first

http://www.debtdeflation.com/blogs/2009/07/27/rudds-essay-is-on-the-money/On the fiscal front, governments from the world’s largest 20 economies are expected to collectively pump about $US5 trillion into their economies by the end of next year (or nearly 8 per cent of global GDP since the crisis began). Altogether, the measures are the equivalent of an extraordinary and unprecedented 18 per cent of global GDP.FROM STEVE Keen from Kevin Rudd PM of Australia ( a slip?)The Global fix is in: ?Ho hum

With all due respects Prof Rubini, I suggest you take some time out from your ivy league perch and spend some time in the real (main st.) economy where you’ll find the “near depression” that you claim Bernanke so skillfully avoided is in fact raging unabated; how can a real (U6) unemployment rate approaching 20% be classified as anything but a “near depression”. Also, while it’s true that Bernanke may have delayed the onset of Great Depression 2.0, there’s plenty of evidence that like 1930, the similar (albeit more massive) measures taken by our fed will not prevent GD 2.0.

Bernanke, the Great Economic Preventer. Yes.I thought an iTuliper said it rather well yesterday: “What is amazing to me is that most of the people are buying the idea that this financial crisis is some kind of weather phenomena like Katrina and that the Fed is like FEMA taking care of the disaster victims. These arrogant SOBs created this mess (along with Wall Street) and now they act like someone is going to cause collapse if there is accountability. They are trying to convince you that collapse (comes from) knowing the facts and maybe even the truth. The Wizard of Oz effect.”And this from Nathan Martin of Nathan’s Economic Edge: “People in the media are praising this traitor, Bernanke? Yes traitor!! This is a guy who facilitated the greatest heist America or the world has ever seen, and you and all future generations are his victim. He and Paulson made Madoff look like a little preschooler. Oh, but the good news is that Americans are saving! And they are being ripped off there, too, because of the distortion in rates created by the Fed.”

Bob, how would you have managed us through this mess? These guys have clearly made some mistakes but what would you have done differently?Thanks.

I have heard the arguments on both sides of this issue and I don’t have strong feelings or reasoned opinions either way. It is difficult to assess blame for his role as a Fed Governer under Greenspan. It is also difficult if not impossible to state with any degree of certainty, what would have happened if Bernanke didn’t take the steps he took to avert a meltdown. My wife says my life would have been much worse if I never met her. She is certain she resucued me from a life of depravity and degradation in the nick of time.I guess, for the time being, I’ll go along with Roubini’s view about Bernanke, not because his view is so compelling, but because going along with Roubini has served me pretty well so far.

The Bernanke Era reminds one of central planning’s history of push and pull, lies and counter lies, screw ups and cover ups, and all the rest. It brings to mind Ayn Rand’s incredible description of central planning in another era, in Soviet Russia, with its counter lies, ups and downs, appeasers and oppressors, ultimate winners and losers–the façade of central planning—the bitter struggle of the individual against the central planners.Wrote Rand as a warning in October 1958 to help prevent a socialist America, just five years after Stalin’s death:To those who might wonder whether the conditions of existence in Soviet Russia have changed in any essential respect since 1925, I will make a suggestion: take a look through the files of the newspaper. If you do, you will observe the following patterns:First, you will read glowing reports about the happiness, the prosperity, the industrial development, the progress and the power of the Soviet Union, and that any statements to the contrary are the lies of prejudiced reactionaries; then, about five years later, you will read admissions that things were pretty miserable in the Soviet Union five years ago, just about as bad as the prejudiced reactionaries had claimed, but “now” the problems are solved and the Soviet Union is a land of happiness, prosperity, industrial development, progress and power; about five years later, you will read that Trotsky (or Zinoviev or Kamenev or Litvinov or the ‘kulaks’ or the foreign imperialists) had caused the miserable state of things five years ago, but “now’ Stalin has purged them all and the Soviet Union has surpassed the decadent West in happiness, prosperity, industrial development, etc.; five years later, you will read that Stalin was a monster who had crushed the progress of the Soviet Union, but “now” it is a land of happiness, prosperity, artistic freedom, educational perfection and scientific superiority over the whole world..How much of such five-year plans will you need before you begin to understand? — We The Living, pp.vii-viii

The only average group of people who are going to be spending are the ones who can’t help themselves. Anyone with an ounce of common sense and self-control is going to be saving like crazy.

meh … not so much.

I think that the US authorities have done a superb job “clipping” off the bottom of this recession by injecting adequate stimulus. It is classic Keynesian economics and it looks to be working. – Save for the rainy day and spend when it starts raining. When the sun breaks out, start saving again. Milton Friedman has been shown to be wrong. Keynes knew the answer to the 2008 crash all along. What a smart guy.The US is so wealthy that it can sustain this temporary deficit and in time to come wise Presidents like Obamah will gradually pay back what is owed. Yeah a few mistakes were made over the past decade or two, but the lessons have been learned and corrective action has and will be taken.This forum is stuffed full of over-reacting comment. To much bi-polar illness here. Calm down everyone, things are not as bad as Nouriel makes out and the recovery on Wall Street is well underway. Soon the economy will follow and later the employment figures will perk up. If there is a problem it is that Nouriel kept his fans out of the Spring/Summer rally and he is very late in adjusting his comments to the new reality of recovery. But he is being forced by events on the ground to alter his outlook and already he says that the lows of the “sucker’s rally” will NOT be retested. So there you have it: Nouriel admits that he was wrong and it was NOT a sucker’s rally after all.Watch out world – the good ole USA is dusting itself down, tending to its economic wounds and has come out fighting yet again. Watch out China, treat your own people decently or you will be the next to fall. But unlike the USA, you won’t be getting up in a hurry, if at all!Go America – we love you. Without you and the Brits, tyrants would rule the world and we would not be free.

This article sounds more like an indictment than an endorsement. Even from my little perch, I could not see housing bottoming out quickly after its meteoric rise. That would have made no sense. How can a man who is as learned as Bernanke have thought that?

America is dead. At least what you call America and the ideals that people fought for. Welcome to the reign of the central planning of markets, housing, commodities: booms and busts to enrich the well connected. Socialism for the rich and fascism for everybody. But we still have free speech, as long as it’s only speech in Web blogs.

Heard on a radio show today as I was driving home from work.A former student of Paul Wellstone’s back in 1977 took the following away from that professor: when major changes in public policy are contemplated (as, for instance, the overhaul of the not-health-care system), there are only three questions to answer, in this order:1. Who decides?2. Who benefits?3. Who pays?

