I think we should be held to higher standards than just proclaiming “First.”1/2How about (-1) ?

from the previous thread (and this will be the last post on this issue from me)In recent months, Roubini has secured the position as the official Dr. Doom for a wider audience such that he has become the embodiment of the worst case scenario for the MSM. Accordingly, prescriptions he offers to cure America’s (the world’s) economic ailments carry a great deal of influence, particularly among those with bearish tendencies.In his current New York Times OP-ED he concludes with this prescription to save the dollar and America’s economy:”This will entail investing in our crumbling infrastructure, alternative and renewable resources and productive human capital — rather than in unnecessary housing and toxic financial innovation. This will be the only way to slow down the decline of the dollar, and sustain our influence in global affairs.”I must admit that I continue to be troubled by the apparent conflict of interest that the professor had (has) with his non-disclosed business relationship with Larry Summers who was a part owner and paid advisor of RGE up until this past December.As I read/listen to Roubini’s prescription to save the economy it strikes me as very similar to what the administration and Larry Summers have been saying.It would be nice if the professor would comment on why the Summers business relationship was not disclosed or better still, point to where it was disclosed.Summers’ White House Disclosure

We are about to implode out here… read between the lines… massive cuts and layoffs coming no matter what… Calif unemployment already over 12%…California Asks For TARP BailoutYou knew this was coming.There have been various ideas floated for how the federal government can bail out the state of California. Some of it’s already happening via money coming in through the stimulus. And a plan to backstop the entire muni market would be a (not so subtle) backdoor bailout of California, if it happens.And now the state is just directly asking to be part of TARP.MarketWatch: In a letter, Lockyer asked Geithner for TARP assistance for California and “other financially strapped states and local governments which face a severe cash flow crunch.”"If we cannot obtain our usual short-term cash-flow borrowings, there could be devastating impacts on the ability of the State or other governments to provide essential services to their citizens,” Lockyer wrote.In particular, Lockyer cited fire and police protection, education and social services.See Tim? If you deny them TARP, there will be more crime, less educated children and more people will die in fires.Getting TARP cash may actually be the state’s best shot at getting a bailout. If they actually had to get a law passed by Congress, there’s no way the non-California Congressmen would support it. But TARP — despite being a program to buy toxic assets from banks (ha!) — has morphed into a program that’s basically anything the Treasury sectretary and the President want. PPIP, cars, insurance companies, you name it. So why not states?

Free Tibet said this morn (on previous thread):The thought of monetary crisis is becoming more mainstream. Our professor now reflects on the possibility of a loss of reserve currency status for the dollar. Though he seems to make the same assumption that every economist seems to make; that the dollar can’t lose it’s reserve status until some other currency is prepared to bear that load and he doesn’t see that happening for the RMB for a decade. His friend Mohamed El-Erian wrote similarly in his book published last summer.Also from:Fiscal Meltdown Will Test the Bond and the Dollar to the Breaking PointRegarding US budget:”Outlays are rising at 17% YOY the fastest nominal pace since late 1981. With receipts falling 14.6% YOY their fastest drop in at least 40 years the gap between their growth rates is also the widest in the record.All these rates are accelerating and are threatening to push the deficit to more than 50% of receipts and – at $1.1 trillion and rising – to more than 10% of private GDP.”I can’t imagine we might still have a decade to get things fixed. And I don’t see how we can get things fixed in a generation. So, that would imply that things come apart before there is a replacement.What does that world look like? What does the world look like without a reserve currency? The last time I brought this up London Banker called me nuts. Well, it looks like barter economies to me. Can we even contemplate that? I can’t. It’s beyond my imagination.The question is, where do you want to be? Gold, professor’s “barbaric relic”? Not me. I want real goods. Tangible value. Or, at a minimum tradable skills. Not “credits” from some destined to fail institution. How do I get there?

Dr. Roubini in today’s N.Y. Times article, “The Almighty Renminbi?”, provides a clean roadmap for protection of the dollar as the world’s reserve currency. As well, his outline, if followed, would turn the direction of our economy back toward real growth, real assets and real value…not bubbles and borrowing.It’s important to remember that the dollar achieved reserve status in part because of the dependability and trustful status of the American nation, its record of repayment, its innovation and growth, and its commitment to open markets. This standard urgently needs repair and support. Here’s my favorite paragraph from the professor’s article:“This decline of the dollar might take more than a decade, but it could happen even sooner if we do not get our financial house in order. The United States must rein in spending and borrowing, and pursue growth that is not based on asset and credit bubbles. For the last two decades America has been spending more than its income, increasing its foreign liabilities and amassing debts that have become unsustainable. A system where the dollar was the major global currency allowed us to prolong reckless borrowing.”

There’s a difference between I’m in contact with the administration – ‘no strings attached’ AND Summers is invested in my venture.we all know how to read between the lines. It’s just easier when there is TRANSPARANCY.Roubini’s the best but now we know a little better where he is coming from.

Roubini mentions inflation in his first video. That is not in keeping with his previous assertions that deflation would be the issue. I wonder if he has changed course here or is referring to a period that is a few years out.

Not sure what to think about some of what he says, or about Elliott Wave theory in general, but this is interesting.Here are a couple of excerpts from http://uk.reuters.com/article/companyNewsMolt/idUKTRE54D4IL20090514“Longtime technical analyst Robert Prechter, who forecast the 1987 stock market crash, predicted this week that U.S. equities may plunge to half their lows hit in March as a deflationary depression bites.”….”The Treasury (Department) has taken on so much bad debt” at a time tax receipts are falling, that “there will be a slow, but very steady change in the way people will view the U.S. government,” said Prechter. As a result, investors in Treasury notes and bonds will ultimately demand higher yields, he said.

CALIFORNIA IIWashington State is just like California too. 2500 teacher layoffs, local governments taking 5-10% pay our time cuts. I remember a year or two ago the teachers (nurses too) were smug about over-growth keeping them in jobs. LOL, where’s the pro-growth clamor now? At the soup lines?The hospital rooms are more empty now too as people put off operations, like empty restaurant booths. Layoffs at hospitals already implemented.Have you bloggers noticed the Stimulus Money is just trickling in, except for disabled critical services…..makes you wonder if the $1 trillion emergency budgets are just phony paper promises , with no real federal money [or money availability] left in back of them, maybe I’m paranoid….LOL

America was the economic engine of the world after WWII—with 50 percent of the world’s GNP. She now garners about 21 percent of world GDP. Roubini makes the point that 10 years from now if people are buying and selling with China in its own currency, the renminbi could be a possible rival to the dollar.The dollar has fallen on bad times; we don’t have the manufacturing base we once had and there is some question about the future of our financial system. After all, our money is fiat currency—it is not sound money currency. It fluctuates up and down, of course, but its true value is unknown. Its “true value” is what the Federal Reserve, a cartel of bankers, says it is. If you have to trust the dollar, you have to trust the Federal Reserve, and believe me, that trust is fading. It turns out that the world is not dealing with the United States government, with this great super power, with this shining city on a hill. No. It’s dealing with this private holding bank, Goldman Sachs, which operates through its mouthpiece, the Federal Reserve.What it boils down to is that America used to be a nation backing a currency, and now it’s a group of men whose identities are secret. Who are they, what do they own in the world, to whom do they give their allegiance? We don’t know. And their performance lately shows that even in our wildest suspicions we could not have imagined their criminality to be so bad, that they are so crooked. They are the ones who are saying what the dollar should do and be, and determining its value thereof in you pocket.What I’m saying is that, ten years now, what’s the difference between them and Wen Jiabao or Hu Jintao of the Communist Party of China?Which brings to mind a quote from Flatman on 2009-05-08 07:12:36: “Real resources YES. Real Labor NO. Real Products (only as a piece of tangible matter). The labor in China would be considered criminal in the U.S. and the products are inferior, one-time use dollar store quality. Before people make positive statements about China they should read the “International Herald Tribune” and visit web sites like “Asia Times”. They steal and sell children for as low as $2500.00. Capitalism in China is an illusion. China is like one huge sleeper cell. The caution flag should remain out at all times with these bullies and criminals. Contracts in China are not worth the paper they are written on. The popularity of investing in China reminds me of the “Jet Setters” and Mod clothing of the sixties (just a short lived passing fad). The social and political risk associated with the promotion of China is severely understated. A society with true democratic ideals would have nothing to do with growing the economy of China. It was greed that got us into our current financial situation and it will be greed that catches us asleep at the switch when the Chinamen say ” So sorry! Game over!”The price of liberty was said to be “eternal vigilance.” Perhaps it was just too high a price for the American people to pay.

What is with California? I heard yesterday that they have thousands of farm workers just sitting idle and in food lines because they cut off water (of which there is plenty) to help protect a fish? It may be the 8th largest economy in the world but I’d be willing to give it back to Mexico for a few pesos if they promised to take all the politicians with them.

WHO RULES AMERICA? By Paul Craig RobertsMay 13, 2009 — What do you suppose it is like to be elected president of the United States only to find that your power is restricted to the service of powerful interest groups?A president who does a good job for the ruling interest groups is paid off with remunerative corporate directorships, outrageous speaking fees, and a lucrative book contract. If he is young when he assumes office, like Bill Clinton and Obama, it means a long life of luxurious leisure. Fighting the special interests doesn’t pay and doesn’t succeed.On April 30 the primacy of special over public interests was demonstrated yet again. The Democrats’ bill to prevent 1.7 million mortgage foreclosures and, thus, preserve $300 billion in home equity by permitting homeowners to renegotiate their mortgages, was defeated in the Senate, despite the 60-vote majority of the Democrats. The banksters were able to defeat the bill 51 to 45.These are the same financial gangsters whose unbridled greed and utter irresponsibility have wiped out half of Americans’ retirement savings, sent the economy into a deep hole, and threatened the US dollar’s reserve currency role. It is difficult to imagine an interest group with a more damaged reputation. Yet, a majority of “the people’s representatives” voted as the discredited banksters instructed.Hundreds of billions of public dollars have gone to bail out the banksters, but when some Democrats tried to get the Senate to do a mite for homeowners, the US Senate stuck with the banks. The Senate’s motto is: “Hundreds of billions for the banksters, not a dime for homeowners.”If Obama was naive about well-intentioned change before the vote, he no longer has this political handicap.Democratic Majority Whip Dick Durbin acknowledged the voters’ defeat by the discredited banksters. The banks, Durbin said, “frankly own the place”.It is not difficult to understand why. Among those who defeated the homeowners bill are senators Jon Tester (Mont), Max Baucus (Mont), Blanche Lincoln (Ark), Ben Nelson (Neb), Many Landrieu (La), Tim Johnson (SD), and Arlan Specter (Pa). According to reports, the banksters have poured a half million dollars into Tester’s campaign funds. Baucus has received $3.5 million; Lincoln $1.3 million; Nelson $1.4 million; Landrieu $2 million; Johnson $2.5 million; Specter $4.5 million.The same Congress that can’t find a dime for homeowners or health care appropriates hundreds of billions of dollars for the military/security complex. The week after the Senate foreclosed on American homeowners, the Obama “change” administration asked Congress for an additional $61 billion dollars for the neoconservatives’ war in Iraq and $65 billion more for the neoconservatives’ war in Afghanistan. Congress greeted this request with a rousing “Yes we can!”The additional $126 billion comes on top of the $533.7 billion “defense” budget for this year. The $660 billion–probably a low-ball number–is ten times the military spending of China, the second most powerful country in the world.How is it possible that “the world’s only superpower” is threatened by the likes of Iraq and Afghanistan? How can the US be a superpower if it is threatened by countries that have no military capability other than a guerilla capability to resist invaders?These “wars” are a hoax designed to enrich the US armaments industry and to infuse the “security forces” with police powers over American citizenry.Not a dime to prevent millions of Americans from losing their homes, but hundreds of billions of dollars to murder Muslim women and children and to create millions of refugees, many of whom will either sign up with insurgents or end up as the next wave of immigrants into America.This is the way the American government works. And it thinks it is a “city on the hill, a light unto the world”.Americans elected Obama because he said he would end the gratuitous criminal wars of the Bush brownshirts, wars that have destroyed America’s reputation and financial solvency and serve no public interest. But once in office Obama found that he was ruled by the military/security complex. War is not being ended, merely transferred from the unpopular war in Iraq to the more popular war in Afghanistan. Meanwhile, Obama, in violation of Pakistan’s sovereignty, continues to attack “targets” in Pakistan. In place of a war in Iraq, the military/security complex now has two wars going in much more difficult circumstances.Viewing the promotion gravy train that results from decades of warfare, the US officer corps has responded to the “challenge to American security” from the Taliban. “We have to kill them over there before they come over here.” No member of the US government or its numerous well-paid agents has ever explained how the Taliban, which is focused on Afghanistan, could ever get to America. Yet this hyped fear is sufficient for the public to support the continuing enrichment of the military/security complex, while American homes are foreclosed by the banksters who have destroyed the retirement prospects of the US population.According to Pentagon budget documents, by next year the cost of the war against Afghanistan will exceed the cost of the war against Iraq. According to a Nobel prize-winning economist and a budget expert at Harvard University, the war against Iraq has cost the American taxpayers $3 trillion, that is, $3,000 billion in out-of-pocket and already incurred future costs, such as caring for veterans.If the Pentagon is correct, then by next year the US government will have squandered $6 trillion dollars on two wars, the only purpose of which is to enrich the munitions manufacturers and the “security” bureaucracy.The human and social costs are dramatic as well and not only for the Iraqi, Afghan, and Pakistani populations ravaged by American bombs. Dahr Jamail reports that US Army psychiatrists have concluded that by their third deployment, 30 percent of American troops are mental wrecks. Among the costs that reverberate across generations of Americans are elevated rates of suicide, unemployment, divorce, child and spousal abuse, drug and alcohol addiction, homelessness and incarceration.In the Afghan “desert of death” the Obama administration is constructing a giant military base. Why? What does the internal politics of Afghanistan have to do with the US?What is this enormous waste of resources that America does not have accomplishing—besides enriching the American munitions industry?China and to some extent India are the rising powers in the world. Russia, the largest country on earth, is armed with a nuclear arsenal as terrifying as the American one. The US dollar’s role as reserve currency, the most important source of American power, is undermined by the budget deficits that result from the munitions corporations’ wars and the bankster bailouts.Why is the US making itself impotent fighting wars that have nothing whatsoever to do with is security, wars that are, in fact, threatening its security?The answer is that the military/security lobby, the financial gangsters, and AIPAC rule. The American people be damned.Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal.http://www.vdare.com/roberts/090513_america.htm

Well I’ll just be difficult here.(1/2)^-1Darn integers.

This is a FASCINATING interactive map that shows job creation/loss from 2004-present.You’ve got to see it…http://tipstrategies.com/archive/geography-of-jobs/

Bingo!

If I was a pension fund manager in America right now … I’d be packing my bags and staring at maps of small tropical islands in the Pacific. These folks are stading right in the firing lines.PeteCA

This man knows what’s going on! Isn’t it amazing how our govt has essentially UNLIMITED resources for war and the bailout of financial elites, but NEVER ENOUGH for healthcare, education, infrastructure, living wages and of course, as Robert’s states “not a dime for homeowners facing foreclosure”! Is this a democracy?!

Nope. ‘Democracy’ is merely the mask, the publicized persona, of the US. As everyone knows, words are meaningless–actions speak louder.

“If this thing carries on, my generation will have to work until they are 75,” the 58-year-old Rupert said. Governments are “going to have to find the capital in the markets, which will crowd out the private sector, or they’re going to have to tax the living hell out of consumers, or inflate their liabilities to oblivion. There are not too many other options.”Well said, but it will probably be all three at the same time. Why not, are they mutually incompatible?

e,wish i didn’t see it.

