 2 Term Pres he needs to start doing the right things and actions that people view as for the benefit of the country….Mike Morgan is a registered investment adviser and a scrappy shoot-from-the-hip guy who doesn’t mince his words. Recently Morgan has come under fire from investment giant Goldman Sachs for his hard-hitting web site “Facts about Goldman Sachs”.According to the U.K. Telegraph:”Goldman Sachs is attempting to shut down a dissident blogger who is extremely critical of the investment bank, its board members and its practices. The bank has instructed Wall Street law firm Chadbourne & Parke to pursue blogger Mike Morgan, warning him in a recent cease-and-desist letter that he may face legal action if he does not close down his website.According to Chadbourne & Parke’s letter, dated April 8, the bank is rattled because the site “violates several of Goldman Sachs’ intellectual property rights” and also “implies a relationship” with the bank itself.Unsurprisingly for a man who has conjoined the bank’s name with the Number of the Beast – although he jokingly points out that 666 was also the S&P500′s bear-market bottom – Mr Morgan is unlikely to go down without a fight. He claims he has followed all legal requirements to own and operate the website – and that the header of the site clearly states that the content has not been approved by the bank.On a special section of his blog entitled “Goldman Sachs vs Mike Morgan” he predicts that the fight will probably end up in court.”It’s just another example of how a bully like Goldman Sachs tries to throw their weight around,” he writes.” (UK Telegraph)Morgan agreed to answer a few questions about Goldman Sachs, the TARP and the ongoing financial crisis.Mike Whitney: Is Goldman Sachs trying to shut down your web site?Mike Morgan: YesMW: Why?Morgan: The legal answer to that would be . . . you need to ask them the question. I would think it is because we are exposing the truth . . . and the truth hurts.MW: Have you libeled them or published privileged information?Mike Morgan: No.MW: Could you tell us something about yourself so that readers can trust your criticism of G-Sax?Morgan: I am 53 years old and believe all of the answers for how we should live are in the Bible…God gave David the choice of paying the consequences at the hands of David’s enemies or at the hand of God. David chose God’s consequences. Hank Paulson and the thousands of wicked men like him deserve the wrath of the millions of lives they have destroyed. We must go after the crooks and make them pay the consequences for their greed and the total disregard for anyone other than themselves. We need to start with Hank Paulson, who as CEO of Goldman Sachs, was more responsible than any 10 men combined, for the violent Depression we are about to enter.MW: Why was G-Sax given $10 billion out of the TARP funds before federal regulators checked their books to see if they were solvent?Morgan: Because King Henry (Henry Paulson) said so. As former CEO of Goldman Sachs, the last thing he wanted to see was a collapse of Goldman Sachs. And as Treasury Secretary with a big stick, he could do whatever he pleased . . . and he did.MW: It was widely believed that most of the five biggest investment banks were leveraged 30 to 1. If that’s the case, then G-Sax probably would not have survived the downturn in the market without government assistance. Do you agree with this analysis?Morgan: I agree.MW: After Bear Stearns and Lehman Bros. defaulted, Merrill Lynch quickly sold out to Bank of America.Morgan: Merrill was being run by John Thain, the former Goldman Sachs executive that helped Hank Paulson force out Jon Corzine who at the time was c–CEO with Paulson.MW: That left Goldman Sachs and Morgan Stanley as the next likely candidates to be taken down by short sellers.Morgan: Short seller are not the issue. If short sellers drive down a stock below market value, then it becomes an opportunity for anyone that thinks the stock is a buy to bury the shorts.MW: This is when SEC chief Christopher Cox–who had never intervened in the market prior to this–put emergency rules in place to stop the short selling of financial institutions. What was Cox’s action all about?Morgan: The SEC is toothless and I still don’t know why Cox is not in jail. He not only looked the other way on the Madoff issue, but since he left, the SEC has gone after more than a dozen scams. Are you going to tell me everything was fine three months ago on Chrissy Cox’s watch? No, but I can tell you there is much more to this story….As for the SEC and short sellers, that was King Henry. Period. Full Stop.MW: Was this mainly an attempt by Washington elites to pull G-Sax’s bacon out of the fire?Morgan: Goldman Sachs and other