I am not a central planner, Giraf. I do not have the arrogance to think that I, or any man, has the ability to outguess and outperform the market. I believe in free market competition that assures the public the widest variety of goods at the lowest prices based on ideas, capital, labor and management.I do not believe in control of the economy by a cabal of Fed bankers the likes of Goldman Sachs, by an international financiers’ crime syndicate run by corrupt, self-dealing politicians such as Barney Frank and Obama and bankers such as Larry Blankfein and Hank Paulson and the JPM Rothschilds. Who print money for aggressive resource wars and personal power and set the individual up for economic confiscation, whose only god is money. I do not believe in private international bankers organizing themselves into a private Federal Reserve system as an instrument of totalitarianism over my country and my countrymen…I do not believe in a system that begins with fiat money created by a central bank, which leads to government debt, which causes inflation and corruption, which destroys the economy, and impoverishes the people, and culminates in a bailout heist of $23.7 trillion from the American people. I do not believe in deregulated profiteers who use their printed money to buy up and seize America’s industry and manufacturing base and ship it off shore for their personal tax-free wallowing in the Cayman Islands.I believe in market economics as the means of making economic decisions, as it has been proven in the 19th century of this country—one of the greatest miracles of mankind’s history—that allows you, Giraf, to bask in what remains of the American Dream. I believe in a market system that allows each person to make the individual decisions that best suit that person needs, and the aggregate of billions and trillions of those decisions coming together to make the economic decisions that power the economy. I believe in a representative democracy political system that supports a level economic playing field, that values individuals and believes that each individual is the best person to make decisions for him or herself.I do not believe in a system that allows bankers and politicians to have all the money and the power. I am indifferent who is Fed chair. The Fed itself must be abolished.Thanks for asking.

Thanks SWK. I’ll check it out now.

I was thinking more about what actions you would have taken as Fed Chairman, on Treas Sec, rather than focusing on the individuals.

MM CA:FYI, Dr. Roubini used to work for Dr. Summers at the Treasury Department during the Clinton Administration. Thought you were aware of that already.SWK

When the Federal Reserve Banks were “opened” for business on November 16, 1914, the founding father of the system, Paul Warburg, said, “This date may be considered as the Fourth of July in the economic history of the United States.”And so it has been, for the “most gigantic trust on earth,” for the international paper-money trade.The New York Times in its front page story December 22,1913, under the headline MONEY BILL MAY BE LAW TODAY…wrote, “With almost unprecedented speed, the conference to adjust the House and Senate differences on the Currency Bill practically completed its labors early this morning…”thus breaking a longstanding political courtesy that important legislation would not be acted upon during the week before Christmas. (Kinda reminds one of the bailout for the bankers bill.)Said Representative Frank Guernsey of Maine, a Republican on the House Banking and Currency Committee, “This is an inflation bill, the only question being the extent of the inflation.”Well, now we know.Wrote Hans F. Sennholz in 2005 “The Many Evils of Inflation”: Many people know how to earn money, but few are aware of what the Federal Reserve System…is doing to their money. It is inflating and depreciating the dollar at various rates–at double-digit rates during the 1970s and early 80s and at single-digit rates ever since. The present dollar is worth no more than 10 cents of the 1970 dollar…”It appears that the American people haven’t seen anything yet. And our congressional lightweights admonish us for not “saving” and accuse us of profligacy.

Thanks. I wasn’t asking what you believe in. I was asking what, faced with this crisis, you would have done if you were in one of the seats of power: Fed Chairman, Tres Sec, etc.Would you have sat idly by and watched the financial system, along with the everyday Joe and Jane’s money go down the tubes? That, or provide the massive support we have witnessed, or another solution? I for sure don’t have the answers.I’m just hoping that someone else does.

Congress “retains oversight of the Fed”? The Fed hasn’t let the Congress look at its books since Congress set it at large amongst the people back in 1913. The Fed “retains oversight of the Congress.” It’s called extortion.

SWK;It was a quote. You can draw your own conclusions like any other. I was laying it out to see.Again though, you do miss my point which emphatically is;”…but are independent privately owned and locally controlled corporations”- so found the 9th Circuit Court.If you believe Congress exercises it’s oversight authority over the Fed in reality, then you are a dreamer and possibly more- an apologist for the greatest theft of all time ie a part of the problem.”Governments create private corporation for public purposes all the time.” A minization of the monstrous legal mechanism of citizenry theft,sanctioned in the Fed’s legislation.At one time , serfs and peasant revolts , after centuries of deprivation and squalor, were “legally” deemed outlawed by the ruling powers and punishable often by death (if one was lucky!).Then, in response , organized revolutions took hold, eventually providing a far greater protection for the common man in the societal systems that later took root. Not to be outdone, the oligarks have sought unremittingly ever since to pervert laws and lawmaking to further their powers, influence and wealth at the expense of the common man. Often “behind the curtains”.My point here is that the US Fed is clearly a bastion of that toxic obcene influence. Those defending it are clearly vested interests.

Dear NR, this is only a political writing!The game is not over yet. You know it.

That’s patently untrue. From the FAQ page at federalreserve.com:Are the Federal Reserve System and Reserve Banks ever audited?”The Board of Governors, the Federal Reserve Banks, and the Federal Reserve System as a whole are all subject to several levels of audit and review. Under the Federal Banking Agency Audit Act (enacted in 1978 as Public Law 95-320), which authorizes the Comptroller General of the United States to audit the Federal Reserve System, the Government Accountability Office (GAO) has conducted numerous reviews of Federal Reserve activities. In addition, the Board’s Office of Inspector General (OIG) audits and investigates Board programs and operations as well as those Board functions delegated to the Reserve Banks. Completed and active GAO reviews and completed OIG audits, reviews, and assessments are listed in the Board’s Annual Report (before 2002, the reviews were listed in the Board’s Annual Report: Budget Review).”The Board’s financial statements, and its compliance with laws and regulations affecting those statements, are audited annually by an outside auditor retained by the OIG. The financial statements of the Reserve Banks are also audited annually by an independent outside auditor. In addition, the Reserve Banks are subject to annual examination by the Board. The Board’s financial statements and the combined financial statements for the Reserve Banks are published in the Board’s Annual Report.”Of course, I fully expect the Fed conspiracy theorists among you to discount all this oversight….SWK

Sorry, just missed you, IC. Here’s my response to you, which I just posted on the previous thread:Well, you’ve hit the nail on the head. The whole court system is gummed up with stalled foreclosures at a time when judicial budgets are being subjected to cuts due to the economic downturn and loss of state tax revenues. It’s a major cause of the delay in re-balancing the housing market.SWKReply to this comment By kilgores on 2009-07-27 21:14:18____SWK

yes – gotta love the brits:North Sea oil aka pound Sterlinghttp://dieoff.org/page180.htmfreedom for all !!!!http://www.businessweek.com/globalbiz/content/jul2009/gb20090724_632771.htm