It’s always fun to read their bulletins but not so fun that I would want to pay the 200 euro subscription price ($1000–just kidding). I would be interested in what they have to say about the “gold paradox”. However, I suspect I would be disappointed. Check out Dr. Cosa’s comments over on Caracommunity.com for intelligent perspective on gold. He’s been adamant about pooh-poohing all the “China’s been buying gold” nonsense as well as all those gold bugs who didn’t see the collapse in gold stocks coming but who now “wisely” recommend investing in same based on the “certainty” of hyperinflation. Gold brings out the miser in all of us, but I remember owning some just after the big run up in the 80′s when it was priced at $400 per oz. Doesn’t seem like its annualized increase since that time has been all that impressive. $400 to $900 in 30 years=2.7% per year with annual compounding. That’s less than inflation. So is gold the way to protect your wealth under inflation? On the other hand, gold equities are leveraged to the gold price, so you could play those for some respectable returns.Seriously, we should have a discussion about how to protect our meager assets from a declining dollar. MM CA expects it to drop by 50% by December 09. Are people on this blog just going to ride it down without doing anything?

Wow, did you see the heaters those kids was packin?

Pecos,You should take a good look around and identify anything that has a)held it’s value like Gold in the last decade and b)has risen against the dcelining dollar like Gold.If you do find anything, please share it with us as we will gladly consider investing in it I am certain.The moral to your narrative is not that Gold is useless as an investment. It is that buy and hold is an absurd proposition in our current environment. And our current environment is the toxic entity you and we all need protection from.Let’s change the mission to: Let’s find something better than Gold for wealth protection. The time limit is 1 week- should be enough to research it?

LB,”The failure is on the part of financial intermediaries to identify productive uses when confronted with that windfall.”I don’t think so, you can’t get away with that. We both know that these intermediaries never even tried to find productive uses for that capital. Instead preferring to use it to lever up and play casino with banks and derivatives- so much more profitable. Which I think raises the contention that globalization was a policy borne of amassing enormous profits from the fleecing of the developed world middle class. The slow milking of that wealth was supplanted by Bank issued debt. It is the biggest transfer of wealth in human history.What is happening now is that the curtain has been somewhat drawn back on that and we see the great big hole in place of where that wealth once was. And, it’s NOT going to be filled inside a generation.The realization of that is the impact yet to felt. I’m not ruling out major political upheavels all accross the OECD as this epiphany gathers pace. There will be many unintended consequences.

Not only has an individual federal judge from time to time overruled votes by California residents seeking to stop the hemorrhaging of tax money to support illegal aliens, now the Obama Administration is joining in the punishment. Of Barack Obama’s $3.5 trillion budget proposal, a tiny percentage of the $17 billion that he hopes to cut in 121 programs concerns the $400 million of the federal government’s miniscule reimbursement to California, New York, and Florida to help them pay for the costs of keeping illegal immigrants who commit crimes in jail.Diane Feinstein, always the fence walker when elections are at stake (who may be running for governor or may be not), is opposing the cut, much as her other Democrat colleagues around the country are opposing the rest of the $17 billion in cuts..http://www.upi.com/news/issueoftheday/2009/05/07/Obama-to-cut-17B-from-35-trillion-budget/UPI-34861241706574/

I’m with you, Free Tibet. I’m looking for tangibles. The government is heading into bankruptcy, and we’ve got irresponsible profligates running the household, the same as in California. As Henry Hazlitt said of anticapitalistic politicians, “At the same time that they encourage more consumer spending they pile up further disincentives and penalties in the way of saving and investment [zero interest rates with high inflation?].”Can you imagine running your life this way?The result, wrote Hazlitt in 1978, “is that for the first time in history, no nation is on a metallic standard, and practically every nation is swindling its own people by printing a chronically depreciating paper currency.”Greenspan and Bernanke refined that swindle into an art of devastating contracting and expanding bubbles and a $13 trillion alphabet soup of TARP, TLGP and such ilk that equals the “value thereof” of the entire nation’s gross domestic product output. That’s inflation! Not only that, but Bernanke enticed or forced the other nations of the world to join in. Can you imagine the manmade calamity that awaits? Well, yes, I guess you can.Although Hazlitt saw the outlook then as dark, he still had hopes because, as he said, he detected that “more and more people [were] becoming aware that government has nothing to give them without first taking it away from somebody else—or from themselves.”Well, Hazlitt’s hope that public policy would be reversed did not happen and his fear that the “damage from existing measures and trends would become irreparable” has occurred.Perhaps this blog will become a source of information for the best and safest in tangible value. On, as you say, how to get there.

@ GuestI’m pleased to report my project advancing at a fair clip, but I fear not fast enough to mitigate the approaching financial cataclysm. I’m trying to engineer in sufficient flexibility to withstand sudden shocks.Mother Nature teaches that a spider web of tiny, flexible filaments, well distributed, is stronger than a single thread when absorbing a sudden impact. By allowing banks to aggregate into uncontrollable global behemoths, our governments and central bankers have institutionalised assured financial collapse. Mega banks all following the same policies of executive wealth capture cannot absorb or spread shocks.

@ GuestI’m pleased to report my project advancing at a fair clip, but I fear not fast enough to mitigate the approaching financial cataclysm. I’m trying to engineer in sufficient flexibility to withstand sudden shocks.Mother Nature teaches that a spider web of tiny, flexible filaments, well distributed, is stronger than a single thread when absorbing a sudden impact. By allowing banks to aggregate into uncontrollable global behemoths, our governments and central bankers have institutionalised assured financial collapse. Mega banks all following the same policies of executive wealth capture cannot absorb or spread shocks.Hide reply Reply to this comment By London Banker on 2009-05-15 01:11:45Can you give us more detail into the approaching cataclysm?

I’m still betting on massive destructive deflation, leading to social unrest and instability. Very little of the $12 trillion siphoned from future taxpayers to make this year’s Wall Street bonuses and dividends will filter down to Main Street. States and cities are seeing the Treasury suck all the oxygen out of bond markets, leaving too little for them to meet their bloated liabilities. And in the meanwhile all the pensions and assets relied upon by those who laboured for a living will hold little liquidation value as baby boomers retire.46 cents of every dollar spent by the US government in 2009 will be borrowed. Most of every dollar spent by the US government will go to the corrupt military, intelligence, anti-healthcare and banking sector – and so will not yield a productive return to aid repayment of those dollars.Even the Chinese are starting to do the math and looking worried. I don’t know when the game will be up, but I’m pretty sure it will be sudden and devastating when it is. The nearest parallel would be the sudden implosion of the Soviet Union – from global military and political superpower to pathetic, corrupt, failed state in just a few months. I hope for better things from Americans, but they will have to work hard to regain any control over their government, and the rot goes so deep.Obama’s capitulation to the banksters and the military-intelligence complex foreshadows deepening crisis. I’m guessing he wasn’t given a choice, and I predicted a while back that he would prove to be America’s Tony Blair, but even so it is disappointing. More war, more war crimes, more torture, more unConstitutional accretion of unreviewable executive and military power.If I had to put money in one investment, it would have to farmland in the Netherlands.

That was quite a post, LB! One could say you are not optimistic about the US in the near future (next 25 years?). However, I’m not sure I understand how we would have deflation. I realize that Japan did quantitative easing and ended up with deflation anyway, but inflation would seem to be the most likely outcome of our situation. It certainly works to the advantage of debtors, including the US foreign debt. Since we have the world’s reserve currency, we simply debase the dollar and poof!, all our foreign debts are wiped out. I kind of thought this was the plan.Concerning setting the US aright, I don’t think it will happen. The power holders are too entrenched. In Russia, effectively, Putin is a dictator and he dishes out the largess to himself and his buddies at the KGB. An economic collapse will most likely entrench the current power holders (GS, JPM) even more. We will see WWIII before any real change in the power structure occurs. Most likely war with our main PNAC opponent, the Chinese. If they attack our currency, we can simply cut off their oil supply. We control the straits of Malacca, Hormuz and the South China Sea. It’s a no-brainer. It’s almost guaranteed that China will go down before the US does.It would seem that TIPs would be the best investment to hold long at this point. Possibly gold to hedge a falling dollar and otherwise selling short via inverse ETFs. I hope we hear more from you.

hearkens back to one LB’s final blog entries – well worth re-readinghttp://londonbanker.blogspot.com/2008/11/change-i-cant-quite-believe-in.htmlan excerpt:”The rumours that either Larry Summers or Tim Geithner will be made Treasury Secretary made me even queasier. The appointment of either of these architects of the current global financial disaster, these arch-deregulators and serial-forbearance artists, would be a great middle-finger to America’s foreign creditors and the global investors suffering asset deflation. Both men have been instrumental in, first, the Fed’s exported inflation via massive monetary bubble-blowing and, now, the Fed/FDIC/SIPC exported deflation through Chapter 11 and margin call orchestrations ensuring more pain abroad than at home.Summers would be particularly egregious. Not only did Summers promote the Friedmanite export of toxic debt to the rest of the world at the Clinton Treasury, at the World Bank he promoted the export of toxic pollution to underdeveloped nations to add poison to poverty. To quote from his 1991 memo, “I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.”and also LB’s final post on deflationFriday, 12 December 2008Deflation has become inevitablehttp://londonbanker.blogspot.com/2008/12/deflation-has-become-inevitable.html

MUST SEE video on c-span.org of today’s guest Michael Greenberger, Univ of Maryland, discussing financial derivatives including: the “bets made in an unregulated casino that mortgages would fail”, who is really receiving the bailout money (100% on the dollar), AIG’s key involvement and Obama’s new regulations to bring more transparency to this market. This will make your blood boil!

Pecos, you have overlooked the agreement made a couple of months ago between Russia and China on oil. As they are both on the same landmass, I don’t see how the US could disrupt supply.You seem to be implying that its alright for the US to use military force in the absence of its ability to pay its debts to the rest of the world. Is that really your position?

link not working…?

Interesting take on the professor’s NYT article from the Telegraph”China’s yuan ‘set to usurp US dollar’ as world’s reserve currency”http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5325805/Chinas-yuan-set-to-usurp-US-dollar-as-worlds-reserve-currency.html

Lord of the Flies

Plongka 10, No I do not support using military force offensively at all. I think the military is a bloated, self-perpetuating entity that needs war the way people need exercise. They need to try out new weapons systems in real life, try new strategies, etc. I was listening to an NPR broadcast the other day with an expert or two discussing our military strategy in Afganistan/Pakistan. No discussion at all of our right to wage war there or for what cause–just mention Taliban or terrorists and those magic words when spoken provide blanket justification. No, it was all about what is the best strategy and which military genius has the best insight in how to best “regler le probleme”. I am struck by how organisations become like organisms that fight and adapt in order to perpetuate themselves like Wall St. and the military–it’s completely Darwinian. People seem to have very little to say about it and are subsumed by these entities. Imagine working for Gonzales’ Department of Justice–shades of Winston Smith. In the spirit of War is Peace, the military likes to say that it ‘wages peace’. We’ve already got Truth is Lies. I guess the next thing is Love is Hate.Regarding your point about Russia and China, my understanding is that Russia can supply at most about 25% of China’s energy needs.

I will just add that I read an article in today’s NY Times by Krugman arguing that the Chinese should stop using fossil fuels and curb their emissions. Krugman says that they are now the world’s main polluter even though their economy is half the size of ours. He does not buy their argument that they have the right to pollute just as we did during the early stages of our industrialization. The potential for a run-away greenhouse effect is so grave that it is up to the Chinese to do the right thing to save humanity, in effect. Interestingly, this would make a great pretext for military action against the Chinese, if global warming starts having bad effects in the US. It will be interesting to see if this becomes a pretext for military posturing.

even though he is with Pimco he does appear to be one of the good guys (though I’ve been fooled before)a very good readSecular OutlookMohamed El-Erian | May 2009http://www.pimco.com/LeftNav/PIMCO+Spotlight/2009/Secular+Outlook+May+2009+El-Erian.htm”In SumMarkets will revert to a mean, but it will not look anything like that of recent years. Relative to where it is coming from, the financial system will be de-levered, de-globalized, and re-regulated. Global growth will be lower and unemployment higher, notwithstanding the continued rotation of dynamism away from industrial countries and toward emerging economies. Price formation in many markets will be influenced by the legacy and, in some cases, continuation of direct government involvement. Burden sharing will feature more prominently, being one feature of the heavier hand of government in economic life.For a financial industry known for its famously short memory (and related infrastructures and behavior), this will feel like a new normal. Adaptations will be needed as the configuration of risks and returns shift, government debt balloons, and capital structures potentially migrate toward a simplified structure consisting just of equity and senior debt instruments. Business models will need to be retooled, and investment management vehicles made more responsive and robust.These issues will be front and center on our radar screens as we navigate the resources that you have entrusted to us. Indeed, in closing, allow me to quote from Bob Dylan’s song, “Forever Young,” which (italics added) expresses a simple notion that will influence how PIMCO navigates with you the bumpy journey to this new normal: “

This is actually not economy related at all but thought that it could be interesting to the male-dominated audience here, ha haWhen is a coalition not a coalition?http://blogs.reuters.com/global/2009/05/15/coalition-or-alliance/

How can you tell when U.S. forces in Afghanistan are operating alone?When they call it “the coalition”.That’s not a joke. It’s just how things work in Afghanistan, where two separate forces with two separate command structures — one completely American, the other about half American — operate side by side under the command of the same U.S. general.”When we say ‘coalition’, basically that means it’s just us,” a helpful U.S. military spokeswoman explained last month to a reporter who had just arrived in country after being away for a couple of years. “Otherwise, it’s the ‘alliance’.”And it’s not just words.“The alliance” and “the coalition” maintain completely separate press offices, each of which is often allowed to give only bits and pieces of detail about the same incident. The result can be a bit confusing.First, some history.The “coalition” refers to Operation Enduring Freedom, the U.S. (or, as they like to say, “U.S.-led”) mission ordered by President George W. Bush back in 2001 to catch Osama bin Laden and overthrow the Taliban.Occasionally over the past eight years it has actually operated as a coalition, with contributions from Britain and other countries.But these days, it’s strictly an American mission, with thousands of U.S. troops engaged in hunting insurgents, training Afghans and providing air support. (Well, maybe not quite strictly American: there could be a handful of British or Australian special forces in there too. But that’s a secret.)…

The U.S. and the U.K. have no sense of guilt,” said Anders Aslund, an expert on Scandinavia at the Peterson Institute for International Economics in Washington. “But in Norway, there is instead a sense of virtue. If you are given a lot, you have a responsibility.

Thriving Norway Provides an Economics Lesson,By LANDON THOMAS Jr. Published: May 13, 2009

Temasek sells all Bank of America stock!!!Caveat for the Bulls!http://www.marketwatch.com/m/Story/e48f4bb7-16a3-4ada-9b50-7e1b41217928

I am not sure how to interpret this line from the Investment Implications section of El-Erian’sdocument:” … It specifically argues for … Positioning for the eventuality of renewed depreciation of the dollar, keeping in mind that the magnitude of depreciation against other currencies could potentially be outpaced by that vis-à-vis real assets.”

First to call Last and Last to call First.