companies affiliated with Goldman Sachs. Kinda like the old MCI Friends and Family Program.MW: Recently it was revealed that G-Sax had been paid more than $12 billion for credit default swaps (CDS) it held with insurance giant AIG. Financial institutions that buy these CDS know that they are accepting additional risk because they are unregulated and outside government oversight. That said, Treasury’s payoff to G-Sax on these CDS was equivalent to paying off a gambler’s losses at the race track. Why was G-Sax compensated for their CDS; why was it kept secret; and who authorized it?Morgan: King Henry and his loyal lieutenant Neil Kashkari. Most people don’t realize, Neil Kashkari was King Henry’s lieutenant at Goldman Sachs. Neil is 35 years old with little experience other than being a very private executive assistant to King Henry when he was CEO of Goldman. Let’s ask ourselves . . . why exactly is Kashkari still on the job? Easy answer . . . because our President and Chris Dodd were both bought with Goldman Sachs’ money. These two men have received more money from Wall Street than any politician in the history of the United States. By the way, Obama was only around for two years, while Dodd was there for more than a decade. Obama received more money from Wall Street in two years than Dodd did in a decade.MW: What is the nature of the relationship between G-Sax and the political establishment in Washington?Morgan: If I answered that question I would need to increase the thickness of my Kevlar body suit.MW: Why is Treasury a revolving door for investment bankers that are tied to Wall Street?Morgan: Because the American public allows it. Benjamin Franklin said . . . Well done is better than well said. Too many Americans gripe and moan, but when it comes time to doing anything . . . they sit back on the couch with a bag of chips and the TV. We think it is cute to use the TV to amuse our toddlers. Do you think it is any different for 75 per cent of the American public?MW: Are special interest groups dictating policy in the Obama White House?Morgan: I can’t count that high. But if you just look at Wall Street and where the money came from, you will realize that Barack Hussein Obama is nothing more than a puppet of Wall Street.MW: an article which appeared in The Atlantic Monthly, a former chief economist of the IMF, Simon Johnson, had this to say:”The crash has laid bare many unpleasant truths about the United States… recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression we’re running out of time.”Do you agree with Johnson that banks have a stranglehold on the political process and that “we are running out of time”? If so, how do we go about removing these people from office and replacing them with people who will operate in the public’s interest?Morgan: First, I think guys like Simon Johnson are the guys that should be running the show. Simon along with William Black, Elizabeth Warren and Ron Paul. There are more, but if we had that trio at the helm, we’d be moving to a world of light, instead of a world of deep, violent darkness.As to your question about how to remove these people from office, I believe it will be very violent . . . and very well deserved. We are two Biblical generations removed from the Great Depression of 1929. In 1969 we had race riots. We lost a true leader when we lost Martin Luther King, and the country paid the consequences. Here we are 40 years later . . . a Biblical generation, as we enter what I believe will be a period of violence beginning this summer. When you can’t feed your kids, and the folks at Goldman Sachs are sitting around the pool sipping cocktails and munching on snacks . . . that’s when those without go after those with.The problem now is very simply . . . companies like Goldman Sachs created a financial system that was double stacked. One, they skimmed trillions of dollars out of our pension fund and other fiduciary money under their management. Two, like drug dealers they provided very creative financing to hundreds of millions of people around the world . . . which those folks can no longer afford to pay back. But the boys and girls and Goldman Sachs have already walked off with the money, leaving the people that bought the debt with little more than a piece of paper . . . and those that owe the debt, with the inability to ever pay it back.MW: Will you fight Goldman in court?Morgan: Yes. I’m prepared to fight them with several attorneys and law professors that are anxious to take this one on. I hope they do press the issue in court, but I kinda doubt it.By Mike WhitneyEmail: fergiewhitney@msn.comMike is a well respected freelance writer living in Washington state, interested in politics and economics from a libertarian perspective.