Money Master FAQsFrequently Asked QuestionsQuestion: Have the Courts had to decide whether the Federal Reserve Banks are privately owned or not?Answer: Yes, in several cases. Here is one of them on point which went up to the 9th Circuit Court of Appeals: LEWIS v. UNITED STATESJohn L. LEWIS, Plaintiff/Appellant v. UNITED STATES of America, Defendant/Appellee. No. 80-5905. United States Court of Appeals, Ninth Circuit. Submitted March 2, 1982; Decided April 19, 1982; As Amended June 24, 1982″Plaintiff, who was injured by vehicle owned and operated by a federal reserve bank, brought action alleging jurisdiction under the Federal Tort Claims Act. The United States District Court for the Central District of California, David W. Williams, Jr., dismissed holding that federal reserve bank was not a federal agency within meaning of Act and that the court therefore lacked subject-matter jurisdiction. Appeal was taken. The Court of Appeals, Poole, Circuit Judge, held that federal reserve banks are not federal instrumentalities for purposes of the Act, but are independent, privately owned and locally controlled corporations.Affirmed.. . .Examining the organization and function of the Federal Reserve Banks and applying the relevant factors, we conclude that the Reserve Banks . . . are independent, privately owned and locally controlled corporations.Each Federal Reserve Bank is a separate corporation owned by commercial banks in its region. The stockholding commercial banks elect two-thirds of each Bank’s nine member board of directors. The remaining three directors are appointed by the Federal Reserve Board. The Federal Reserve Board regulates the Reserve Banks, but direct supervision and control of each Bank is exercised by its board of directors. 12 U.S.C. § 301. The directors enact by-laws regulating the manner of conducting general Bank business, 12 U.S.C. § 341, and appoint officers to implement and supervise daily Bank activities. These activities include collecting and clearing checks, making advances to private and commercial entities, holding reserves for members banks, discounting the notes of members banks, and buying and selling securities on the open market. See 12 U.S.C. §§ 341-361.. . . The Banks are listed as neither “wholly owned” government corporations under 31 U.S.C. § 846 nor as “mixed ownership” corporations under 31 U.S.C. § 856, . . .Additionally, Reserve Banks, as privately owned entities, receive no appropriated funds . . .”Let’s sum up: The Federal Reserve consists of 12 regional banks, the stock of which is owned and the Boards controlled by the member banks, which are privately owned bank corporations. These institutions receive 6% profit on their funds paid into the Fed, rain or shine, peace or war (sometimes more).The Federal Reserve Board of Governors is an independent (its own word) entity “within” the government (i.e., something much like an independent, internal parasite in a host organism), with 14 year, reform-proof terms (i.e., only one of 7 can be replaced every two years).The Fed was deliberately designed to appear as a sort of government body to hide the fact that it is a private banking cartel whose member banks share in the vast profits of seigniorage (i.e., the difference between the cost of printing/minting or otherwise creating money [a few cents per $100], and its face value)…Thus, rather than the government receiving the vast benefits of creating all of our money, private banks create over 98% of our money supply – literally billions of dollars annually – and pocket the interest charged on loaning that new money, as their private profit. Our government is left with only the insignificant seigniorage from minting coins…The exponential concentration of wealth, in the US and abroad, is due almost exclusively to fractional reserve banking by privately owned banks such as Bank of America, Wells Fargo, Citigroup, J.P. Morgan Chase, etc. The Fed is simply part of the mechanism screening this grave injustice from public knowledge and scrutiny.http://www.themoneymasters.com/faqs.htm#q4

None Jane. It’s all BS..Average Joe American is naive and persuaded very easily… i wish it was nto the case, but…

If its positive it’s a lie. You dont go from -6% to positive in 1 qtr.

With all DUE respect to the fine people at “themoneymasters.com”: 1) the United States is a republic; 2) the people elect representatives to serve in that republic; 3) the Congress of that republic, composed of duly elected representatives of the people of the United States, lawfully passed The Federal Reserve Act pursuant to its constitutional authority; 4) to keep politics out of monetary policy, that act delegates responsibility for monetary policy to the Federal Reserve System, the banks of which are private, not for profit entities; 5) the Federal Reserve is self-financed — its income is derived primarily from the interest on U.S. government securities that it has acquired through open market operations, the interest on foreign currency investments it holds, fees received for services provided to depository institutions, such as check clearing; and interest on loans to depository institutions (the rate on which is the so-called discount rate) — and therefore is not subject to the congressional budgetary process, which is by design to maintain the Fed’s independence from prevailing political attitudes of the moment;6) after paying its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury; 7) the Fed is subject to oversight by Congress, which periodically reviews its activities, to wit, legislation requires that the Fed report annually on its activities to the Speaker of the House of Representatives, and twice annually on its plans for monetary policy to the banking committees of Congress; Fed officials testify before Congress when requested; the financial statements of the Federal Reserve Banks and the Board of Governors are audited annually by an independent outside auditor; and the Government Accountability Office, as well as the Board’s Office of Inspector General, can audit Federal Reserve activities); Congress can alter at any time the responsibilities of the Fed by statute; 9) as a practical political reality, the Fed must work within the framework of the overall objectives of economic and financial policy established by the elected representatives of the people in the federal government.The issue isn’t whether the banks of the Fed are privately OWNED or even whether they enjoy substantial independence in their day to day operations, but whether they serve a not for profit PUBLIC PURPOSE and whether they remain under the ULTIMATE CONTROL of the elected representatives of the people of the United States. They do serve such a public purpose and they do remain under Congressional control. The Fed is NOT a “parasite in a host organism,” it is NOT a “private banking cartel,” the federal government is not “left with only the insignificant seigniorage from minting coins,” and reserve fractional banking is not the cause of exponential concentration of wealth. There is no empirical evidence for any of these outlandish claims.SWK

I agree with you. I believe Dr. Roubini repeatedly urged that in any bank bailout, the bank stockholders should get wiped out, the bank bondholders should take a haircut or accept common stock exchange for their bonds, and that the government should engage in triage, temporarily socializing the banks by taking them over, firing management, cleaning up their balance sheets to the extent possible, closing the unsalvageable institutions, and nursing the salvageable ones back to health for re-sale to the private sector. Instead, the federal government just dumped a bunch of money on them, or took back preferred — non-controlling stock — in the banks. It was a lame approach to the bailout, and far less effective that it could have been.We’ve seen this all before in the 1930s. Perpetrators escaping with wealth and impunity, the ransacked poor and the middle class left to try to survive in a colossally disfunctional economic environment after losing most of their hard-saved money and assets. Some will be caught, like Madoff; others will get away. What we need to focus on is providing the safety nets needed to mitigate the injuries to those who have been harmed, restructure federal tax policies to compress the disparity in income that has grown between the wealthiest, on the one hand, and the poor and middle class, on the other; and enact meaningful legislation and regulation to curtail the pernicious influence of industries that serve the interests of their shareholders, even to the detriment of the public at large.SWKSWK