The Great Depression AnalogyIBTimes By Harold JamesMay 14, 2009

Whenever today’s economic crisis is discussed, analogies to the Great Depression are never far away. In its latest “World Economic Outlook,” the IMF examines the analogy explicitly, in terms not only of the collapse of financial confidence, but also of the rapid decline in global trade and industrial activity. In general, history, rather than economic theory, seems to offer a guide to interpreting wildly surprising and inherently unpredictable events.Almost every contemporary use of the depression analogy takes the year 1929 as a reference point. But two completely different pathologies were manifest in the Great Depression; each called for different diagnoses – and different cures.The first, and most famous, pathology was the stock market crash of October 1929 in the United States. No other country had a stock market panic of similar magnitude, in large part because no other country had experienced the euphoric run-up of stock prices that sucked large numbers of Americans, from very different backgrounds, into financial speculation.The second pathology was decisive in turning a bad recession into the Great Depression. A series of bank panics emanated from central Europe in the summer of 1931 and spread financial contagion to Great Britain, then to the US and France, and finally around the world.The 1929 panic has dominated all analysis of the depression for two rather peculiar reasons. First, no one has ever been able to explain satisfactorily the October 1929 market collapse in terms of a rational cause, with market participants reacting to a specific news event. So the crash presents an intellectual puzzle, and economists can build their reputations on trying to find innovative accounts.Some people conclude that markets are simply irrational. Others strain to produce complicated models, according to which investors might have been able to foresee the Depression, or ponder the likelihood of protectionist reactions in other countries to the American tariff act, though the US legislation had not yet even been finalized.The second reason that 1929 has been popular with academic and political commentators is that it provides a clear motive for taking particular policy measures. Keynesians have been able to demonstrate that fiscal stimulus can stabilize market expectations, and thus provide an overall framework of confidence. Monetarists tell an alternative but parallel story of how stable monetary growth avoids radical perturbations.The 1929 crash had no obvious cause, but two very plausible solutions. The European banking disaster of 1931 was exactly the other way round. No academic laurels are to be won by finding innovative accounts as its cause: the collapses were the result of financial weakness in countries where bad policies produced hyper-inflation, which destroyed banks’ balance sheets. Intrinsic vulnerability made for heightened exposure to political shocks, and disputes about a Central European customs union and about war reparations was enough to topple a house of cards.But repairing the damage was tough. Unlike 1929, there were (and are) no obvious macroeconomic answers to financial distress.Some famous macroeconomists, including Larry Summers, the current chief economic thinker of the Obama administration, have tried to play down the role of financial-sector instability in causing depressions. The answers, if they exist, lie in the slow and painful cleaning up of balance sheets; and in microeconomic restructuring, which cannot simply be imposed from above by an omniscient planner, but requires many businesses and individuals to change their outlook and behavior. The improvement of regulation and supervision, while a good idea, is better suited to avoiding future crises than to dealing with the consequences of a catastrophe that has already occurred.

Harold James is a renowned historian, specializing in the history of Germany and European economic history. James is a prolific author, having published dozens of books and articles in his field. He is currently a Professor of History at Princeton University as well as a Professor of International Affairs at the University’s Woodrow Wilsonhttp://www.ibtimes.com/articles/20090514/great-depression-analogy.htm

And what is YOUR position? Where are YOUR facts?Mark

Hot on the heels of Chryasler’s cut of 768 dealerships, this just in: GM to close 1100 dealerships.Rally food? Or has reality finally gained the upper hand?

Where is Snake when you need him the most?

They should make ShackenStein ….

I think Obama and all the PTP are finally coming to the conclusion We are in deep S..t!. Sometime this year He will address the nation about just how deep it is. They are running out of options…. its like a baseball team that has run out of pitchers and its the 17th inning and they got non-pitchers pitching…No fix either in 10 years, we have 60 Trillion in Unfunded liabilities due in 10 years… How are they going to fix that. as we watch approx. 2000 Auto dealers go away this week, with probably 2000 more over the summer, they are never coming back… they would not be letting all those Dealers and jobs and infrastructure go away if they saw a recovery, even if they saw a delayed in cards. there will be less demand for Cars, gas, everything because they have no plan to fix the NO JOBS mess.This administration and Congress has got too mnay small, BS fixes they are attempting. they refuse to do what needs to be done because the PTB, like GS are running things.We are screwed because of NO JOBS

Didn’t the U.S. and USSR bankrupt each other during the cold war? USSR just went down to the mat first (to the humiliation of that Stanlinist judo expert Putin). Now the U.S. will go down too.Netherlands will be inundated by rising water levels from relentless climate change. Better pick some higher ground, LB. And not in the Gulf Stream.Guest

Insurance companies, to qualify for taxpayer bailouts under the “Capital Purchase Program,” had to restructure themselves as bank holding companies, like Goldman and Morgan Stanley earlier.Lincoln National and Hartford both, for example, bought smaller banks and…SHAZAM!…they’re no longer stodgy old insurers, they’re sparkling new creatures, banks…with their hand out!To make this newest list of too-big-to-fail deadbeats, of course, you have to be pals with the “deciders” at the Fed-Treasury-Goldman Company. Translation: insider investment banks own a piece of your company and need a little taxpayer juice to make your numbers pass muster to boost their numbers for the rating services. And still there are those who wonder how some industries hold their stock prices in this deepening recession.

You know what, there is no problem here in California. We’ve got everything covered. P.S. Did you read the article?Additional reading material:2009 could be a great year for fiscal conservatives in Arizona. Thanks to voters, it appears that the Arizona House and Senate in January will have fiscally conservative majorities for the first time in many years.At the same time, the public is finally beginning to understand that the state government’s $2 billion budget deficit ($1,000 for every household in the state) was caused by reckless overspending during the past six years.http://www.eastvalleytribune.com/story/132141For the past six years, the state government — led by Gov. Janet Napolitano — has increased spending at unrealistic rates. She’s Obama’s new commissar of “homeland” (what homeland to be determined) security—you know, the woman who went down to Mexico to confer with Vicente Fox to make a more comfortable route through Arizona with drinking fountains, etc., for illegals into America while she was governor of an American state. Don’t you remember that, when the people of Arizona went beserk?I’ll refresh your memory:“ENFORCING THE LAWS AS WRITTEN, NOT AS REQUESTED BY CORPORATE AMERICA”January 1, 2005– [M]embers of the Mexican Government have admitted selling passage with immigration documents to middle eastern people who cannot gain entry into the US by any other means. Syrians as well as others who were apparently on watch lists contacted this official who issued them visas for a healthy price. The current trend is to assimilate these middle easterners into groups of illegal immigrants, teach them to answer the Border Patrol in Spanish and help them to enter undetected through the wide open Arizona border…Janet Napolitano.., against the majority of Arizona Voters that passed Proposition 200…vowed to find a way to defeat the measure, she has done exactly that by using MALDEF/La Raza to file a lawsuit on the behalf of illegal immigrants claiming that the measure somehow infringed on their non-existent civil rights…The talk among many here in the Phoenix area concerning our Governor is getting ugly, she has ignored most letters and does not respond to correspondence on issues she supports. “http://www.newswithviews.com/public_comm/public_commentary19.htmI’ve got a business appointment. Perhaps we can do Texas tomorrow.

Here’s a fun one:Health Care Leaders Say Obama Overstated Their Promise to Control Costshttp://www.nytimes.com/2009/05/15/health/policy/15health.html?bl&ex=1242532800&en=c33a866a156ce416&ei=5087%0AA funny excerpt:’Nancy-Ann DeParle, director of the White House Office of Health Reform, said “the president misspoke” on Monday and again on Wednesday when he described the industry’s commitment in similar terms. After providing that account, Ms. DeParle called back about an hour later on Thursday and said: “I don’t think the president misspoke. His remarks correctly and accurately described the industry’s commitment.’LOL – I hope Ms. DeParle doesn’t join the ranks of the unemployed! Poor lady – can you imagine the phone call she received when Rahm Emmanuel caught wind of what she had said? Fuhgedaboutit!Anyhow, this is the first round in what will likely be a brutal fight on reforming health care. And if you believe David Brooks, a lot is riding on the outcome – like the solvency of our country:Fiscal Suicide Aheadhttp://www.nytimes.com/2009/05/15/opinion/15brooks.html?_r=1

SACRAMENTO, Calif. (CBS13) ―Click to enlargeCBSBudget Proposes Selling Cal Expo (5/14/2009)Timing Of Governor’s Budget Release Questioned (5/14/2009)Gov’t To Borrow 46 Cents For Every Dollar Spent (5/12/2009)Analyst: State May Need To Borrow $20B Next Year (5/7/2009)Related LinksRead The Governor’s Proposed BudgetThousands of state workers will find out if they will still have a job after today. The state is sending out 5,000 layoff notices on the orders of Governor Schwarzenegger to help cut the state budget deficit.Union members took to the picket lines in this massive protest just moments after Thursday’s announcement of the layoffs.The cuts are supposed to help lower a new $15 billion deficit. California job losses are to blame for part of the new budget gap.Recent figures show the state losing as many as 100,000 jobs a month.”To give you an idea of how much that is, take every seat in the Rose Bowl and fill it with a Californian and that’s how many people in some of those months lost their jobs,” said H.D. Palmer from the California Department of Finance.The Department of Corrections and the Department of Health and Human Services are expected to be hit hardest.Those with the least seniority will be the first to lose their positions. Workers who get the layoff notices have 120 days to find a new job.

Simply amazing! The Golden state has more debt, more poor on Medicaid and food stamps than any other state while at the same time has the most millionaires and billionaires. So, of course, let’s cut education, raise taxes and fees and fire local and state employees to solve the problem of chronic overspending and fiscal irresponsibility! Hasta la vista baby!

During the human history have a corrupt system never been able to survive, and the time of their survival is proportional against speed of information.Internet will bring “change”!

Interesting perspective. Claims that the greatest instabilities are the result of floating currencies (which lend to speculation) and that inflation isn’t necessarily the result of printing money.The Rise and Fall of the International Gold Standard by Stephen LendmanThis is the third in a series of articles on EllenBrown’s superb 2007 book titled “Web of Debt,” now updated in a December 2008 third edition. It tells “the shocking truth about our money system, (how it) trapped us in debt, and how we can break free.” This article focuses on global debt entrapment.Mark

I see no up-trend, period!Chart of the DayWhile the stock market is up sharply since early March, the economy as well as corporate earnings continue to suffer. Today’s chart helps provide some perspective as to the magnitude of the current economic decline. Today’s chart illustrates that 12-month, as-reported S&P 500 earnings have declined over 90% over the past 20 months (with over 90% of S&P 500 companies having reported for Q1 2009), making this by far the largest decline on record (the data goes back to 1936). In fact, real earnings have dropped to a record low and if current estimates hold, Q3 2009 will see the first 12-month period during which S&P 500 earnings are negative. (emphasis added)Mark

Does this translate into about $160 PE given current S&P at 880? Somebody mentioned this before on this forum.

Correction… i had heard the buffet Railroad sell on fox, but it was wrong. He was buying rail stocks… Sorry PETE CA

Job creation is inflationary which would wipe out the banks profits. TPTB would much rather have deflation so they can buy up all the assets on the cheap just like the IMF does to 3rd world countries the oligarchs are now doing to the U.S.. We are really being raided, once their done and own everything then they’ll let the inflation inferno ravage the populace.

Mark: That chart gives a profound reason to believe that we have not seen the end of this crisis. And also that any recovery (when it does happen) is going to be both slow and painful.PeteCA

m,i post this link in the event you have not seen it?.http://www.youtube.com/watch?v=6YurhFvPy14&NR=1.as always, start with episode 1.zeitgeist addendum …

f,.”The Golden state has more debt, more poor on Medicaid and food stamps than any other state while at the same time has the most millionaires and billionaires.”.i think this is very interesting and curious.certain influential individuals are doing “famously” whilethe institution of state is collapsing.

California is spending $11,626 per pupil funding (PPF) K-12 for the 2008/09′ school year. The National Center for Education Statistics (NCES), a division of the United States Department of Education, ranked it 25th in PPF among the states for 2003-04.California spends over 50% of it’s state budget on education.http://www.lao.ca.gov/analysis_2008/education/ed_anl08006.aspxThe median salary of California school superintendents is $95,000 with those in the 75 percentile and above earning between $110,000 and $130,000. The average teacher salary for nine months last year (2008) was $65,808, an increase of 3.4 percent from 2007, according to new state figures. The highest average salary of $93,283 was in the Mountain View-Los Altos Union area near San Francisco. Benefits and retirement pensions, up to 100% of salary, comprise a large part of compensation as does vacation leave.http://www.ihireschooladministrators.com/t-School-Superintendent-s-California-salary.htmlhttp://www.sacbee.com/1098/story/995141.htmlCalifornia ranks 47th out of 50 states in the “Smartest State” designation as reported by Vincent Gioia, a retired patent attorney and contributing editor to Family Security Matters. Here are excerpts under his byline: Exclusive: Has Illegal Immigration’s Effect on Education Become the ‘Third Rail’ of Politics? | March 13, 2009Gov. Schwarzenegger and the Democrat state legislature have raised California taxes despite Californians being already burdened by the third highest tax rates in the country… The state legislature’s out-of-control “spend and tax” culture has lead to a 40% increase in state spending during Schwarzenegger’s term…California ranks next to last in states where the adult population has at least a high school education, according to a report released by the California Faculty Association at Cal State Los Angeles.Ranking 49th out of 50 states is an indication of the state’s deteriorating educational status in recent decades, according to “California at the Edge of a Cliff,” by Thomas G. Mortenson, a senior scholar at the Pell Institute for the Study of Opportunity in Higher Education and publisher of the Postsecondary Education Opportunity newsletter…Mortenson has just released a report on higher education, prepared for the California Faculty Association (see http://www.calfac.org/calattheedge.html). He said he was “stunned to see how far and how fast California has fallen.” In the share of adults with a bachelor’s degree, California was No. 1 or No. 2 from 1977 to 1987. Today the state is No. 14. As of 2007, California ranked 14th in the nation in terms of college educated members of the workforce over 25 years of age, “a big drop from 1987…[I]n a technology age…California schools rank 49th for technology…A recent study ranks California 34th among all U.S. states in it’s “students’ potential for success.” The nonprofit group Editorial Projects in Education, evaluates state education systems based on 13 different categories from early childhood education to average annual income…[O]nly 62.3% of California’s children have parents who are fluent in English, compared to the national average of 84.3%…A “Smartest State” designation is awarded based on 21 factors chosen from Morgan Quitno’s annual reference book, Education State Rankings, 2006-2007. To calculate the Smartest State rankings, there are 21 factors divided into two groups: those that are “negative” for which a high ranking would be considered bad for a state, and those that are “positive” for which a high ranking would be considered good. States are assessed based on how they stack up against the national average. The end result is that the farther above the national average, the higher (and smarter) a state ranks. This same methodology is used for our annual Healthiest State, Safest and Most Dangerous State and Safest/Dangerous City Awards.Where does California stand in these rankings? 47 out of 50 states. (Mississippi is 48th.)…http://www.familysecuritymatters.org/publications/id.2736/pub_detail.asp