Nice Charts on housing and Stock bubbles… Esepcially good info on California housing… We still have a long way to go out here in this pathetic State of Calif… Which seems like Ground Zero for all the housing problems…http://www.oftwominds.com/blogapr09/housing04-09.html

Must Read if you live in Calif… Have at it PETE CA…http://www2.macleans.ca/2009/04/15/on-the-front-lines-of-america%e2%80%99s-meltdown/2/

This is the issue that will start to take down local banks…Las Vegas braces for commercial foreclosuresThe problem is starting to gain national attention with suggestions that it could rival or exceed the commercial real estate slump in the early 1990s that was triggered by the savings and loan crisis. That helped drag the economy into a recession.The Wall Street Journal reported banks could suffer as much as $250 billion in commercial real estate losses and 700 banks could fail because of that exposure.http://www.lasvegassun.com/news/2009/apr/17/lv-braces-commercial-foreclosures/

Absolutely. Reality has never stopped these people. But the economy may.

Stiglitz Says White House Ties to Wall Street Doom Bank RescueBy Michael McKee and Matthew BenjaminApril 17 (Bloomberg) — The Obama administration’s bank- rescue efforts will probably fail because the programs have been designed to help Wall Street rather than create a viable financial system, Nobel Prize-winning economist Joseph Stiglitz said.“All the ingredients they have so far are weak, and there are several missing ingredients,” Stiglitz said in an interview yesterday. The people who designed the plans are “either in the pocket of the banks or they’re incompetent.”The Troubled Asset Relief Program, or TARP, isn’t large enough to recapitalize the banking system, and the administration hasn’t been direct in addressing that shortfall, he said. Stiglitz said there are conflicts of interest at the White House because some of Obama’s advisers have close ties to Wall Street.“We don’t have enough money, they don’t want to go back to Congress, and they don’t want to do it in an open way and they don’t want to get control” of the banks, a set of constraints that will guarantee failure, Stiglitz said.The return to taxpayers from the TARP is as low as 25 cents on the dollar, he said. “The bank restructuring has been an absolute mess.”Rather than continually buying small stakes in banks, weaker banks should be put through a receivership where the shareholders of the banks are wiped out and the bondholders become the shareholders, using taxpayer money to keep the institutions functioning, he said.Nobel PrizeStiglitz, 66, won the Nobel in 2001 for showing that markets are inefficient when all parties in a transaction don’t have equal access to critical information, which is most of the time. His work is cited in more economic papers than that of any of his peers, according to a February ranking by Research Papers in Economics, an international database.The Public-Private Investment Program, PPIP, designed to buy bad assets from banks, “is a really bad program,” Stiglitz said. It won’t accomplish the administration’s goal of establishing a price for illiquid assets clogging banks’ balance sheets, and instead will enrich investors while sticking taxpayers with huge losses.“You’re really bailing out the shareholders and the bondholders,” he said. “Some of the people likely to be involved in this, like Pimco, are big bondholders,” he said, referring to Pacific Investment Management Co., a bond investment firm in Newport Beach, California.Bigger LossesStiglitz said taxpayer losses are likely to be much larger than bank profits from the PPIP program even though Federal Deposit Insurance Corp. Chairman Sheila Bair has said the agency expects no losses.“The statement from Sheila Bair that there’s no risk is absurd,” he said, because losses from the PPIP will be borne by the FDIC, which is funded by member banks.“We’re going to be asking all the banks, including presumably some healthy banks, to pay for the losses of the bad banks,” Stiglitz said. “It’s a real redistribution and a tax on all American savers.”Stiglitz was also concerned about the links between White House advisers and Wall Street. Hedge fund D.E. Shaw & Co. paid National Economic Council Director Lawrence Summers, a managing director of the firm, more than $5 million in salary and other compensation in the 16 months before he joined the administration. Treasury Secretary Timothy Geithner was president of the New York Federal Reserve Bank.‘Revolving Door’“America has had a revolving door. People go from Wall Street to Treasury and back to Wall Street,” he said. “Even if there is no quid pro quo, that is not the issue. The issue is the mindset.”Stiglitz was head of the White House’s Council of Economic Advisers under President Bill Clinton before serving from 1997 to 2000 as chief economist at the World Bank. He resigned from that post in 2000 after repeatedly clashing with the White House over economic policies it supported at the International Monetary Fund. He is now a professor at Columbia University.Stiglitz was also critical of Obama’s other economic rescue programs.He called the $787 billion stimulus program necessary but “flawed” because too much spending comes after 2009, and because it devotes too much of the money to tax cuts “which aren’t likely to work very effectively.”“It’s really a peculiar policy, I think,” he said.Plan DeficientThe $75 billion mortgage relief program, meanwhile, doesn’t do enough to help Americans who can’t afford to make their monthly payments, he said. It doesn’t reduce principal, doesn’t make changes in bankruptcy law that would help people work out debts, and doesn’t change the incentive to simply stop making payments once a mortgage is greater than the value of a house.Stiglitz said the Fed, while it’s done almost all it can to bring the country back from the worst recession since 1982, can’t revive the economy on its own.Relying on low interest rates to help put a floor under housing prices is a variation on the policies that created the housing bubble in the first place, Stiglitz said.“This is a strategy trying to recreate that bubble,” he said. “That’s not likely to provide a long run solution. It’s a solution that says let’s kick the can down the road a little bit.”While the strategy might put a floor under housing prices, it won’t do anything to speed the recovery, he said. “It’s a recipe for Japanese-style malaise.”To contact the reporter on this story: Michael McKee in New York at mmckee@bloomberg.net; Matthew Benjamin in Washington at

Like i said look at gold

from what I hear, *your* mattress is anything BUT safe… <snicker, snicker>sorry, the 14 year old in me couldn’t help it…

Think there’s a pretty good argument that CA economy winds up in its own depression, even if not all parts of the USA are hit quite as hard (Michigan, Ohio, Las Vegas, East Coast and Florida are also hammered). Hard to believe that people paid enormous prices for McMansions in a place like Merced, CA. How are they going to make any $$ in salaries now to pay these things off??? Goes to show how far and deep the insanity ran.PeteCA

traffic here has been slow for the past 2-3 daysi think a lot of people are busy waiting for “something” to foldcapitulation n celebration

Sell in May and go away, combined with deflationary forces may really take its toll on those with long positions. I shorted gold yesterday morning.hlowe

Unfortunately, Morbid, these irrational actors are also amoral. There is no such thing as right and wrong from their perspective, there is only what serves their narrow interests – all else is irrelevant.

http://en.wikipedia.org/wiki/Paul_Warburghttp://en.wikipedia.org/wiki/History_of_central_banking_in_the_United_States

In the above Whitney article he mentions several people that should be in charge of helping us see through this mess, I’d add Chuck Spinney to this list (along with Chalmers Johnson and Chris Hedges):Wall Street and the PentagonMark