The Fed doesn’t need more audits than it is subject to now. Dr. Alan Binder calls Ron Paul’s initiative to have the GAO audit Fed monetary policy “a truly terrible idea that could quickly undermine the Fed’s independence” I agree. Thankfully, the leadership of the Senate blocked a vote on Sen. Jim Demint’s amendment to audit the Fed, so this whole audit nonsense will probably just die as another politically motivated dumb distraction from real issues.SWK

The Fed is an easy scapegoat. In fact, I agree with Dr. Roubini that if we did not have someone as capable as Dr. Bernanke running the Fed, we’d already be in the throes of an economic dislocation far graver and deeper than we are.This is exactly the reason the Fed was made independent: to allow it to make tough, unpopular decisions that elected politicians would be loathe to embrace for fear of alienating their constituents, not all of whom may appreciate fully the complexity involved in keeping the economy reasonably stable under such very trying circumstances as we are currently experiencing.SWK

The Federal Reserve Has Failed Us | Seeking Alpha | Robert Nabloid | January 13, 2008An Excerpt:In March 2006 the Federal Reserve stopped publishing the M3 index – reportedly because it costs a lot to collect this information and it wasn’t worth it. The M3 index is a report that tells us how many dollars are in existence. So lets get this right. The Federal Reserve (a privately owned company) has never been audited (ordinary citizens and corporations get audited all the time – The Fed hasn’t been audited since their creation in 1913) and now they NO LONGER PUBLISH HOW MUCH MONEY IS IN CIRCULATION. The same company that CONTROLS THE MONEY SUPPLY isn’t held accountable? How can you determine the value of a currency without that information? How do we truly know what the Federal Reserve has been doing? It could be conducting pure fraud and acting like a free ATM for its owners!? We don’t know. That should scare you. Sometimes I truly wonder, do the people have control over government anymore? Is voting once every four years really government by and for the people?The Federal Reserve has been saving U.S. banks that invested in sub-prime mortgages. What about the pension funds? What about the average investor? Will they be bailed out? Nope. Just the banks. Funny how that works. The Fed bailing out their friends when they do dumb things that hurt the average American. Is it odd that the banks only own a small portion of the sub-prime mortgages and yet they are the only ones to get bail-outs…?“The Federal Reserve is totally out of it. They’re destroying the currencyand driving up inflation, which will result in higher interest rates and aworse economy. We now know the Fed doesn’t understand markets oreconomics, but is just trying to bail out its friends on Wall Street at theexpense of 300 million Americans, nay, of the whole world.”- Investment Guru Jim RogersThen there is the bigger question. Do you believe in the free markets and capitalism? Do you think the government should stay out of our business and let it be (laissez-faire)? I guess they think the free market won’t work without interference? Why else would we need the Federal Reserve? The whole point is to manipulate the money system in order to have a more stable economy. Tell me… is the economy stable? …Want another example of how the Fed has failed us? In the 1950’s a man could support his entire family with ONE average job. He could afford a nice home with the white picket fence and his wife didn’t have to work. Now women are forced to work outside the home just so the bills can be paid and her husband (and quite often her too) is working 80+ hours a week just to keep up with the workload. Inflation has slowly hidden the effects over several generations.I tend to agree with the Austrian school of economics and believe government interference is counter-productive and has caused many problems. It has done nothing but push problems forward so that they can be dealt with another day. Pushing the problems forward hasn’t solved them… but merely delayed and intensified them and the consequences are scary. Instead of dealing with the problem of debt several decades ago, we are now in a much worse situation. We are headed towards economic disaster…So far all the Federal Reserve has done is do a good job of getting EVERYONE into debt to others. Being indebted to others feels like a form of wage slavery. How much debt do you have?http://seekingalpha.com/article/59887-the-federal-reserve-has-failed-usWell, there’s a guy who “got it” one and a half years ago. Too bad it’s taken Bernanke so long to catch on.

I have to agree. We have unlimited freedom in this market system. We can choose between Coke or Pepsi, Colgate or Crest. Let nobody besmirch our hard-won freedoms.

for he’s a jolly good fellowfor he’s a jolly ggooooodddd fffeelllllooowwwand nobody can deny

I’m wondering if what Bernanke did to avert a near L-shaped depression is what any FED chairman would have done in this period of history considering all the data we now have on these events. If so then they should through him out after shooting him for not seeing the mess that he help happen in the first place.

The point is, this is a whole different ballgame, a different country. We’re talking about trillions (T-R-I-L-L-I-O-N-S) of unaccountable dollars here, created out of thin air, that nobody but Bernanke and the boys at the too-big-too-fails know where they are, where they’re going, where they’ve been. And while the boys are partying in their silk suits in their New York financial district, the guy at the fast food joint is standing on his feet all day for $58, with 20 minutes for lunch, frying burgers and fries, and paying $3.05 a gallon for Goldman Sachs gasoline to get to work. If he still has a job. Uh huh.For Bernanke to take a bow now is a little premature, Dr. Roubini. To actually destroy the economy and then save his multibillionaire friends, and then pretend he was upset because he had to do it, is more than people can take. Goldman Sachs and the boys put him in there to steal the money, and he stole it. Why take a bow when he stole the money and gave it to the people who put him there?This is a new game. It’s hardball… and Joe Q. Public is on the pitcher’s mound.

SWK, the language concerning the Fed that “they remain under the ULTIMATE CONTROL of the elected representatives of the people of the United States” has a nice ring to it. However, it is not very reassuring that the Fed is supervised by our bought and paid for Congress. Also, can you tell me why someone like Ron Paul, who is an intelligent person, would be spearheading this movement to audit the Fed, if in fact the Fed is already regularly audited? Sounds kind of non-sensical on its face.On the other hand, perhaps the Treasury Dept needs auditing, too. Remember Paulson’s demand for non-accountability for the $700 billion TARP? Do you know anything about the accountability of the Treasury? Something is rotten in Denmark–if it’s not the Fed, then where is the corruption festering? Do “we the people” have a right to know, or is this information a matter of national security?

If it were up to me, if it were up the American people, there wouldn’t be a Fed. Nobody would ever have heard of Ben Bernanke. He’d still be drawing his tenure at some dead-end university.

I’m struck by the similarities of central planning. Now that the stealing is over, everyone can say how Ben avoided the Great Depression 2.0. I didn’t know that that many economists were predicting the Great Depression that Ben has so adroitly avoided. And I don’t yet know that Ben has avoided it. But he sure managed to run the economy into the Great Recession. Perhaps we should give him another four years, to try for the big one.

The USA’s Zimbabwe Taxi meter, current charge on the national debt, is up to $11,513,509,400,719.00 and still ticking.