The late Murray N. Rothbard explained in 1995 how the Federal Reserve System could be abolished in TO SAVE OUR ECONOMY FROM DESTRUCTION which I have excerpted below.Said Rothbard, “Our major problem, however, is…mystification by the ruling elite of technocrats and intellectuals, who, whenever some public spokesman arises to call for large-scale tax cuts or deregulation, intone sarcastically about the dimwit masses who ‘seek simple solutions for complex problems.’ Well, in most cases, the solutions are indeed clear-cut and simple, but are deliberately obfuscated by people whom we might call ‘terrible complicators.’ In truth, taking back our money would be relatively simple and straightforward, much less difficult than the daunting task of denationalizing.”Here’s an excerpt from the great Rothbard:To save our economy from destruction and from the eventual holocaust of run away inflation, we the people must take the money-supply function back from the government. Money is far too important to be left in the hands of bankers and of Establishment economists and financiers. To accomplish this goal, money must be returned to the market economy, with all monetary functions performed within the structure of the rights of private property and of the free-market economy…Our goal may be summed up simply as the privatization of our monetary system, the separation of government from money and banking. The central means to accomplish this task is also straightforward: the abolition, the liquidation of the Federal Reserve System – the abolition of central banking. How could the Federal Reserve System possibly be abolished? Elementary: simply repeal its federal charter, the Federal Reserve Act of 1913…The article concludes:Liberals are fond of blaming our economic crisis on the “greed of the 1980s.” And yet “greed” was no more intense in the 1980s than it was in the 1970s or previous decades or than it will be in the future. What happened in the 1980s was a virulent episode of government deficits and of Federal Reserve-inspired credit expansion by the banks. As the Fed purchased assets and pumped in reserves to the banking system, the banks happily multiplied bank credit and created new money on top of those reserves.There has been a lot of focus on poor quality bank loans: on loans to bankrupt Third World countries or to bloated and, in retrospect, unsound real estate schemes and shopping malls in the middle of nowhere. But poor quality loans and investments are always the consequence of central bank and bank-credit expansion. The all-too-familiar cycle of boom and bust, euphoria and crash, prosperity and depression, did not begin in the 1980s. Nor is it a creature of civilization or the market economy. The boom-bust cycle began in the eighteenth century with the beginnings of central banking, and has spread and intensified ever since, as central banking spread and took control of the economic systems of the Western world. Only the abolition of the Federal Reserve System and a return to the gold standard can put an end to cyclical booms and busts, and finally eliminate chronic and accelerating inflation.Inflation, credit expansion, business cycles, heavy government debt, and high taxes are not, as Establishment historians claim, inevitable attributes of capitalism or of “modernization.” On the contrary, these are profoundly anti-capitalist and parasitic excrescences grafted onto the system by the interventionist State, which rewards its banker and insider clients with hidden special privileges at the expense of everyone else.Crucial to free enterprise and capitalism is a system of firm rights of private property, with everyone secure in the property that he earns. Also crucial to capitalism is an ethic that encourages and rewards savings, thrift, hard work, and productive enterprise, and that discourages profligacy and cracks down sternly on any invasion of property rights. And yet, as we have seen, cheap money and credit expansion gnaw away at those rights and at those virtues. Inflation overturns and transvalues values by rewarding the spendthrift and the inside fixer and by making a mockery of the older “Victorian” virtues.Restoring the Old RepublicThe restoration of American liberty and of the Old Republic is a multi-faceted task. It requires excising the cancer of the Leviathan State from our midst. It requires removing Washington, D.C., as the power center of the country. It requires restoring the ethics and virtues of the nineteenth century, the taking back of our culture from nihilism and victimology, and restoring that culture to health and sanity. In the long run, politics, culture, and the economy are indivisible. The restoration of the Old Republic requires an economic system built solidly on the inviolable rights of private property, on the right of every person to keep what he earns, and to exchange the products of his labor. To accomplish that task, we must once again have money that is produced on the market, that is gold rather than paper, with the monetary unit a weight of gold rather than the name of a paper ticket issued ad lib by the government. We must have investment determined by voluntary savings on the market, and not by counterfeit money and credit issued by a knavish and State-privileged banking system. In short, we must abolish central banking, and force the banks to meet their obligations as promptly as anyone else. Money and banking have been made to appear as mysterious and arcane processes that must be guided and operated by a technocratic elite. They are nothing of the sort. In money, even more than the rest of our affairs, we have been tricked by a malignant Wizard of Oz. In money, as in other areas of our lives, restoring common sense and the Old Republic go hand in hand.This article originally appeared in the November 1995 issue of The Freeman and is reprinted with permission.http://www.lewrockwell.com/rothbard/rothbard200.html

A good place to start cutting back might be food inspection and if California has some kind of an early warning center for disease control, those people could easily be dispensed with. The people who matter probably have their meat shipped in, and in any case, they could have their own personal food tasters. I’m sure many of the unemployed would be willing to do that job to support their families. In any case, people should consider selling their own private organs–we all have spare kidneys. God gave us two kidneys for just that reason. There are undoubtedly rich people who could use a little rejuvenation from such spare body parts.

Frodo failed.THE FEDERAL RESERVE HAS THE RING.

Great Artice and info…

I would only add the word criminal to the following

Said Rothbard, “Our major problem, however, is…mystification by the ruling criminal elite of technocrats and intellectuals, who, whenever some public spokesman arises to call for large-scale tax cuts or deregulation, intone sarcastically about the dimwit masses who ‘seek simple solutions for complex problems.’ Well, in most cases, the solutions are indeed clear-cut and simple, but are deliberately obfuscated by people whom we might call ‘terrible complicators.’

http://www.henryckliu.com(I cropped the Basel II discussion to shorten)Credit Default SwapsThe banking system in recent decades has morphed into one that is inherently risk-infested on account of its precarious dependence on unimpaired counterparty credibility. The shadow banking system has deviously evaded the reserve requirements of the traditional regulated banking regime and institutions and has promoted a chain-letter-like inverted pyramid scheme of escalating leverage, based in many cases on nonexistent reserve cushion. This was revealed by the AIG collapse in 2008 caused by its insurance on financial derivatives known as credit default swaps (CDS).AIG Financial Products (AIGFP), based in London where the regulatory regime was less restrictive, took advantage of AIG statue categorization as an insurance company and therefore not subject to the same burdensome rules on capital reserves as banks. AIG would not need to set aside anything but a tiny sliver of capital if it would insure the super-senior risk tranches of CDOs in its heoldings. Nor was the insurer likely to face hard questions from its own regulators because AIGFS had largely fallen through the interagency cracks of oversight. It was regulated by the US Office for Thrift Supervision, whose staff had inadequate expertise in the field of cutting-edge structured finance products.AIGFP insured bank-held super-senior risk CDOs in the broad CDS market. AIG would earn a relatively trifle fee for providing this coverage – just 0.02 cents for each dollar insured per year. For the buyer of such insurance, the cost is insignificant for the critical benefit, particularly in the financial advantage associated with a good credit rating, which the buyer receives not because the instruments are “safe” but only that the risk was insured by AIGFP. For AIG, with 0.02 cents multiplied a few hundred billion times, it adds up to an appreciable income stream, particularly if no reserves are required to cover the supposedly non-existent risk. Regulators were told by the banks that a way had been found to remove all credit risk from their CDO deals.Systemic Risk and Credit RatingThus there were two dimensions to the cause of the current credit crisis. The first was that unit risk was not eliminated, merely transferred to a larger pool to make it invisible statistically. The second, and more ominous, was that regulatory risks were defined by credit ratings, and the two fed on each other inversely. As credit rating rose, risk exposure fell to create an under-pricing of risk. But as risk exposure rose, credit rating fell to exacerbate further rise of risk exposure in a chain reaction that detonated a debt explosion of atomic dimension.The Office of the Comptroller of the Currency and the Fed Reserve jointly allowed banks with CDS insurance to keep super-senior risk assets on their books without adding capital because the risk was insured. Normally, if the banks held the super-senior risk on their books, they would need to post 8% capital. But capital could be reduced to one-fifth the normal amount (20% of 8%, meaning $160 for every $10,000 of risk on the books) if banks could prove to the regulators that the risk of default on the super-senior portion of the deals was truly negligible, and if the securities being issued via a collateral debt obligation (CDO) structure carried a Triple-A credit rating from a “nationally recognized credit rating agency”, such as Standard and Poor’s rating on AIG.With CDS insurance, banks then could cut the normal $800 million capital for every $10 billion of corporate loans on their books to just $160 million, meaning banks with CDS insurance can loan up to five times more on the same capital. The CDS-insured CDO deals could then bypass international banking rules on capital. To correct this bypass is a key reason why the government wanted to conduct stress tests on banks in 2009 to see if banks need to raise new capital in a Downward Loss Given Default.CDS contracts are generally subject to mark-to-market accounting that introduces regular periodic income statements to show balance sheet volatility that would not be present in a regulated insurance contract. Further, the buyer of a CDS does not even need to own the underlying security or other form of credit exposure. In fact, the buyer does not even have to suffer an actual loss from the default event, only a virtual loss would suffice for collection of the insured notional amount. So, at 0.02 cents to a dollar (1 to 10,000 odd), speculators could place bets to collect astronomical payouts in billions with affordable losses. A $10, 000 bet on a CDS default could stand to win $100,000,000 within a year. That was exactly what many hedge funds did because they could recoup all their lost bets even if they only won once in 10,000 years.Default CorrelationModeling the risks involved in credit derivatives revolved around the issue of “correlation”, which is the degree to which defaults within any given pool of loans might be interconnected vertically. Statisticians know that company debt defaults can be contagious within and even beyond industry limits. Historical correlations in corporate default and equity prices are normally used as a basis to project future correlations. But most of these historical correlation models do not include that fact that deregulated financial globalization has magnified correlation to the degree that even a small number of defaults would mushroom into catastrophic events of too-big-to fail dimension. Too-big-to-fail then is no longer enterprise specific, but has become systemic. This is beginning to finally hit on the consciousness of regulators to realize that even small individual mortgage or credit card holders have in fact also become too-big-to-fail in a perverse manifestation of debt-driven financial democracy.While margin payments do flow periodically between counterparties to rebalance changing risk exposures, the special conduits that hold CDO contracts insured by CDS are in effect non-regulated banks, much like hedge funds, with no requirements to hold reserves against a “Black Swan” event or a Minsky Moment that might cause a chain reaction.A Black Swan event is a large-impact, hard-to-predict and rare occurrence that deviates beyond what is normally expected of a situation. This term was coined by Nassim Nicholas Taleb and summarized in his 2007 book: The Black Swan.A Minsky Moment, named after economist Hyman Minsky (1919-1996), is the point in a credit cycle when investors develop cash flow problems due to spiraling debt they had been structurally compelled by systemic logic to incur in order to finance irresistible speculative investments offered by imbalance between the penalty and reward of risk caused by mis-pricing of risk, usually caused by excessively low cost of borrowing. At the point of a Minsky Moment, a major sell-off would begin due to the inability to find counterparty to bid at the high asking prices previously quoted, leading to a sudden and precipitous collapse in market-clearing asset prices and a sudden, sharp drop in liquidity. The term Minsky Moment was coined by Paul McCulley of PIMCO in 1998 to describe the Russian default that led to the collapse of hedge fund LTCM, as worked out by the late Hyman Minsky decades earlier.According to the Bank for International Settlements (BIS), total outstanding CDS at year end 2007 was $43 trillion, more than half the size of the entire asset base of the global banking system. Total derivatives amounted to over $500 trillion in notional value, spread out in the balance sheets of Special Investment Vehicles (SIVs), Collateralized Debt Obligations (CDOs) and other conduits comprising the highly-leveraged shadow banking system. July 2007 was the month the credit market imploded.On July 16, 2008, a full year after the credit markets failed im July 2007, the federal banking and thrift agencies (The Board of Governors of the Federal Reserve System; the Federal Deposit Insurance Corporation; the Office of the Comptroller of the Currency, and; the Office of Thrift Supervision) issued a final guidance outlining the supervisory review process for the banking institutions that are implementing the new advanced capital adequacy framework known as Basel II. The final guidance, relating to the supervisory review, aims at helping banking institutions meet certain qualification requirements in the advanced approaches rule, which had taken effect on April 1, 2008.Big Payoff for LobbyingDuring 2008, the financial companies that received bailout money from the Fed and the Treasury had spent $114 million on lobbying Congress and political campaign contributions. These companies received $295 billion in bailout money. Center for Responsive Politics Executive Director Sheila Krumholz said of this development: “Even in the best economic times, you won’t find an investment with a greater payoff than what these companies have been getting.”Ms. Krumholz was correct that the campaign contribution was a fantastically good investment for the donors, but it was by far not the best. The regulators’ relaxation on bank capital requirements from CDS insurance beat it by a mile. But the biggest windfall was from lifting of leverage limits.Suicidal Leverage RatiosThe net capital rule created by the Security Exchange Commission (SEC) in 1975 required broker-dealers to limit their debt-to-net-capital ratio to 12-to-1, and they must issue early warnings if they began approaching this limit, and were forced to stop trading if they exceeded it, so broker-dealers often kept their debt-to-net capital ratios much lower than 12-1. The rule allowed the SEC to oversee broker-dealers, and required firms to value all of their tradable assets at market prices. The rule applied a haircut, or a discount, to account for the assets’ market risk. Equities, for example, had a haircut of 15%, while a 30-year Treasury bill, because it is less risky, had a 6% haircut. But a 2004 SEC exemption — given only to five big firms — allowed them to lever up 30 and even 40 to 1.Ever since the Great Depression of the 1930s, the government has tried to limit the leverage available to the public in the US stock market by maintain margin requirements. But regulators, led by former chairman of the Federal Reserve Alan Greenspan, thought financial innovation would be hampered, and financial activity driven to unregulated market overseas, if there were any attempts to impose limits on leverage in the unregulated globalized credit and capital markets. After all, innovation was viewed as the driving force in US prosperity. The global financial system embarked on a race to assume more risk under a mentality of “if I don’t smoke, somebody else will.”This brave new approach, which all five qualifying broker-dealers – Bear Stearns, Lehman Brothers, Merrill Lynch, Goldman Sachs, and Morgan Stanley – voluntarily adopted, altered the way the SEC measured their capital. The five big firms led the charge for the net capital rule change to promote financial innovation, spearheaded by Goldman Sachs, then headed by Henry Paulson, who two years later, would leave Goldman to become the Treasury Secretary in 2006, and a year later had to deal with the global mess created by high leverage from which three of the five qualifying broker-dealers had collapsed.Using computerized models provided by the five big firms, the SEC, under its new Consolidated Supervised Entities (CSE) program, allowed the broker-dealers to increase their debt-to-net-capital ratios, sometimes, as in the case of Merrill Lynch, to as high as 40-to-1. It also removed the method for applying haircuts, relying instead on another math-based computerized model for calculating risk that led to a much smaller discount.The SEC justified the less stringent capital requirements by arguing it was now able to manage the consolidated entity of the broker-dealer and the holding company, which would ensure better management of risk. “The Commission’s 2004 rules strengthened oversight of the securities markets, because prior to their adoption there was no formal regulatory oversight, no liquidity requirements, and no capital requirements for investment bank holding companies,” a spokesman for the agency rationalized.In loosening the capital rule, which was supposed to provide a buffer in turbulent times, the SEC also decided to rely on the five big firms’ own computer risk models, essentially outsourcing the job of monitoring risk to the banks it was supposed to supervise. Over subsequent years, all would take advantage of the looser capital rule to increase leverage.The leverage ratio – a measurement of how much the companies were borrowing compared to their total assets – rose sharply at Bear Stearns, to 33 to 1. In other words, for every dollar in equity, it had $33 of debt. The ratio at the other firms also rose significantly. This advantage enabled the Big Five to go on a frenzy of acquisition, expanding risk to the entire financial system. The abuse of leverage was particularly severe in the hedge fund industry in which the Big Five were big players both in proprietary funds and as broker-dealer for large hedge funds who in turn were highly leveraged. (Please see my October 30, 2008 AToL article: Killer Touch for Market Capitalism)Government Bailouts and Bank Executive PayBanks that received bailout money had paid their top executives nearly $1.6 billion in salaries, bonuses, and other benefits in 2007. Benefits included cash bonuses, stock options, personal use of company jets and chauffeured cars, home security expenditure, country club memberships, and professional financial management fees. The Obama administration has promised to set a $500,000 cap on executive pay at companies that receive bailout money, but the proposal would also allow banks to give unlimited amounts of stock to these same executives, presumably tying compensation to performance, even though much of the recent rise in the price of bank shares were the direct result of government bailout. The losses are still there, only now the taxpayers are paying for them rather than bank shareholders.On January 15, 2009, the out-going Bush/Paulson Treasury issued interim final rules for reporting and record keeping requirements under the executive compensation standards of the Capital Purchase Program (CPP).On January 20, 2009, Barack Obama assumed office as the 44th President of the United States.On January 21, 2009, the new Obama/Geithner Treasury announced new regulations regarding disclosure and mitigation of conflicts of interest in TARP contracts. It was the first sign that Obama’s politics of change might not be what it sounded like to voters during the campaign.On February 5, 2009, the Senate approved changes to the TARP which prohibit firms receiving TARP funds from paying bonuses to their 25 highest-paid employees. The amendment was proposed by Christopher Dodd of Connecticut as an amendment to the proposed $900 billion economic stimulus act then yet to be passed. The fundamental flaw of TARP, the myth that the transfer of hundreds of billion of toxic assets from the private sector into the public sector can make them less toxic, was left unchanged while distraction on a minor point on executive bonuses was held up as a sign of the new populism.The Bank Stress TestsOn February 10, 2009, the newly confirmed but still understaffed Secretary of the Treasury Timothy Geithner outlined his plan to use the $300 billion remaining in TARP funds, announcing his intention to use $50 billion for foreclosure mitigation and to use the rest to help fund private investors to buy toxic assets from banks. Nevertheless, this highly anticipated speech coincided with a nearly 5% drop in the S&P 500 and was criticized for being short on details.On February 26, 2009, The Obama administration, in unveiling details of its financial-rescue plan, laid out a dark economic scenario it expects banks to be able to withstand, the starting point for what could become a significant new infusion of government cash into the banking system.The first step in the latest effort to shore up the banking sector would be a series of “stress tests” to assess whether the largest 19 US banks can survive a protracted slump. To ensure banks can survive even if the unemployment rate rises above 10% and home prices fall by an additional 25%, the administration will conduct stress tests that will end up requiring some institutions to either raise private money or accept a bigger investment from the government. The tests assume a 3.3% contraction in GDP in 2009, which would be the worst performance since 1946. And it assumes home-price declines of another 22% in 2009 and 7% in 2010.The stress tests assume an unemployment rate averaging 8.9% in 2009 and 10.3% in 2010. Because that is an average for a whole year, the tests envision the jobless rate reaching higher than the average in some months. The rate was 7.6% in January. In March the unemployment rate for California was 11.2%; for Michigan, it was 12.6%. The Fed said it does not expect the economy to deteriorate as sharply as the test scenarios, but it wants to be sure banks would be prepared for worst case eventualities. Yet many think the government’s dark scenario was not dark enough on both unemployment projections and inflation expectations.Laurence Meyer, former Fed governor (1996 – 2002), vice chairman of Macroeconomic Advisers LLC, a forecasting firm whose models are widely used in Washington and New York, told the press that “I don’t have any problem believing the unemployment rate is going to move to 12% or that vicinity.”Mr. Meyer said regulators had to strike a delicate realistic balance in designing their tests – a truly grim scenario such as the economy contracted by 9% as in 1930, 6% as in 1931 and 13% as in 1932 – it could force banks to raise more capital than they are capable of raising, driving them further into the government’s arms. In other words, the dreaded N word. “You don’t want to know the answer to some of the questions you might ask,” Mr. Meyer told the press.The tests were completed by the end of April but the results were not released until May 8 because banks were reported to have disputed the test results. The Wall Street Journal reported that as a result of intense negotiation with banks, the Fed significantly scaled back the size of the capital hole facing the nation’s biggest banks. As used in the stress tests, Tier 1 common capital ratio is an estimate of capital available to common shareholders as a percentage of a bank’s risk-weighted assets.The Fed has told banks it looks at Tangible Common Equity (TCE) ratio that measures how much shareholders would have left after liquidation. TEC ratio shows the equity of a bank minus its preferred shares, goodwill and intangible assets as a percentage of tangible assets. The Fed wants TCE to be at lest 4% of a bank’s risk-weighted asset. Citigroup’s TEC was only 1.9%, Bank of America 2.9% and Wells Fargo 2.9%.Citigroup, which has already been bailed out three times amounting to $45 billion, reportedly needs to raise up to $10 billion of new capital as a result of the stress tests. Bank of America, which has had $45 billion in government aid, was found to need $33.9 billion. Regional banks Wells Fargo ($13.7 billion) and PNC Financial ($600 million) were also among the banks that would need to raise more capital.Citigroup is believed to be considering a plan to convert more than $15 billion in trust preferred shares – a hybrid of debt and equity – into common stock. Since trust preferred shares are held by non-government investors, this conversion could enable government authorities to inject further funds into the bank without raising its stake beyond the 36% it has already agreed to buy. Citigroup would have to force holders of trust preferred shares to convert them into common stock, which ranks below those securities and does not pay a yearly interest rate, by threatening to stop paying interest if they reject the offer.Banks have 30 day after the stress tests to give the government a recapitalization plan and up to six months to correct any capital shortfall. The Fed’s strong preference is for banks in need of fresh capital to either raise it through private capital markets or selling assets. For banks that cannot raise private capital, they may have to sell to the government big stakes in their common equity to meet capital requirements.Unlike the Bush administration’s effort to pump $250 billion into banks, the Obama team did not commit a set amount of money to the effort. President Obama said after taking office that banks would need additional funds beyond the $700 billion rescue package approved by Congress in the fall of 2008.The government’s investment would come in the form of convertible preferred shares, which institutions could choose to convert into common equity at any time. Regulators and investors have become increasingly concerned about the amount of common stock banks hold, since that is a bank’s first line of defense against losses. Regulators said they expect banks would convert the shares to common equity as needed to help protect against losses.Many economists think most of the nation’s largest banks will likely have to raise more capital beyond the economic assumptions that regulators used. Under some circumstances, the government might end up owning majority stakes in banks.Banks that get a government investment will have to comply with strict executive-compensation restrictions, including curtailed bonuses for top executives and earners. The requirement is shaping up to be a strong incentive for banks to repay or reject government investment. The securities held by the government will pay a 9% dividend — higher than the 5% banks are required to pay under the Bush-era program — and banks would be restricted in dividend payouts and from buying back their own stock. The securities would automatically convert to common stock after seven years. Banks that have already sold preferred shares to the government as part of the $250 billion program would also be able to swap the preferred shares for convertible securities that can convert to common shares.Administration officials said the effort is an attempt to avoid nationalizing banks while making sure institutions can lend money. While officials said most banks are considered well capitalized, uncertainty about economic conditions is hindering their ability to lend money or attract private capital.Treasury Secretary Timothy Geithner sought to discredit speculation that the government might nationalize banks, saying such a move is “the wrong strategy for the country and I don’t think it’s the necessary strategy.” Mr. Geithner, speaking on February 10 on The NewsHour with Jim Lehrer, said there may be situations where the government provides “exceptional support” but that the best outcome is if the banks “are managed and remain in private hands.”Private Participation in Government Investment PlanOn March 23, 2009, Treasury Secretary Geithner announced a Public-Private Investment Program (P-PIP) to buy toxic assets from bank balance sheets.Major US stock market indexes rallied on the day of the announcement, rising by over 6% with bank stocks leading the way. P-PIP has two primary programs. The Legacy Loans Program will attempt to buy residential loans from bank balance sheets. The FDIC will provide non-recourse loan guarantees for up to 85% of the purchase price of legacy loans. Private sector asset managers and the Treasury will provide the remaining assets. The second program is called the legacy securities program which will buy mortgage backed securities (RMBS) that were originally rated AAA and commercial mortgage-backed securities (CMBS) and asset-backed securities (ABS) which are rated AAA. The funds will come in many instances in equal parts from the Treasury TARP money, private investors, and from loans from the Federal Reserve’s Term Asset Lending Facility (TALF). The initial size of the Public-Private Investment Partnership is projected to be $500 billion. Economist Paul Krugman has been very critical publicly of this program arguing the non-recourse loans lead to a hidden subsidy that will be split by asset managers, banks’ shareholders and creditors. Banking analyst Meridith Whitney, who first raised questions about Citigroup’s soundness, argues that banks will not sell bad assets at fair market values because they are reluctant to take asset write downs. Removing toxic assets would also reduce the volatility of bank stock prices. Because stock is a call option on firm assets, this lost of volatility will hurt the stock price of distressed banks. Therefore, such banks will only sell toxic assets at above market prices.Four small regional banks on March 30 2009 became the first financial institutions to return the federal money they had received under the government’s banking bailout, leaving a program that placed restrictions on their executive compensation and other spending. Northern Trust of Chicago repaid more than $1.5 billion after a hail of criticism from Capitol Hill over its lavish entertainment spending at a golf tournament in suburban Los Angeles. Goldman Sachs, Wells Fargo, JPMorgan Chase and Bank of America are among the biggest banks that have said they are aiming to return the government’s bailout money to avoid ceilings on executive pay.On April 19, the Obama administration outlined the conversion of banks bailouts payments to equity share holdings. Top economic advisers determined that the nation’s banking system could be shored up without having to ask Congress for more money in the immediate future. In a significant shift, White House and Treasury officials claimed what was left of the $700 billion financial bailout fund could be stretched further than they had expected a few months ago, simply by converting the government’s existing loans to the nation’s 19 biggest banks into common stock. The 19 big banks have received more than $140 billion from the Treasury’s financial rescue fund, and all of that has been in exchange for nonvoting preferred shares that pay an annual interest rate of about 5%. Converting those loans to common shares turned the federal aid into available capital for a bank — and gave the government a large ownership stake in return.While the option avoided a confrontation with Congressional leaders about putting more government money into distressed banks, it was nationalization through the back door since the government could become the largest shareholder in several of the largest banks. The Treasury had already negotiated this kind of conversion with Citigroup and had said it would consider doing the same with other banks if needed. The administration said in January that it would alter its arrangement with Citigroup by converting up to $25 billion of preferred stock, which is like a loan, to common stock, which represents equity. After the conversion, the Treasury would end up with about 36% of Citigroup’s common shares, which come with full voting rights. That would make the government Citigroup’s biggest shareholder, effectively nudging the government one step closer to nationalizing a major bank. Nationalization, or even just the hint of nationalization, is a politically explosive step that White House and Treasury officials have fought hard to avoid.Now the administration appeared to have adopted a policy of debt to equity to make up for any shortfall in capital that the big banks might confront in the near term. Taxpayers would be taking on more risk, because there is no way to know now what the common shares might be worth when it comes time for the government to sell them.Treasury officials estimated that they would have about $135 billion left after left after the Treasury completes its $100 billion plan to buy toxic assets from banks and after it uses $50 billion to help homeowners avoid foreclosure. In practice, it could be more than a year before the Treasury uses up the entire $100 billion in the toxic-asset programs and uses up the $50 billion budgeted for homeowners.But the biggest way to stretch funds could be to convert preferred shares to common stock, a strategy that the government seems prepared to use on a case-by-case basis.Ever since the Treasury agreed to restructure Citigroup’s loans, officials have made it clear that other banks could follow suit and convert their government loans to voting shares of common stock as well. But the nation’s banks are believed to need far more than that to maintain enough capital to absorb all their losses from soured mortgages and other loan defaults, such as commercial mortgages and credit cards.The Obama budget for 2010 includes $250 billion in additional spending to prop up the financial system. Because of the way the government accounts for such spending, the budget actually indicated that the Administration might ask Congress for as much as $750 billion. The most immediate expense of up to $75 billion came when federal bank regulators completed “stress tests” on the nation’s 19 biggest banks. The change to common stock would not require the government to contribute any additional cash, but it could increase the capital of big banks by more than $100 billion.By the Treasury becoming a major shareholder, and perhaps even the controlling shareholder, in some financial institutions could lead to increasingly difficult conflicts of interest for the government, as policy makers juggle broad economic objectives with the narrower responsibility to maximize the value of their bank shares on behalf of taxpayers.Those were the very kinds of conflicts that Treasury and Fed officials were trying to avoid when they first began injecting capital into banks in fall 2008.The effects of the TARP have been widely debated. The New York Times found that “few [banks] cited lending as a priority. An overwhelming majority saw the program as a no-strings-attached windfall that could be used to pay down debt, acquire other businesses or invest for the future.” The report cited several bank chairmen as stating that they had no intention of changing their lending practices to “accommodate the needs of the public sector” and that they viewed the money as available for strategic acquisitions in the future.

Roubini and Rogoff – Friday May 15 interview (excellent)

Old Paddy Stock Market…?Old Paddy was near death’s door, and his friends came over to visit him. He was feeling low, so the boys decided to cheer him up.They climbed up to his small attic room, and Mike said, “Will ya be going with us to the boat races this weekend? Ya look fit to row yourself.”They noticed his spirits pick up immediately, so Dan said, “Paddy, me boy, you’ll be back on the job so soon you’ll be wishing you were back here resting.”And Tom added, “You never looked better in your life, and you’ll be looking even better tomorrow.”Paddy’s spirits soared, and he felt better. They visited for a little while longer, then the boys started to leave. But Mike nearly hit his head on the doorframe. He stopped, felt the width of the frame, then said, “They’ll never get a coffin out o’ here.”

“Redefining ‘Wealthy’” By Jim McTague | Barron’s May 18, 2009Obama: For richer or poorer?WHO WILL BAIL OUT THE TAXPAYERS WHO are paying for all those bailout buckets? Contrary to fables told to gullible voters and journos by President Barack Obama and other Democrats, the rich didn’t enjoy a virtual tax holiday under George W. Bush. To the contrary, the share of the tax burden paid by households in the top 20% of U.S. income distribution — those with average pretax incomes of $248,400 — increased significantly between 2000, Bill Clinton’s last year as president, and 2006, the latest year for which reliable data is available. You will find this in an April report of the relatively neutral Congressional Budget Office. It was brought to our attention by Curtis Dubay of the Heritage Foundation, a conservative think tank.The Obama administration is preparing to tax the upper-crusties even more, justifying it as a form of retribution for the big breaks they allegedly received from Bush at the expense of middle-class and poorer folks. Dubay’s analysis of the CBO data finds that the top 20% of households in fact paid a record-high 86.3% of all taxes in 2006, versus 81.2% under Clinton.If Democrats increase the tax burden, they risk killing the golden geese.The bottom 20% of income earners saw their share of federal income taxes drop, from minus 1.6% in 2000 to minus 2.8% in 2006. (The figures are negative because many in the lower quintile pay no income taxes, but receive money from child tax and other credits.)Dubay says those who claim that the 5.1 percentage-point increase in tax share for high earners was due to sharp income increases are wrong. The top 20% saw pretax income rise from 54.8% of the total in 2000, to 55.7% in 2006 — 0.9 of a percentage point; the top 10%’s share of income rose from 40.6% to 41.6%. Dubay attributes this to the removal of a substantial number of low-income taxpayers from the rolls during the Bush years.WE HAVE NO HARD NUMBERS yet from the Internal Revenue Service for 2007 or 2008. But tax revenue is down, and the logical conclusion, assuming no big increase in the number of tax cheats, is that the rich actually are getting poorer, as a result of our Great Recession. At the same time, government spending is up, astronomically. Obama’s recession-fighting budget creates deficits stretching farther than the eye can see without the aid of a Hubble-type telescope. The White House estimates the annual deficit will be $1.84 trillion for the current federal fiscal year (which ends on Sept. 30) and $1.26 trillion for fiscal 2010. The deficit in fiscal 2008 was $459 billion.Dubay contends that shifting more of the tax burden onto high-income earners is dangerous. Those who pay little or no taxes don’t feel the pain of the high cost of big government, and so they are more inclined than taxpayers to clamor for more public services. This demand for a nanny state in turn drains more money from the top 20%; it is impossible for government to go on funding itself this way indefinitely.You don’t need a crystal ball to see where this is headed. Obama’s definition of “wealthy” will have to be revised downward to broaden the tax base in order to avoid bankrupting the nation. Otherwise, the rich and the poor — and everyone in between — will have hell to pay.