Mass Layoffs: The Continuing Devastationby Gary NorthJuly 25, 2009–Stock market investors shrug off a disaster in our midst: mass layoffs. Investors act as though it will soon be business as usual. Companies cut costs by firing employees that have been with them for decades. Then the companies can report higher earnings from cost-cutting measures. The media then proclaim an increase in earnings. But how will these increases be sustained? How will an unemployment rate of 11% help get the economy back on its feet?Companies do have to cut costs. Consumers are telling them this is no uncertain terms. But it is not a time for rejoicing when people are laid off. They trusted senior management. They trusted the economic system. They have never heard of the Federal Reserve System. They know nothing about derivatives. All they know is that the Federal government bailed out the big banks in 2008, while they have lost their jobs. In this report, I will consider the question of mass layoffs. This topic does not get much attention by the financial press. It should.Instead, we are told about three statistics: the unemployment rate, initial requests for unemployment insurance benefits, and total unemployment.UNEMPLOYMENT STATISTICSFirst, let’s consider the unemployment rate. The latest figure is 9.5%. It is widely expected to rise to 10% by the end of the year. No one in a position of authority is predicting a major reduction of this rate by the end of 2010.The unemployment rate is not well understood. It is not the ratio of people out of work to adults in the economy. It is the ratio of people out of work compared to the total labor force. The Bureau of Labor Statistics explains.What are the basic concepts of employment and unemployment?The basic concepts involved in identifying the employed and unemployed are quite simple:· People with jobs are employed.· People who are jobless, looking for jobs, and available for work are unemployed.· People who are neither employed nor unemployed are not in the labor force.. . . The sum of the employed and the unemployed constitutes the civilian labor force.Let’s follow through on this. Joe gets fired. He is unemployed. He looks for a new job. He is still in the labor force. So, the unemployment rate rises: the ratio between those out of work in comparison with the total labor force.Joe looks for a job. His unemployment insurance runs out. He stops looking for work. Or he starts looking for jobs that pay in cash. In either case, he is removed from the labor force. He is therefore also removed from the unemployment rolls.As an unemployed person, he had a greater weight in the numerator (fewer people, total) than he did in the denominator. So, when he gets removed from both, the unemployment rate goes down. Victory for the stimulus! But the victory is purely statistical.Second, let’s consider initial claims for unemployment insurance. The most recent claims have been in the 566,000 per week range (4-week average). It was 616,000 a month ago. It was 623,000 a month before that. So, there has been some slight improvement. People go on the rolls. Then they go off, as they get work or run out of payments.Total unemployment as of July 23 was 6.2 million.MASS LAYOFFSThe Bureau of Labor Statistics publishes another statistic: mass layoffs. A mass layoff is defined as one company that fires 50 or more people at one time.A mass layoff indicates panic in senior management. This means doing without a lot of workers. It is not a normal occurrence. Here is the BLS report for July 23: “Mass Layoffs in June 2009.”Employers took 2,763 mass layoff actions in June that resulted in the separation of 279,231 workers, seasonally adjusted, as measured by new filings for unemployment insurance benefits during the month, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Each action involved at least 50 persons from a single employer. . . .Over the year, the number of mass layoff events increased by 1,046, and associated initial claims increased by 104,483.That means that a year ago, the number of mass layoffs was at 1,717. It rose to 2,763.The report also provided information regarding the extent of these mass layoffs since the official beginning of the recession in December 2007.During the 19 months from December 2007 through June 2009, the total number of mass layoff events (seasonally adjusted) was 39,822, and the number of initial claims filed (seasonally adjusted) in those events was 4,090,538. (December 2007 was designated as the start of a recession by the National Bureau of Economic Research.If we divide the total number of mass layoff events of 39,822 by 19 months, we get an average monthly figure of 2,095. June’s was 2,763. The media tend not to report on this figure. It is limited to large firms. Most firms cannot fire 50 people. They do not employ 50 people.Most new jobs are created by small businesses. Large firms employ lots of people, but these are long-term jobs. So, when people lose their jobs at large, established firms, they are forced to look for work in comparable firms if they want to keep their pay level. The problem is, mass layoffs are hitting in unprecedented numbers. The comparable jobs are not available.The job-seeker must set his sights lower. He aims lower in terms of pay and seniority, because he will be entering the labor market in the “just getting started” segment. These jobs are not secure. They tend not to pay as well as established jobs in large companies.Mass layoffs are career-disrupting. People who had hoped to keep a job in an established company that offers health care benefits and a retirement program now find that they have lost their health care insurance, and their pension money is insufficient to offer them any hope for retirement.NEW COSTS, MORE FIRINGSThe proposed health care plan proposes to force large employers to pay for these programs. The smaller firms will initially be exempted. This will raise costs of operations for those firms that already have health care programs – just not so generous as the new law will mandate.This will place large firms at a disadvantage. They will be likely to fire marginal workers or else not hire marginal workers. They will be facing new competition from smaller firms that are not under the new law.The result will be the opposite of what the promoters of the law say they want. They want more workers covered by employer-funded programs. There will be fewer people covered, because fewer will be employed. They want more extensive coverage. Workers will get less.The mass layoff phenomenon will continue. Additional costs will force businesses to cut costs rapidly. They will face rising costs in a time of recession. Those firms that held out, hoping that the recovery would come, will find that they can hold out no longer.The fact that the Obama Administration is pressuring Congress to pass this law before there is any sign of economic recovery indicates that the President thinks the bill will not pass if he delays. He wants to use his popularity as a battering ram while it still can batter down resistance.CAREER CHANGEA mass layoff is likely to take place in one town. They are not individual layoffs spread across several plants or regions. They are likely to hit one plant. The company shuts down a division. It finds that the entire output of a plant or a division is no longer profitable.When this happens, the loss of income is concentrated in one geographical area. This hits housing harder than if the layoffs had been spread across several plants located in different towns.Without warning, every fired person must scramble to get a job. The local market finds it costly to absorb all of them at once. The obvious response of employers is to offer a lower salary without fringe benefits. The job-seekers are not in a position to negotiate. They have bills to pay.One of these bills is the monthly mortgage. It is a large share of the household budget. The family will resist skipping this payment. But, if they are facing a mortgage that is now larger than the market value of the home, they are tempted to stop paying.If they knew how expensive it is for a lender to hire a lawyer and pursue the foreclosure in civil court in most states, a lot more families would stop paying. How much does foreclosure cost the lender? On average, $50,000. This includes the loan loss ($40,000 on a $210,000 home), lawyers’ fees, and court costs.The lender does not want to foreclose, because the loss must be recorded. It can be delayed for as long as there is no final transfer of the house to the lender. The lender may like to threaten to foreclose, but if the family abandons the home, it becomes a high-risk asset. No money is coming in. The house is deteriorating. Vandals may hit the house. Squatters may move in.The family finally has to throw in the towel. It either walks away from the home or is evicted. In either case, the equity is gone. The family now has a large black mark on its credit. It will be hard for the family to get a bank loan in the future. It may have to declare bankruptcy.The threat posed by mass layoffs is terrible for a family. Yet people don’t see these layoffs coming. They stay in a doomed career, hoping that there will be some deliverance. In June, deliverance did not come for 279,231 workers.Month after month, this process continues relentlessly. Occasionally, a television news show will cover a town that has been hit with a major mass layoff. But there is no realization that these events are taking place, month by month, in thousands of communities.NO PROBLEM!The economic recovery is not here yet. The media report as good economic news statistics of less serious decline. The public has become less pessimistic about the economy. What is the basis of this optimism? Media spin. Congressional promises. Bernanke’s assurance that he saw some green shoots.What is needed is evidence of recovering trade. Rising freight shipments would be a welcome indicator. What we see is slightly less decline. Across the board, railway shipping is down, far more than in the recessions of 1991 and 2001.Rising imports and exports at the nation’s largest ports would be another welcome indicator. Again, no compelling evidence.The slowing of the decline is better than acceleration. But with unemployment continuing upward, how does anyone expect consumers to begin to buy the items that do well in boom times? Why should we not assume that they will buy such things as basic foodstuffs? They will save money. They will deposit money in banks. But the banks are not yet lending. They are putting the money with the Federal Reserve at 0.15% per annum: excess reserves. The bankers remain convinced that the green shoots are worth investing in.We are regaled with stories of depression-era people withdrawing money and hiding it mattresses, as if those people were fools. They were smart; the banks were unsafe. At least 6,000 banks failed, 1930–33. Anyone who had his money in those banks lost every dime. Besides, the people hiding money in a mattress today are America’s bankers. The mattress is called “excess reserves.”Where will the profits come from in the old-line, boom-era businesses? Why will consumers who are facing uncertainty about their jobs be ready to borrow and spend as if it were 2005?The fund managers are convinced that happy days are here again for stocks, even though most economists predict a slow, weak, extended recovery. The others predict more recession.CONCLUSIONWe are in the midst of a disaster. The economy is still on its back. Economic growth requires capital, but the government is absorbing savings. The banking system is not providing the funds that businesses require.Unemployment is rising. Foreclosures are continuing. Moody’s senior economist testified before the Senate Finance Committee on July 21 that the financial system’s $1.2 trillion in losses so far will be followed by $1.4 trillion. He said that almost 1,000 banks are at risk of failing. No one noticed.There is a discrepancy between investors’ assessment of the economy and businessmen’s assessment. They continue to have mass layoffs.Profits come from accurately forecasting future consumer demand. Unemployed consumers are not the source of profits.http://www.lewrockwell.com/north/north738.html