To add to this tax tragedy, Obama includes multibillionaires in his soak-the-rich propaganda so he can cream the households earning a pretax income of $248,400. These US billionaires should be in a separate category of their own. They probably pay zip on their Cayman Island fortunes, anyway, or no more than a 15% capital gains tax on whatever they’ve stashed in the good ol’ USA.Keeping in the framework of 2000 to 2006, its intereting to read “Billionaires are dime a dozen on Forbes rich list” written by Dan Glaister in Los Angeles on March 10, 2006 for the guardian.co.ukThere was good news for rich people yesterday, when an annual listing of the world’s billionaires showed there were more of them than ever.The 793 billionaires making the 2006 list published by Forbes magazine is an increase of 102 on last year. And the rich keep getting richer, with their total net worth up 18%. The combined value of their billions is put at $2.6 trillion, a fraction less than the US federal government’s entire budget proposal for next year.Microsoft chief Bill Gates maintains his position as the world’s richest man for the 12th consecutive year. His fortune is estimated at $50bn, a billion dollars for each year of his life. Behind him is Warren Buffett, 75, the American investment sage, with $42bn to his name.It was a good year for American billionaires. If you live in the US you are more likely to have a billionaire as a neighbour than anywhere else in the world. Of the almost 800 names on the list, 371 are from the US, an increase of 30 on last year.The next most favoured nation is Germany, home to 55 of Europe’s 196 billionaires. The favourite city of the ultra-rich is New York, where 40 of them live. London is home to 23.Ingvar Kamprad may not be a household name, but his Ikea home furnishing chain has given the 79-year-old Swede a net worth of $28bn, ranking him fourth richest, just behind Mexican telecom entrepreneur Carlos Slim Helu’s $30bn.While there are no British rich in the top 10, an honorary Brit is at number 11: Roman Abramovich. The Chelsea owner’s estimated value is $18.2bn.Highest ranking British billionaires are Philip and Cristina Green, owners of the Arcadia retail empire which includes Bhs and TopShop, whose estimated net worth of $7bn makes them the 74th richest. They are followed by Telegraph owners David and Frederick Barclay with $2.8bn, the same as Richard Branson.James Dyson, a Brit who moved his vacuum cleaner operation overseas, ranks 746th with $1bn, alongside Harry Potter author JK Rowling and formula one motor racing magnate Bernie Ecclestone.There are 78 women on the list, 10 up on last year. But the youngest person on the list is a woman, Hind Hariri, 22, daughter of the assassinated prime minister of Lebanon, who inherited her father’s $1.4bn.Top 10 (2006)1 Bill Gates, US, worth $50bn (IT)2 Warren Buffett, US, $42bn (finance)3 Carlos Slim Helu, Mexico, $30bn (telecoms)4 Ingvar Kamprad, Sweden, $28bn (retail)5 Lakshmi Mittal, India, $23.5bn (steel)6 Paul Allen, US, $22bn (IT/investment)7 Bernard Arnault, France, $21.5bn (luxury goods)8 Prince Alwaleed bin Talal Alsaud, Saudi Arabia, $20bn (investment)9 Kenneth Thomson, Canada, $19.6bn (publishing)10 Li Ka-shing, Hong Kong, $18.8bn (diversified investment).http://www.guardian.co.uk/world/2006/mar/10/danglaister.mainsectionAnd get this, the fact that Forbes 2009 list ranks David Rockefeller Sr. at #305 with a net worth of only $2.2 billion in “The World’s Billionaires” shows you something is very wrong.* 03.11.09, 06:00 PM EST*For billionaires with publicly traded fortunes, net worths were calculated using share prices and exchange rates from February 13, 2009.”http://www.forbes.com/lists/2009/10/billionaires-2009-richest-people_David-Rockefeller-Sr_MJ03.html

A profitable company is a successful company this is the prevailing(bogus) logic that is destroying our economy, so naturally the solution is to downsize cut back and make the companies even more efficient. Everything to a tee is happening like Marx said it would.

They are both a lot rosier than commenters on this blog. I didn’t find it very interesting and I found Rogoff insipid (is he too comfortable at Harvard?). It’s time for Nouriel to get back on his prediction horse and give us 12 more predictions. He either knows a lot more than anyone else and can see what we regard as economic devastation as just a temporary blip or he has lost his touch and has been soft-pedaling for whatever reason. Loss of economic growth of 50 basis points seems absurd given what people like PeteCA and MM CA have been saying, as well as others. Perhaps Nouriel has been read the riot act by the likes of Summers? After all he is a big star nowadays and people worldwide read his blog. Since most of the people seem to think that Obama is acting under duress, why can’t that be the case with Nouriel? Personally, I think Obama is more cynical than we give him credit for. Besides, he was a professor of law at Chicago, home of arch-conservatives both in econmics (Friedman) and law (Posner).

Excellent, economicminor! Your rhetoric is worthy of an ancient Greek or Roman orator, and you brilliantly combined the bones of the argument with the hot flesh of the anger. The number of Amercians who see how their “representatives” (and apparently their new President) are so obviously owned by the banksters *will* reach a tipping point. It will be enough for middle-class Americans to become unhinged, and that in itself will arouse the usual bunch of trouble-makers elsewhere in the various strata of our society. Gore Vidal always told us that the real owners of America viewed the presidency as simply part of the plumbing, and President Obama certainly helping Goldman Sachs et alia to “flush” us all down the toilet

[warning: a heartless conspiracy theory follows]The conspiracy theory is that perhaps H1N1 came because the government(s) realized that they cannot solve the unemployment problem but that it will simply keep getting worse. Instead of attempting to creating more jobs, they decided to reduce the amount of job-seekers…or something along those lines.Swine Flu May Be Human Error; WHO Investigates Claim

The World Health Organization is investigating a claim by an Australian researcher that the swine flu virus circling the globe may have been created as a result of human error.Adrian Gibbs, 75, who collaborated on research that led to the development of Roche Holding AG’s Tamiflu drug, said in an interview that he intends to publish a report suggesting the new strain may have accidentally evolved in eggs scientists use to grow viruses and drugmakers use to make vaccines. Gibbs said he came to his conclusion as part of an effort to trace the virus’s origins by analyzing its genetic blueprint.“One of the simplest explanations is that it’s a laboratory escape,” Gibbs said in an interview with Bloomberg Television today. “But there are lots of others.”…Gibbs and two colleagues analyzed the publicly available sequences of hundreds of amino acids coded by each of the flu virus’s eight genes. He said he aims to submit his three-page paper today for publication in a medical journal.

(source: http://www.bloomberg.com/apps/news?pid=20601087&sid=a8cXPBDSbUeo&refer=home)

ATTENTION: SPAM sales continue strongA few years back, when those on this thread wrote about the coming disaster with rare foresight, I proposed investing in Hormel stock as SPAM sales were a certain beneficiary of hard times. Guess what? Hormel’s revenues continue to grow strongly, up 6 percent in the most recent quarter. SPAM may be mystery meat, but it keeps indefinitely, can be used flexibly to supplement any meal, and it remains a favourite comfort food of a lot of people who won’t publish the fact.Chocolate and condom sales are also rising, so it’s clearly not all doom out there. Hard times?Bullion coins, seeds and guns are selling well too. Traditional hedges in uncertain times: gold, land and lead.http://www.youtube.com/watch?v=zjqZ0aIAgFM

yup, the anthrax was definitely an inside job. And the “suicide” of that one scientist (if it now was a real suicide as it could have been arranged by someone, perhaps the same character behind the suicide of that one D.C. “madame” with supposed ties to Dick Cheney) provided of course a convenient end to the investigation.It is weird that Obama has not started a proper 9/11 investigation, after all when there is so much evidence for that not having been a terrorist attack in the first place (but rather an “inside” job with explosives).But a couple of questions about what you write:A. what US-owned pig farm in Mexico is that?B. what company are you referring to, with a farm in North Carolina?Do you have any URLs from where to find more info on this?Thanks!

Your earlier comments forced me face the fact that we are experiencing an economic doldrum, but soon the winds will pick up.So LB, are you a “prepper”? http://www.survivalblog.com/ I know over the last two years I have become one.Are you taking concrete steps to protect your family or just thinking about it? I am sort of half-prepared; I have yet to make significant investments to begin down that road.BTW, did you give up (sell) the boat with the move from London?

I don’t buy the “50 basis points” either, not unless the government keeps cooking the numbers. I call this a truncation error on the Professor’s part, perhaps brought on by his mood swing into economic la la land.

For all the esteemed professional nonsense let me boil this down for you, the oligarch class has hijacked our government and pursued an agenda of higher profits at the expense of workers they are relentless in this campaign and even in light of this economic calamity are still full steam ahead with little objection. The general population is not smart enough to realize what’s really happening and guys like Roubini are really mouth pieces for the ruling class used to obfuscate the real causes with jargon like quantitative easing and subprime/credit crisis etc. The credit crisis like Roubini and so many others that have focused on almost entirely misses the point, the easy credit was a mind numbing sedative to ease the population while the oligarch’s pillaged and exported industry. Don’t look for fancy answers the truth is starring you right in the face you have been sold out by an elitists class who brilliantly confused you with Laissez faire demagoguery. The masses still cling to Rush Limbaugh, Sean Hannity neo-con neo-lib lies. For all the differences they claim Obama is from the very same establishment ie. gut labor and increase efficiency/profits for share holders ignore the long term consequences. 99.9% of the countries population believes a profitable company is great for the economy but without context it’s a meaningless claim. Profit for shareholders can just as easily mean slavery as it does capitalism – this is the biggest lie we’ve ever been told.

Guest – America is facing a future where there is a collapse in real wages (wages adjusted for inflation). The Fed and the Gov’t are trying to hide this fact, by inflating the h*** out of the system. At least, that is their goal. But of course American households will not feel like they are getting ahead – in fact we will feel more like we are falling behind.The trends are visible in many places. Some US companies are closing down plants in northern states, and re-building them in southern states. Why? Because the South is not unionized. The so-called “right to work” states have avoided union labor, and are now attracting more industries within America. But if you talk to people who have actually worked in those factories – you get a very different opinion. Workers feel burned or cheated … because wages are lower or compensation packages (incl. health care) are much reduced.America is shifting into lower gear. The Chinese are maintaining a stranglehold on our economy through their low wage costs and their peg to the US dollar. Someone here recently referred to this as the “deadly embrace”. Not a bad name. Putting aside the very real issues of lower wages … America faces a huge issue about restoring competitiveness.PeteCA

Is that a tube of Spam filling your chocolate condom OR are you just happy to see me (:<D) ?

Shifting into lower gear: Maybe.It may be smarter to steer in a different direction, put it into higher gear, and stomp on the gas.I’d like to make a few points:a. Almost every American breathing knows that much of what gets sold at Walmart comes from abroad, andb. We know our jobs are moving abroad to produce the goods we buy at Walmartc. Walmart sales are increasing, andd. Walmart is America’s dominant retailerWhile it’s really lots of fun to bash the “elitists” that “sent our jobs abroad”, who buys at Walmart? I assure you, it ain’t the elites. And who holds all that Walmart stock? Only the elites, right?It doesn’t help much to vilify one subset of a society that shot itself in the foot. We shot ourselves in the foot, and there are precious few of us that don’t have gunpowder residue on our cuffs.I know a lot of people come to this site to vent their self-righteous indignation. I sure do. But the hard work is to determine what the next moves are.Using guns and gold and land as a long-term survival strategy doesn’t make too much sense to me. Why? Simple. In an advanced economy, less than 5% of our population can feed everyone else. What are the other 95% going to trade for food? Oh, OK, we’re all going to grow food (very labor intensive, and you’d be competing with the most efficient food delivery system ever created anywhere). So, once you spend all your time inefficiently growing food, what are you going to trade for…power, communications, health care, education, and housing? The stuff you need to run your household? Get real.So why bother with a gun? The place is awash in food. We give it away, we feed most of it to animals (yup, we do), and we convert the rest into excess carbs to fatten ourselves upon.That Labor Shock article we wrote tells a pretty strong story about the future value of labor. The fix is in, folks. So the question on the table is “if ya can’t sell labor, then what?”. BTW, almost everyone in an advanced economy sells labor.The work before us is to devise the basis of the next economy. The sooner we get it done, the shallower the “U”.Changed direction yet? Or still grumbling and blame-laying?

agree: When one has gained tremendous respect by standing far out on the “economic limb” and correctly predicting this financial meltdown, the natural tendency is to protect that respect by moving in a little closer to the trunk of the tree so as not to fall all the way down to the bottom; hence, more conservative estimates.

You miss England and we miss you. To paraphrase that old Eddie Fisher, “If we ever needed you, we need you now.” And no “perhaps” about it!

OBway,What sustainable business model do you have that does not outsource labor? Because as the saying goes, “Anything you can do at your desk on a computer can be done somewhere else in the world for less.” The “at your desk on a computer” applies to lab work (think drug discovery and development), engineering, tax return preparation, legal research, journalism, etc.

…Americans who are losing faith in their Gov’t…The American culture has also glorified patriotism for a very long time.But patriotism is founded in a strong faith in ones own government.And strong faith cannot exist without trust.

@OB you commented above”While it’s really lots of fun to bash the “elitists” that “sent our jobs abroad”, who buys at Walmart? I assure you, it ain’t the elites. And who holds all that Walmart stock? Only the elites, right?I wonder how many Walmart customers were able to connect the dots that the $85 bike they purchased in 1988 would contribute to the closing of the Schwinn bicycle plant in Greenville, MS 3 years later and lead to the company’s bankruptcy 3 years after that in 1993.I wonder as well how many shareholders and managers realized that their decision to try an survive by sourcing $1/hour Asian labor would come back and bite them in the form of unemployment a few years later. No doubt the Schwinn family made mistakes as the market for American made bicycles changed but it seems they realized that keeping jobs in America was important even though that decision ultimately sealed their fate.(from the linked article)

“(the) family’s dogged but ultimately flawed determination to stay American-made contributed to its doom. The Schwinn factory jobs paid what in today’s dollars would be around the national average of $17 an hour, with benefits — the kind of job that has been getting increasingly difficult to find. Many jobs disappear because their products or services become obsolete — think buggy whips — but the world still needs bicycle makers. Just not many American ones.”

It can be argued that it’s all water under the bridge and that to try and protect jobs in America that can be performed by $1/hour workers overseas is not only protectionist but idealistic.The Schwinn example, in terms of direct employment impacted, for the most part, low skilled jobs albeit at $17/1990 dollar with benefits. But it’s not only low skilled jobs that are at stake e.g. H-1B visas etc. The following is a real time case study of the outsourcing of skilled jobs to lower cost locations (in this case India):

“Walid Hejazi, an international business professor at the Rotman School of Management at the University of Toronto, said the McCain Foods outsourcing plan is likely a smart strategy in the face of growing global competition.Given the efforts at decreasing trade barriers between the EU and Canada, now may be the ideal time for McCain to enhance its global competitiveness, he said.Hejazi said there have been major outsourcing moves by North American firms in manufacturing as well as back office functions to offshore locations such as India and China.While manufacturing has been going to China, financial services, customer service and IT jobs have been flowing to India.”English is an official language in India, so they’re able to communicate back and forth.” he said. “Given the IT infrastructure in place in India it’s pretty easy to communicate with people over there.” Financial services and accounting represents an “enormous” and growing opportunity for India, said Hejazi.”Often people will think only the big, giant multinationals are the ones that are going to India but increasingly as the infrastructure is in place you can put smaller-scale types of activities in place,” he said.The accounting outsourcing plan announced by McCain may be precursor to other efforts, Hejazi added.”One strategy that companies are often advised to pursue is to get their toes wet. It’s a possibility “¦ that they’re just getting everything set to do more.” link

Coming to a location somewhere in the world that offers skilled labor at a low cost an HP Global Business Services Center and it’s not just IT, in fact much much more, read on from the HP brochure:

With a committed, talented and motivated workforcespread around the world, HP is a partner in outsourcedbusiness processes for many high-profile customers.We serve a broad range of industries, with a specialfocus on the financial services, consumer packagedgoods, manufacturing (primarily auto and high tech),and pharmaceutical industries.Our customers include Procter & Gamble, Philips, Aventis,ThyssenKrupp, Celanese, Clariant and other world-classcompanies. For these customers, we provide a broadrange of business services—from procurement support tofinance and accounting services to processing of payrollHR administration.

I wonder how many highly skilled professionals are connecting the dots and realize that like the low skilled staff at Schwinn, they may be next.You state:”c. bring our trading partners’ income levels up to the advanced economy’s (this is the long-term solution, and it is just a globalized version of (b)”That is wonderful sentiment, I am sure the professional accountant who lives in a tin roofed shanty in Chennai looks forward to that day – only problem is that HP who is the employer (outsourcing host) has no incentive to increase their wages to US standards, nor does the American company that pays HP. In fact the opposite is more likely to happen.To end on a completely cynical note I think you are missing a step in the list above of the “new rules / mission”.”e. be prepared to have your work outsourced”

Hayes – Nice post.I don’t see your ending as terribly cynical. It seems realistic to me, particularly in the short run; it’s much more likely that advanced economy wages will fall than developing wages will rise, but rise they will, but only some.Then automation, which we also discuss in our Labor Shock article, will tend to cap how high wages can rise.Advanced economy labor needs to really get the thinking and adapting in gear. There aren’t that many more months, maybe at best a few years, of maneuvering room.That’s the bad news.The good news is that we (advanced economy labor) have the information and the tools to adapt first and best. Some of us will use those tools. I plan to, certainly. That’s why I wanted to be on the team that builds them.

a pair of brilliant posts by ZHSaturday, May 16, 2009The Exuberance Glut Or The Dollar-Euro Short Squeeze Race link Sunday, May 17, 2009Chasing The Shadow Of Money link

Treasuries Advance as Stocks Fall, Fed Prepares to Buy DebtMay 18 (Bloomberg) — Treasuries rose, adding to last week’s gain, as Asian stocks extended losses and the Federal Reserve prepared to buy 10-year notes today.Benchmark 10-year yields will fall about 40 basis points by mid-year and the U.S. economic recovery may stall, according to a report from Goldman Sachs Group Inc., one of the 16 primary dealers that trade directly with the Fed. The central bank also plans to buy Treasuries on May 20 and May 21 as part of its plan to cap borrowing costs and combat the steepest U.S. recession in 50 years.“The economy is still in trouble,” said Takashi Yamamoto, chief trader in Singapore at Mitsubishi UFJ Trust & Banking Corp., part of Japan’s biggest bank. “Yields will go down.”The yield on the 10-year note fell three basis points to 3.11 percent as of 10:10 a.m. in Tokyo, according to data compiled by Bloomberg. The price of the 3.125 percent security maturing May 2019 gained 1/4, or $2.50 per $1,000 face amount, to 100 1/8. A basis point is 0.01 percentage point.Ten-year yields declined 15 basis points last week, as prices posted the first seven-day gain since the period that ended March 20.The MSCI Asia Pacific Index of regional shares dropped 1.6 percent today, after the Standard & Poor’s 500 Index slid 1.1 percent on May 15, helping fuel demand for the relative safety of government debt.Fed Buying NotesThe Fed plans to purchase notes due from August 2019 to February 2026, according to its Web site.It is scheduled to buy securities maturing from February 2016 to May 2019 on May 20 and from September 2013 to February 2016 on May 21 as part of its plans to cap borrowing costs.Ten-year yields will fall to 2.7 percent by June 30, Goldman said in a report May 15 written by economists including Ed McKelvey in New York.“We worry that the recovery could stall in 2010,” the economists wrote.Fund managers became more bearish on the outlook for Treasuries through the end of the year, a survey by Ried, Thunberg & Co. shows. The company’s sentiment index dropped to 40 for the seven days ended May 15 from 42 the week before. A reading below 50 means investors expect prices to fall. The economic analysis firm in Jersey City, New Jersey, surveyed 26 investors controlling $1.41 trillion.Longer-maturity Treasuries rose last week as the highest yields since November lured investors to the safety of government debt amid a pause in the Treasury’s record pace of debt sales.‘No Real Supply’“You have a two-week period with no real supply except the bills and some good attractive yields,” said Thomas Roth, head of U.S. government-bond trading in New York at Dresdner Kleinwort, one of 16 primary dealers required to bid at Treasury auctions. “People were willing to buy some paper.”The 30-year bond yield touched a 2009 high of 4.357 percent on May 8.The Treasury’s next round of auctions begins on May 26 with sales of two-, five- and seven-year securities over three consecutive days.http://www.bloomberg.com/apps/news?pid=20601087&sid=aBII6SLy_WFs&refer=home

Gil Scott-Heron said the revolution will not be televised. One wonders is the swift implosion has already occurred, but has not been televised. Maybe we are all walking around keeping a brave face while we wait for new orders or something.

Can I interest anyone in some repeated and boring reality and common sense?:From Steve Keen.”Conventional economics not only completely failed to anticipate this calamity, but actively if unconsciously aided its growth by promoting deregulation of finance, by the development of financial derivatives, and via rescues of the financial system that simply encouraged its Ponzi behaviour to scale heights that poor old Charles Ponzi could only have dreamed of.”"If economics were in any sense a science, this dramatic failure would lead to a period of soul searching and intellectual forment from which would emerge a more empirically grounded vision. But with the essentially unscientific nature of economics, this development is unlikely unless enormous pressure is brought to bear on academic economics departments by their students, by business groups, unions, and community groups–in short by anyone whose welfare is affected by the economy.”http://www.debtdeflation.com/blogs/2009/05/16/economics-students-join-toxic-textbooks/Ho hum

via BPJoseph Cassano: the man with the trillion-dollar price on his headThis is Joseph Cassano. He is the multimillionaire trader accused of bringing down the insurance giant AIG — and with it the world’s economy. So is he a criminal, an incompetent or a scapegoat?Sunday Times (London)May 17, 2009excerpt:”here is, however, an alternative reading. This says that the furore over bonuses is a convenient distraction from the real causes of the crisis, which go to the heart of how the world is run. There is dishonesty in this collapse, on a scale that is almost too vast to comprehend. There are conflicts of interest in American finance and politics that make our own, dear House of Lords look like beginners. There are frauds so large, and so long-standing, that it can be hard to see them for what they are. And all these things were allowed to thrive in an intellectual atmosphere that tolerated no dissent. This reading is optimistic for those who believe in free markets, even if it is pessimistic for the US. “Capitalism has not failed,” says Bernard-Henri Lévy, the French philo-sopher. “We have failed capitalism.”http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6281953.ece

So what are the dealers supposed to do? Dig up the lots and plant corn for ethanol? I don’t think so. They’ll sell Toyotas, Hondas, etc., and no doubt the new Truck lines these companies are launching to capitalise on the fact that this is the one growth area in vehicle sales.Yep, how’s that GM & Chrysler restructuring working for you, Mr. O?

I have a clear conscious … I find a few good Vodka Martinis help with that.

Banker Pay May Escape Obama Caps as Wall Street Eyes GuidelinesMay 18 (Bloomberg) — Wall Street expects the U.S. to loosen compensation caps for banks that received taxpayer aid, three months after Merrill Lynch & Co.’s $3.6 billion in bonuses drove Congress to impose them, according to executives at four of the country’s biggest financial firms.Lenders such as Citigroup Inc. and Bank of America Corp. that obtained money from the Troubled Asset Relief Program have been waiting since February for Treasury Department guidance on capping bonuses for their 25 highest-paid employees. Speaking on condition of anonymity, the four executives said they expect the Obama administration may seek to substitute guidelines or otherwise ease the mandatory limits.http://www.bloomberg.com/apps/news?pid=20601087&sid=aVrYgD5NiwuM&refer=home

Last night! CBS 60 minutes had the most uninformative piece on AIG that I have ever seen. Steve Kroft was soft balling CEO Liddy. No questions about his conflict of interest in AIG bailing out Goldman Sachs by paying the CDS at par when he is a Goldman Sachs shareholder!Liddy is working for a dollar a year was mentioned 20 times and the thrust of the story was how nice this man is. The corporate media should turn in their professional journalism cards. They are Public Relations Ambassadors for the Power Elite. There is no journalism anymore, the corporate journalists are all public relations hacks. Democracy cannot exist without a real mainstream press. I submit to you that we better realize that Democracy has not been here for a while. We have a soft fascist state! A very clever and stealthy fascist state with a pecking hierarchy that has the banksters at the top. The next echelon is the military. The next echelon is the Global Corporations that are facilitating the eviceration of the middle class in all countries byharmonizing labor wages down to subsistence and procreation. The result will be DEBT PEONAGE, MINIMAL SUBSISTENCE, AND PROCREATION TO HAVE NEW VICTIMS. Weneed to wake up and smell the virtual chains around our necks.

And Obama proposes a tax hit on couples with taxable incomes starting at about $235,000–the “rich,” while most bankers pay only the 15% capital gains.

Amen, and pass the ammunition.

LB… nice to hear from you.I’m just saying hello.Hope all is well.RM/MA

“The Decline and Fall of the Globalist Empire” by Joe SchembrieMay 18, 2009–Globalism preaches international trade promoted by government intervention. Establishment economists prophesy that Globalism is the Future. Libertarians are told not to complain, because Globalism merely facilitates the natural evolution of the free market.Libertarians must question these claims.If Globalism brings universal prosperity, why are so many national economies burdened with crushing debt? Why have millions of middle-class Americans lost their jobs to overseas competition? Why is the global economy in the worst economic crisis in history?These are typically leftist-populist complaints that blame the free market, but maybe it’s time that libertarians questioned the premise of the debate. Is Globalism a genuine manifestation of the free market, or just another guise for government intervention?That answer is easy. Just look at the expanse of public institutions required to support Globalism: the World Bank, the International Monetary Fund, NAFTA, the European Union, the G-Pick-a-Number Summits, and the not-so-hidden hand of the Federal Reserve – with the United States Armed Forces aggressively acting as World Policeman.Globalism is simply imperialism with a “progressive” face, and the unmasking of its hypocrisy is why it’s failing – and why the real world is turning once more to economic life on a more personal, localized level.Globalism’s failure has become glaring with the collapse of the world financial system. The central bankers promised stability but have wrought a planet-wide inflationary bubble instead.Now the world’s finance ministries are seeing that global bubbles lead only to global crashes, and any nation which breaks inflationary ranks to independently pursue sound monetary policies will escape destruction and prosper as investors rush to its door. Globalism’s centerpiece ideology of central banking may survive this crisis, but it can no longer pretend superiority over localism.Nonetheless, still in denial, Globalists are attempting to salvage the dollar as world reserve currency. Technology itself is working against them, however. Today the dollar is used as world reserve currency only because oil is traded exclusively in dollars, an unnatural but quite intentional consequence of US military occupation and intimidation of oil producing nations. In the future, alternative energy sources will render the oil economy obsolete, and the reign of the petrodollar will follow into extinction.Indeed, someday archaeologists will marvel at the abandoned artifacts of our globe-straddling oil economy – the derricks, pipelines, tankers, refineries, power plants, and distribution networks of gas stations that will rust across the landscape as the ruins of a lost empire. Instead of relying on a global supply chain maintained at gunpoint to meet their energy needs, future households will simply plug into their rooftop solar panels.That will be localism’s technological deathblow to Globalism. And good riddance, for Big Oil has caused enough human misery through its imperialist wars and puppet tyrannies to rival the evils of the slave trade.Yet Globalists bemoan the passing of the petrodollar, claiming that nothing can effectively take the dollar’s place as an international medium of exchange. Of course there is gold, but the Globalists despise gold because it won’t allow them to inflate.Also, unlike fiat currencies, gold doesn’t require the bureaucratic overhead of a lavishly subsidized aristocracy of pseudoexperts – bureaucrats, academics, consultants, lobbyists, militarists, quasi-public corporate executives, etc. – to sustain the illusion of intrinsic value. Unlike Globalism’s Special Drawing Rights, which are accessible only to an arcane priesthood of financial technocrats, the international gold standard can be accessed by any ordinary person who visits a neighborhood coin shop.With the restoration of gold as the primary medium of international exchange, Globalism once again falls to localism – because that’s what the market wants.Globalism’s vision of a world forced to be hyperdependent on dollar-denominated international trade is doomed, if only because the Chinese won’t take IOUs forever. The future will still have international trade – tourists will still go to Europe and bananas will still come from South America – but once the dollar devalues, the practice of dispatching freighters halfway around the globe to fetch tee-shirts and running shoes will cease to be cost-effective. Globalists may then suffer unemployment, but millions of middle class Americans will benefit when manufacturing jobs come home.To bring manufacturing back to America, we don’t need tariffs. We need to end the Globalist interventionist policies that distort economic incentives into driving away the bulk of our manufacturing base.When the Globalist Dollar Bubble has its final pop, there will be hard times. But then the economies of the world will at last be able to evolve naturally in accordance with true free market principles. And on more local foundations, we can build a genuine prosperity to celebrate the end of the Globalist Empire.http://lewrockwell.com/schembrie/schembrie14.html

All brought to you by exponential growth… At EVERY opportunity debunk the myths that growth is good!Mark

excellent article in pointing out the true motives, methods, results and flaws of globalization, dollar-denominated international trade, fiat currency and imperialism.

Do people demand a really just system? Well, we’ll arrange it so that they’ll be satisfied with one that’s a little less unjust … They want a revolution, and we’ll give them reforms — lots of reforms; we’ll drown them in reforms. Or rather, we’ll drown them in promises of reforms, because we’ll never give them real ones either!!- DARIO FO, Accidental Death of an AnarchistMark

Just who is behind the “upward push?”The average citizen ??

It’s got more to do with a reversion from growth, which is the result of resource depletion (and environmental degradation).Mark

And the MSM won’t allow anything that isn’t already recognized as profiting the elites- it’s the game.Mark

If wages don’t rise, there is no sustainability.Growth ISN’T sustainable people!2/3rds of the world’s population lives on $3/day or less. If the world’s resources are in decline there is NO way that there is going to be an increase in wages.Going down…Mark

From the Las Vegas Review-Journal“If All We Get Is a Circus, Can’t We at Least Have Trained Seals and Bears on Unicycle” by Vin Suprynowicz – excerpt May 18, 2009—Pardon a little adult intervention into this zillion-dollar equivalent of a kids’ birthday party, but pony rides, paper hats, and hiring people to slap solar panels on the roofs of rural outhouses and fire stations only just barely qualify as “creating jobs.”Real jobs involve producing something that consumers – either here or abroad, among our trading partners – want and will voluntarily pay for. There’s no reason to believe one-time desert make-work schemes, building things no one would voluntarily buy, will “buoy” the economy any better now than when FDR tried the same thing with his 1930s “Civilian Conservation Corps” – keeping men dependent on the government and thus stretching the Great Depression by an extra seven years.What is any newly trained “outhouse solarizer” going to do when you run out of BLM outhouses?Meantime, the money to fund this brain-dead scheme was or will be looted from the bank account of a private entrepreneur who might have put the same guys to work building some new invention that people would actually, voluntarily, you know … buy.This nation is in an economic whirlpool. Wasting precious tax money – looted mostly from the proprietors and remaining employees of small businesses now hanging on by their fingernails – on the green dreams of Mr. Obama and his ivory tower academics would be hilarious, if real Americans weren’t hurting – and wondering what their tax bills will look like by 2011.Here’s a better idea: The BLM manages nearly 260 million acres of land, largely concentrated in a dozen Western states. But the Constitution says that (leaving aside the District of Columbia) within the several states, the federal government shall have plenary authority over only such lands as shall be needed to construct “Forts, Magazines, dock-Yards and other needful Buildings,” and which shall have been “purchased by the consent of the Legislature of the State in which the Same shall be.”The BLM can show no bills of sale for the vast majority of these lands. They have never purchased these lands, nor even sought state legislative approval to do so.They do not own them. Let them turn over those 260 million acres – a whopping 85 percent of the state, in Nevada’s case – to the governments of the respective states in which they lie, and go home to Washington City.The states could then sell off these lands (using the proceeds to eliminate all taxes on their people for decades), or open them to homesteading by citizens, as they see fit.It would sure be a lot more “stimulating” to the economy than looting money from the pockets of struggling Americans to create short-term employment for $30-an-hour construction workers and a few favored contractors, retrofitting solar outhouses.That’s hilarious.Clap your hands, now. Honk honk.Vin Suprynowicz is assistant editorial page editor of the daily Las Vegas Review-Journal.http://www.lewrockwell.com/suprynowicz/suprynowicz129.html

Someone posted this recently. It bears repeating, as it speaks to this whole notion of “serving” the “country.”http://www.nytimes.com/2009/05/14/us/14explorers.html?_r=4&hpMark

I’ll see you “liquidity” and raise you “reality” (physical resources). In the end this all fails, Mother Nature bats last!Mark

I’d say that you’re pretty much on.The grassroot level populacedoes not have the moneyto support the financial institutions.Change “money” to “energy” and THEN you’ll have it. Life and its functioning is all about energy.Mark

Is Durden is on a similar path to El-Erian citing the PIMCO piece that you (Hayes)linked previously.

It is difficult to predict at what point we will reach the dollar/euro inflection point. As the QE results imply, the Fed is running out of arrows to even manipulate the first two tiers of the liquidity pyramid, and as deflation accelerates, it is very feasible that the dollar’s appreciation will soon be limited. One thing that is certain, is that market participants will soon move from focusing on dollar claims to those denominated in euros, leading to a squeeze in the euro (granted of less violence and strength than the dollar’s).