Beautifully, beautifully said! But I changed the last line to read, And that sleeping giant, that great American whose ancestry defied all of history’s past, once again is awakening to the call.

Here’s where the FED clearly got it wrong. One of its tasks is supervising and regulating banking institutions to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers.In this crisis, the FED acted in the interests of the bankers, who opposed supervision and regulation. Millions for the bankers during those happy deregulation years. Consumers are paying the bill (indirectly via taxes and virtually zero interests on their savings, the least informed ones by losing their houses). The FED allowed dereregulation up to the point that the nation’s banking and financial system collapsed and could only be rescued by pumping billions (trillions) in it.The FED as the great Non-Preventer. Bernanke did not change this course, he wasn’t even aware of the nearing collapse.

This is really GD 2.1 … we might have averted 2.0, but only with a patch.

People who POST as “Guest” should be ignored. They create confusion. Please use a username everybody.

SWK, with all due respect, let’s look past the style and examine the substance of the Republic …The US has become a kleptocracy, where a sizable portion of the governed have learned that they can control the processes to expropriate wealth from others for their own benefit.Sure, the US has all the trappings of a republic, but it behaves internally and externally like an empire, and not a particularly bright one since it seems now to go out of its way to avoid military victory at all costs.The US certainly taxes like an empire one (there is such a thing as double taxation for a US citizen or resident abroad) despite all the lofty treaties that have been enacted.Its “duly” elected officials are in many cases the winners of dubious elections and have conveniently rigged the system in ways that were specifically contemplated and excluded by the Framers of the Constitution (by the Gamers of the Constitution). And even if one could accept the proposition that they are duly elected, they are hardly the best and brightest among us and I, like Wm. Buckley, would rather be ruled by the first 400 names from just about any phone book in the country.

i thought you hate dictator wuss? (equivalent to bloke)

More on bank regulation as the banks would like it:Edward Trott, a former member of FASB and former partner in KPMG, a large accounting firm, said that the banks imposed different standards on their customers than they wished to have imposed on them.“The area for bank regulators to be involved with accounting standards setting is to help identify the financial information the banks need from others to make appropriate lending and investing decisions,” Mr. Trott wrote. “In my experience, banks want current fair value information about assets that serve as collateral for loans. They do not want information about what assets cost two or three years ago.”http://www.nytimes.com/2009/07/28/business/28account.htmlNow, why would standards be different for bank regulators, clients and investors? Don’t these have the right to obtain current fair value information on bank assets? Why these double standards that allow banks to “dress up” their balance sheets with their own estimations up to a resulting collapse of the financial system while distributing huge sums of dressed up profits amongst themselves?Here’s some Prevention Work to do for the FED and Bernanke.

Ouch, bullseye hit!