Mark,I tried to access this before, but the NYTimes has a login wall. If you can provide a title or key words, one can access the article through Google news.Thanks

Tsunami of FED liquidity propel market higher and higher.

Congrats bulls. Massive bull market going on. Fund managers are afraid to be left behind. Buy in May and go away!!! :pLong and strong

economics is a social science, and by social, I mean “soft”, and by “soft”, I mean “not really science”.To be a scientist is to be God-like in the post-modern world. Who can blame the economists for wanting to grab some of the glory?

The moral hazard created by the Fed and the government is going to be terrible. All the levered bettors are smiling with satisfaction on this bailout. Everyone who needed to bailed out got bailed out.Banks – Bailed outBrokers – Bailed outInsurers – Bailed outHomeowners – Bailed outNon-Financial Companies – Bailed outCredit card Maxer – Bailed outDon’t think that anyone of the above will learn any lesson anytime soon. I was recently talking to one of my old acquaintance – She is maxing out on her credit card, getting a new card to roll over her debt. She has a few hundred dollars in the bank and she’s flying out to Paris for a vacation.The real losers out of this crises is the savers, the penny pinchers and the frugal. It’s clear to me that the current system rewards leverage, risk takers and profligates. Not only they live a lavish lifestyle, the government is always there to turn to.At some point in the future the world will refuse to allow this lavishness of Americans, but that day is probably decades away. Till then, eat drink and make merry. The government is everyone’s insurance.

The whole system of fractional reserve lending is designed to punish the savers from its very inception. The wealthy know loans are never to be paid back the poor people do the responsible thing and try paying back their loans. If you don’t game the system you lose.

The author is basically saying we all should suffer until the rest of the worlds population is on par with us (impossible). Another idealists who has no problem watching families suffer to prove his religion and false ideology that will never work anyway.

yes(because of green ink used in printing)start with $ bill. Good Luck

so have you join the party? i did. cant always listen to Dr. Doom and miss out this impressive rally. rally is a rally, even if it might be a bull trap rally. may be it will be mirage turn into something real. dont fight the FED and trend. shorts were pathetic.

Mark:We have a surplus of housing. True or false?The Sun lavishes on the U.S., every day, over 10,000 times our daily energy consumption, all sources, all uses. True or false?Most of the U.S.’ grain production is fed to animals. True or false?We have a shortage of thinking, and not a shortage of materials. True or false?About guns: I don’t think any meaningful solutions will be produced by guns. Most people don’t feed themselves via their guns, they use guns to intimidate others, or to ward off intimidation from others. In either case, it’s a poor use of human capacity. I am not real big on guns. I do hunt, and I eat what I kill.Next: I did watch Dr. Albert Bartlett’s video, many months ago. I believe in response to one of your posts, and I thank you for it. I also recommend it to other readers. It’s very useful information.Let’s get to the main show. Why do you think our “solution” is a “BIG-SOLUTION” solution? What do you know of the solution we propose? Can you spell it out?Please do, and give the readers a precise answer as to what’s “big” about it, and why such “bigness” is somehow “badness”.

Dear guest, I refrain from using terms like socialism as they can have 100 different meanings to a 100 different people. The issue I raise is the foolishness of running an economy based on continued growth year after year in a world of finite resources. As an example, we have known since the 1970s that oil is a limited resource and as its scarcity and demand increases prices will continue to rise; shall we wait until it reaches $10 per gallon before we take serious action? The super rich can afford $100 per gallon but the rest of us can’t!We can go to war on a moment’s notice, remove a dictator from power in 3 months, control world trade, land on Mars, but we can’t come up with a more efficient energy source? Let us not deceive ourselves; the only reason we are all still addicted to oil is because it is the most powerful political and profit making weapon we’ve got. As to your comment of “capitalism with zero growth rate”, have you checked your local bank to see what interest they pay on a savings account or a CD-perhaps 0.25-0.5%. It seems a nearly 0 interest (growth) rate for the masses is absolutely fine but for the billionaires it’s totally unacceptable as even several billion dollars is not enough for them. Additionally, China has realized the potential catastrophic implications of uncontrollable growth and limits families to 1 child. Do we really want to wait until growth is out of control that we MUST resort to draconian measures? I’m sorry my friend, but addressing the effects of growth remain at the core of constructing any sustainable system.

Why? What would be the point?

You do realize you’re talking socialism? Capitalism with zero growth rate…?For crying out loud, when are we ever going to get past these idiotic labels?No, he said nothing of the sort.Capitalism’s growth WILL stall. We live on a finite planet. Nothing socialistic about that! Just facts!Note to Outerbeltway: as much as I admire your attempts (and I believe they are better than those being undertaken by the ruling elite), comments such as by Guest here point out why it’s highly unlikely we’d be able to introduce any viable course change.Mark

knowledge can collapse the waveform and create reality,or love, or faith; depending on your orientation , i suppose,however, this may be a solitary personal experience.but the question arises.. does not the child give birth to themother as well as the mother giving birth to the child, as inreality giving birth to knowledge and visa versa. there is aunity or fundamental connection or sameness..so what is the purpose of this latest market activity?whose heart, body and mind does it serve and on what will itfeed? i heard celente call it the bailout bubble..Gerald Celente Trends Alert – The “Bailout Bubble” – The Bubble to End All BubblesCELENTE_Gerald Kingston, NY — The biggest financial bubble in history is being inflated in plain sight, said Gerald Celente, Director of The Trends Research Institute. “This is the Mother of All Bubbles, and when it explodes,” Celente warns, “it will signal the end to the boom/bust cycle that has characterized economic activity throughout the developed world.”Either unwilling or unable to call the bubble by its proper name, the media, Washington and Wall Street describe the stupendous government expenditures on rescue packages, stimulus plans, buyouts and takeovers as emergency measures needed to salvage the severely damaged economy.”All of this terminology is econo-jargon,” said Celente. “It’s like calling torture ‘enhanced interrogation techniques.’…http://www.yonkerstribune.typepad.com/yonkers_tribune/2009/05/gerald-celente-trends-alert-the-bailout-bubble-the-bubble-to-end-all-bubbles.html…see dilbert 5/18/09.. jargon.. an invaluable tool in the arsenal. 5/18/09http://www.dilbert.com/.so if there is nothing left after the bailout bubble pops will itthen be time to consider the true function of commerce, economics and”money”?

CONFIRMED: U.S. GOV’T WILL COLLAPSE BEFORE SUMMER 2009; WILL REPUDIATE NATIONAL DEBT; ISSUE NEW CURRENCY AND DEVALUE “OLD DOLLARS” BY 90%I have confirmed that the United States federal government will financially collapse “before summer 2009.”Long time listeners to my radio show will recall that as early as September 5, 2007, over one year ago, I warned my audience on the air, that this was coming.I announced during that same radio show that the US government was secretly minting new currency, THE AMERO and revealed a plot to intentionally bankrupt the United States to force integration with Canada and Mexico. Once merged, the US Canada and Mexico would be a new entity called the North American Union. (You may listen to an archive of that show, from over a year ago, by clicking HERE)According to a Bulletin issued out of Cannes, France, the collapse will come “before summer 2009″ because the U.S. can no longer make payments on its national debt.According to “Lettre Confidentielle de LEAP/E2020″ the US economy, now in deep recession, will collapse. The resulting lack of tax revenues will make it impossible for the federal government to pay even the interest on its ten trillion dollar national debt.On October 16, 2008, the “Global-Europe Anticipation Bulletin” told its subscribers that the present U.S. Dollar will be demonetized and a new currency imposed. “Old dollars” will be devalued by ninety percent (90%)When the collapse occurs, countries around the world will immediately stop accepting our money. That means imports will dry up very quickly — including food and oil imports.Lets talk oil firstThe United States uses 18 million barrels of oil each day. We produce 5 million barrels a day of our own oil and import 13 million barrels a day from around the world.Right now, our strategic petroleum reserve has 701 million barrels of oil in storage. When the world stops accepting our currency and stops shipping oil to us, we will have to draw down on the strategic petroleum reserve by 13 million barrels per day. We will run out of oil in 59 days.No oil means no gasoline for cars; no diesel fuel for trucks.Everything in this nation, except electricity and natural gas, is transported by truck. No diesel fuel means no products being shipped. . . . . including food.Now lets talk foodAfter our oil reserves run out in 59 days, trucks will have no fuel. No fuel means no food gets delivered anywhere.Here in the New York City area, our supermarkets have about three days worth of food in stock. They must get deliveries almost every day to feed the population.So . . . . . the oil reserves run out in 59 days, the supermarkets are empty 3 days later. What do you think is going to happen?Complete Social Collapse and anarchyThe cities will disintegrate into complete chaos first. Roving bands of savages will break into homes looking to eat. If you cannot protect yourself, they will take your food.Once the cities are emptied of food, the savages will come to the suburbs. Small local police departments will be instantly overwhelmed. Calling 911 will be useless.If folks in the suburbs cannot protect themselves, the savages will take their food too.Ultimately, people will start killing each other for food.No Government money means no welfare checks, no food stamps.When this collapse happens because the government is totally broke, the welfare checks will stop. Almost immediately thereafter, civil unrest will erupt and we know who will be doing that. . . . don’t we?Now you know why Barak Obama is being pushed so hard for President. The powers-that-be know what’s coming and they want a black man in the White House with the hope he can control “his” people. It won’t work. They’ll just call him an Uncle Tom or an OREO cookie and then go on their merry way to rape, rob, pillage, burn and kill.In fact, to prove I’m right about the Obama situation, check out what VP candidate Senator Joe Biden said this past weekend. Biden ‘guaranteed” that Barak Obama “will be tested by an international crisis within his first six months in power and he will need supporters to stand by him as he makes tough, and possibly unpopular, decisions.” Telling us all that we’re going to lose 90% of the value of our life savings sure will be unpopular.I wonder if the Secret Service agents who lose their life savings too, will bother protecting Obama from assassination; or might they kill him themselves? After all, the Zapruder film proves the secret service agent driving John F. Kennedy in Dallas, turned around and shot him in the head. That’s why his wife, Jacqueline Kennedy, tried climbing out of the back of the limo after it happened! She saw who shot her husband. It happened once, it can happen again!What to do right now1) If you live in a city, make plans to get out when all hell breaks loose. Arrange a place to stay with relatives or friends far away from the city because the cities will be deadly.2) Start storing food. Don’t wait. You have less than 6 months before the shit hits the fan. Buy canned foods because they stay fresh a long time. Buy SEVERAL 50 lb bags of rice, SEVERAL 50 lb bags of oatmeal and store them. Make sure you have lots of flour and yeast to bake your own bread. Have supplies of sugar, salt and the like. Buy powedered milk that can be mixed with water to create real milk. Refill your propane tank for your grill and maybe get some spare tanks. Do not store propane inside your house because it can explode.3) This Christmas, forget buying presents; buy a gun or two and ammunition. Ideally you should have one handgun for each older teenager/adult in your home. You should also have at least one 12 gauge shotgun and one hunting rifle such as a .308 or 30-30. Teach everyone in your family how to use them. Make certain your children understand these are not toys and that in apartment buildings and condos, bullets can go through walls and kill innocent people. We don;t want that so make sure you teach your kids well. You’re going to need guns to fend off the savages that come to steal your food. You may also need a rifle to hunt for food yourself.4) Buy a gravity-fed water filter so you have clean water for drinking and cooking.5) Stock up on any prescription drugs you MUST have to live.6) If you have never hunted for food and don’t know how to gut, clean and prepare freshly killed animals, LEARN. Get a couple books and LEARN.7) Start talking to your neighbors about what’s coming. Since the police will be totally overwhelmed, form local neighborhood defense groups. Get CB radios or Family Radio Service radios so you and your neighbors can call each other for help immediately. If the bad guys come, call out the whole neighborhood and use all deliberate force to repel the invaders. Don’t be afraid to shoot and kill. The savages won’t be afraid to do it to you!Folks, this is the absolute worst news I have ever delivered to my readers. I shudder at what’s coming. If we hope for the best but also plan for the worst, we might. . . . . just might. . . . get through this alive.Please spread the word to prepare for this coming disaster. Europeans are already planning for it.Final analysisHow we got to this point is simple: The United States federal government and in particular, the Congress, systematically and deliberately overspent our nation into oblivion. Our own government wrecked our nation.In order that WE THE PEOPLE can bring justice to our elected officials, I am publishing the private home addresses of all members of the United States House of Representatives and the United States Senate.Under our Constitution, they hold the purse strings. They are the only branch of government that can tax, spend or incur debt. Sure, they blame Presidents – that’s politics. But the Constitution makes clear that congress and ONLY congress deals with money.If you would like to know where your U.S. congressman and U.S. senators live so that you can “pay them a visit” after they devalue your life savings by 90%, I will provide their home address to you.To get the home addresses of your congressman and senators, send an e-mail to:wheretheylive@optonline.net and I will tell you how to get the info.http://turnerradionetwork.blogspot.com/2008/10/confirmed-us-gov-will-collapse-before.html

I think this beats even Morbid and Gloomy:-P

This is the most insane thing I have ever heard

i know what im gonna say to em..give me the moolaaah you c**ks***er motherF***rala Benecio Del ToroLOL

Didnt’ read the whole thing (usually don’t give much credence to “talk show” heads), but I immediately spotted a falsehood: that the US has only 59 days of oil- WRONG! That’s what’s been extracted, not what’s available. The US still has a LOT of oil IN the ground; but, it, like most everything else, is exhaustible; back in the 70s one of the Forbes clan stated that it was best for the US to preserve its own oil, use up other’s oil first.With ignorant (or purposely misleading) “information” like this it’s no wonder why we’re so messed up!Mark

I really wanted to make a brief comment in order to say thanks to you for these remarkable secrets you are writing at this website. My long internet look up has finally been paid with incredibly good content to go over with my close friends. I ‘d assume that many of us visitors are undeniably fortunate to be in a superb website with many brilliant people with interesting advice. I feel rather happy to have encountered the webpages and look forward to some more excellent minutes reading here. Thank you again for a lot of things.

I actually wanted to construct a brief note to express gratitude to you for the precious facts you are showing at this website. My time consuming internet investigation has now been compensated with high-quality content to talk about with my family members. I ‘d tell you that we readers actually are really endowed to live in a fine network with so many awesome professionals with valuable tricks. I feel rather privileged to have discovered the website page and look forward to so many more pleasurable times reading here. Thanks once more for all the details.

You seem to be very professional in the way you write.~:*~~

I always visit your blog everyday to read new topics.`-:”*

I was also reading a topic like this one from another site.”;:’~

Your blog has the same post as another author but i like your better.”:’;`

I just love to read new topics from you blog.;~*-.

The thing i like about your blog is that you always post direct to the point info.,:’”"

What would be your next topic next week on your blog.’`;*-

The way you write, you are really a professional blogger.-”"”‘

Thanks for the great post on your blog, it really gives me an insight on this topic.,,-:.

My friend first found your blog on Google and she referred your blog to me.’.:;.

Sometimes, blogging is a bit tiresome specially if you need to update more topics.-*~.-

I was also reading a topic like this one from another site.~”:~~

What would be your next topic next week on your blog.:~`*”

Last month, when i visited your blog i got an error on the mysql server of yours.~-.,’

I love reading your blog because it has very interesting topics.,,:,”

Sometimes your blog is loading slowly, better find a better host.’:`*,

I’m a blog crazed person and i love to read cool blog like yours.,,*:’

I love blogging and i can say that you also love blogging.”;,.*

I just love to read new topics from you blog.’..;-

I’m a blog crazed person and i love to read cool blog like yours.*’;”~

I love to visit your web-blog, the themes are nice.:-~,’

I always visit your blog everyday to read new topics.-’`..

The thing i like about your blog is that you always post direct to the point info.~.;`~

My friend first found your blog on Google and she referred your blog to me.*;:*,

Last month, when i visited your blog i got an error on the mysql server of yours.-:”"‘

Thanks for the great post on your blog, it really gives me an insight on this topic.:;;”:

I love blogging and i can say that you also love blogging.’-~;’

Perhaps you should update the php server on your webhost, WordPress is kinda slow..~*`-