Today’s Goldman-Sachs bash … This little gem from Bloomberg … You’d almost think it was real if it didn’t come from Michael Lewis….Bashing Goldman Sachs Is Simply a Game for Fools: Michael Lewis Commentary by Michael LewisJuly 28 (Bloomberg) — From the moment I left Yale and started working for Goldman Sachs, I’ve felt uneasy interacting with those who don’t.It’s not that I think less of Goldman outsiders than I did while I remained among you. It’s just that I feel your envy, and know that nothing I can do or say will ever persuade you that I am no more than human.Thus, like many of my colleagues, I have adopted a strategy of never leaving Goldman Sachs, apart from a few brief, spasmodic attempts to make what you outsiders call “love” or “the beast with two backs.” Goldman recognizes how important it is for its people to replicate themselves. We bill no performance fees for the service.Today, the sheer volume of irresponsible media commentary has forced us to reconsider our public-relations strategy. With every uptick in our share price it’s grown clearer that we who are inside Goldman Sachs must open a dialogue with you who are not. Not for our benefit, but for yours.America stands at a crossroads, and Goldman Sachs now owns both of them. In choosing which road to take, ordinary Americans must not be distracted by unproductive resentment toward the toll-takers. To that end we at Goldman Sachs would like to dispel several false and insidious rumors.Rumor No. 1: “Goldman Sachs controls the U.S. government.”Every time we hear the phrase “the United States of Goldman Sachs” we shake our heads in wonder. Every ninth-grader knows that the U.S. government consists of three branches. Goldman owns just one of these outright; the second we simply rent, and the third we have no interest in at all. (Note there isn’t a single former Goldman employee on the Supreme Court.)What small interest we maintain in the U.S. government is, we feel, in the public interest. Our current financial crisis has its roots in a single easily identifiable source: the envy others felt toward Goldman Sachs.The bozos at Merrill Lynch, the dimwits at Citigroup, the nimrods at Lehman Brothers, the louts at Bear Stearns, even that momentarily useful lunatic Joe Cassano at AIG — all of these people took risks that no non-Goldman person should ever take, in a pathetic attempt to replicate Goldman’s financial returns.For too long we have allowed others to emulate us. Now we are working productively with Treasury Secretary Tim Geithner and the Congress to ensure that we alone are allowed to take the sort of risks that might destroy the financial system.Rumor No. 2: “When the U.S. government bailed out AIG, and paid off its gambling debts, it saved not AIG but Goldman Sachs.”The charge isn’t merely insulting but ignorant. Less responsible journalists continue to bring up the $12.9 billion we received from AIG, as if that was some kind of big deal to us. But as our CFO David Viniar explained back in March, we were hedged. Our profits from AIG “rounded to zero.”People who don’t work at Goldman Sachs, of course, find this implausible: How could $12.9 billion round to zero? Easy, but you just need to understand the mathematics.Let’s assume AIG transferred $12,880,560,250.34 of taxpayer money to Goldman Sachs. A Goldman outsider, asked to round this number, might call it $12,880,560,250.00. That’s not how we look at it; at Goldman we always round to the nearest $50 billion, so anything less than $50 billion rounds to zero.Think of it that way and you can see that $12,880,560,250.34 isn’t even close to not rounding to zero.Rumor No. 3: “As the U.S. government will eat the losses if Goldman Sachs goes bust, Goldman Sachs shouldn’t be allowed to keep making these massive financial bets. At the very least the $11.4 billion Goldman Sachs already has set aside for employees in 2009 — $386,429 a head, just for the first six months — is unfair, as the U.S. taxpayer has borne so much of the risk of the wagers that generated the profits.”Really, we don’t know where to begin with this one. It is wrong-headed in so many different ways!Let’s begin with the idea that the taxpayer is running a bigger risk than we are. The billions he stands to lose are trivial; after all, they round to zero.The real risk, when you think about it even for a minute, is the risk we take ourselves: that Goldman will cease to exist and we will cease to be Goldman employees. To flirt with such tragedy we obviously need to be paid.Rumor No. 4: “Goldman employees all look alike.”Several recent newspaper photos have revealed that a surprising number of Goldman Sachs workers are white, male and bald. That non-Goldman people glance at such photos and think “Holy crap, they even look alike!” just shows how deeply anti- Goldman bigotry runs in American life.We at Goldman represent unique clusters of DNA; if we bear some faint surface resemblance to one another, and to creatures from the 24th century, it is only because our superior powers of reasoning lead us to hold in our minds exactly the same thoughts, at exactly the same time.A shared disinterest in growing hair, for instance, isn’t a coincidence of nature but an expression of healthy like- mindedness.“The world is a pool table,” our naked-headed CEO likes to tell us. “And all the people in it are either stripes or solids. You alone are the cue balls.”Rumor No. 5: Goldman Sachs is “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”Those words are of course taken from a recent issue of Rolling Stone magazine and they are transparently false.For starters, the vampire squid doesn’t feed on human flesh. Ergo, no vampire squid would ever wrap itself around the face of humanity, except by accident. And nothing that happens at Goldman Sachs — nothing that Goldman Sachs thinks, nothing that Goldman Sachs feels, nothing that Goldman Sachs does –ever happens by accident.(Michael Lewis is a columnist for Bloomberg News and the author of “Liar’s Poker,” “Moneyball” and “The Blind Side,” soon to be a major motion picture. The opinions expressed are his own.)To contact the writer of this column: Michael Lewis at mlewis1@bloomberg.netLast Updated: July 27, 2009 21:00 EDT

http://www.marketskeptics.com/2009/07/goldman-sachs-arrogance.htmlex:Goldman's entire business model is built on this type of lack of intelligence. You see, intelligent people don’t do things that aren’t in their long term best interest. All of Goldman’s actions, while profitable in the short run, doomed the company in the long run by wrecking the US economy:1) Front running trades with high frequency trading.2) Manipulating markets to make majority of options expire worthless.3) Creating dark pools of liquidity to hide insider trading.4) Turning regulators into toothless jokes.5) Stealing taxpayer dollars by subverting the executive branch of the government6) Etc…Goldman executives were clever enough to run the US economy ground, but too stupid to realize they were destroying their own firm in the process. Paying such idiots billions of dollars in compensation is a crime against capitalism.Positive aspect of the dollar’s imminent collapseWhen the dollar crashes, Goldman business model will be revealed for the fraud it is, like Madoff’s ponzi scheme. Goldman Sach people will go from being “geniuses” to “losers” in the blink of an eye.

This post may be redundant at this point in time but we must remember that many parts of society are responsible for the financial mess we are in. It is not just the “banksters” as many call them but the uniformed investment managers, chasing yield, and many Average Joe Americans (and Brits and Canadians) chasing the dream.When Greenspan took rates down to 1% back in 2003, many so called professional investment managers were not prepared to accept such low rates of return on their assets. They went looking for alternatives and creative investment bankers came up with the sub-prime product. In theory, just like the theory behind life insurance, not all sub-prime mortgages would go bad at the same time. By putting a lot of low quality mortgages into a CDO or similar vehicle and then dicing the CDO’s liabilities into various levels of risk, i.e. the equivalent of AAA, AA, A, BBB, etc., the structurers were able to create higher rated, high yielding investments for the yield hungry investors. In theory, many of these vehicles were sound. Nobody had any inkling that we were soon to enter a prolonged bear market in housing. None of the rating agencies foresaw the types of price declines we have experienced since 2005. The creation of these products produced yet another wave of cheap money to a class of borrower and fuelled the housing boom through the mid part of this decade. With rates at very low levels, pretty much everyone who wanted to buy a house, did.I suspect that when ARM contracts were entered into, nobody gave much thought to the risk of interest rates going higher and what impact that would have on the borrowers continued power to pay. In June of 2004, the Fed started the steady March from 1% Fed Funds to the 5.25% peak in early July 2006. That is a huge move, especially if one was financially stretched when taking out the commitment at lower rates. Two or three or four percent more on your mortgage is a lot of money. Sometime in 2005 the bull market in housing came to a screeching halt and rather than stabilising at higher prices, began the rout that continues today. Faced with mortgage payments they couldn’t meet, these new buyers were forced out and their homes became a glut on the market.Sure there’s been fraud along the way, in appraisals, lies about incomes, etc. But who is really responsible? The guy or gal that wanted to live the dream and bought a house they really couldn’t afford? The investment managers, not being prepared to accept low yields and getting involved in relatively sophisticated investment products they didn’t understand? The investment banks, who brought the latter two sides together? The ratings agencies that didn’t do sufficient stress tests? I think the answer is a combo of all of them. To blame it all on the “banksters” is pure nonsense.A lot is written on this site about how we should have just let the banks go belly up. Those views are tremendously niave. What happens to the deposits that are backed by bad assets rather than good? What happens to the wealth of Average Joe when his or her bank deposits evaporate? Some say, let the banks go belly, just guarantee the deposits. But that also is a multi trillion dollar exercise.I agree with IC and SWK that senior bankers have gotten off way to lightly. In exchange for the capital injections to keep them afloat, all senior management should have been replaced with no severance, no vesting of options and a pension reflective of the average bank employee, not the huge payouts to which they have been accustomed. But then that raises the question “with whom do we replace them?” Like most on this blog, I have plenty of questions but precious few answers.

@Independent Contractorcommon sense …however, against all common sense, I now believe the stock market will continue moving up to reinvigorate the Xmas retail seasonevery single day the word “recovery” labels the most horrifyingdrops in business, trade and employmentbetween infrastructure re-employment and the “wealth effect” due to a 10-12% rise in stocks, Xmas retail pick up will be labeled as a V-shaped recovery (starting)

I agree, PB. Turn over the rocks, and you will find that the key members of Congress, as well as the key cabinet secretaries, are little more than employees of the financial system.In short, the fox gaurds the henhouse.Independent Contractor

NO JOBS = NO RECOVERY..period!

The Ink is’nt even dry and all over the news today is Californias faces more Budget peril. Seems current solution did not address the core probelms. We will be at 20 billion problem by October. Seesm they can coem to grips or understand why Revenue income is dropping? Gee, I wonder Why? Wake up you idiots and look out the window.. NO JOBS ANYWHERE!This Tidal wave is rolling now and coming to a State near you!California’s fiscal charadeMonday’s agreement between Arnold Schwarzenegger, the governor of California, and state legislators seemed to promise a temporary resolution to an ongoing budget crisis. But before legislators had even had a chance to vote on it, Californians were indulging in that peculiar mix of sanctimony and surrealism which marks almost all political discourse in the state. “What about the children?” ran the headline over the letters section of the San Francisco Chronicle, as if the important divide in the state’s politics were between those who “care” and those who do not.Caring has nothing to do with it. California’s problems are those of “direct democracy”. The state’s laws are shaped by plebiscites to a degree unmatched outside of Venezuela. In voting on “propositions”, which sometimes touch on detailed budgetary matters, citizens of the Golden State have stood up consistently for two principles: the state should provide vastly more services to its citizens, and citizens should pay vastly less to the state. In 1978, Proposition 13 halved government’s take from property taxes; a decade later, Proposition 98 required the state to spend 40 per cent of its “general fund” on schools. Adding to the problem is the requirement of supermajorities for raising taxes.EDITOR’S CHOICEMore from this columnist – Dec-03The present impasse reflects a problem of long standing, even if its severity is unprecedented. Ronald Reagan won the state’s governorship in 1966 by promising to do something about the budget deficit, which had by then risen to a calamitous $194m. Today, the state not only has a $26.3bn (£16bn, €19bn) budget gap but is constrained by all sorts of powerful institutions and laws from closing it. Until recently the state issued “revenue anticipation notes” but its contractors will no longer accept them. California’s bonds are the lowest-rated of any state. Facing insolvency, Mr Schwarzenegger and legislators have proposed selling off billions of dollars’ worth of state assets, cutting the state’s university budget by 20 per cent and releasing 27,000 inmates from prison. Already the state has given mandatory furloughs of three days a month to state employees. “Furlough” is a euphemism. It means you do not get paid.At least those are concrete steps. But much of the budget plan hammered out on Monday consists of accounting tricks. Unable to go to the banks to borrow, the state is borrowing billions from local counties and communities by simply not disbursing the money it is supposed to. If cities really want their programmes funded, they can try the credit markets themselves. A payday that was supposed to come next June has been pushed back into July, so that it will fall in the following fiscal year. Another trick is the accelerated withholding of state income tax. Instead of deducting 25 per cent of taxes per quarter, the state will deduct 70 per cent in the first six months of 2010, so that 20 per cent of revenues from the next fiscal year will be brought forward into this one. This is not a solution. This is changing your phone number so you can get some rest from the bill collectors who are dunning you.Commentators often say that the problem in California is that it is too difficult to raise taxes. This is misguided on two levels. First, for all its difficulties, the state still manages to level the sixth-highest taxes in the nation. Second, when you are talking about economic growth or the role of the state, tax rates matter; but when you are talking about balancing the budget, what matters is that receipts, however they may be collected, match outlays.It is an enduring mystery why US pundits should see a difference between the philosophy of Democrats (who stand for spending more than you raise) and the Republicans (who stand for raising less than you spend). Typical was a Chronicle editorial blasting Republicans for their insistence that the budget crisis be resolved in a way that did not involve tax hikes. “Many of them,” the paper wrote, “would sooner see their children in second-rate schools and their cars on Third World roads before they would break their anti-tax pledges.” But wait. California already has second-rate schools. In fact, for all its mandates and its massive spending, it has abysmal schools. In the federal government’s National Assessment of Educational Progress, California usually vies with such states as Louisiana and Mississippi for the 50th spot.A stronger case can be made that tax revenues are too unpredictable. Here Proposition 13 is blamed for moving the burden from property to income taxes, which are more sensitive to economic fluctuations. In a boom economy, there is plenty of money to pay for the unemployment benefits that no one needs. When you have 12 per cent unemployment, as California does now, the state is too strapped to do anything. This accusation is true enough – tax systems themselves can be speculative. But a comparison of California’s fiscal crisis to the one that roiled Ireland this winter is instructive. Ireland’s problem was that it collected too much of its revenue through taxes on property (in that case, on transactions) and not enough through taxes on income.California’s fiscal difficulties are like a lot of things in life. Everyone warns you that there are certain hard and fast rules – like not confusing wishes with entitlements – that you break at your peril. You begin to break them and what happens? Nothing! Nothing at all, and for the longest time. You are like a ship that has lost its anchor. You can drift very pleasantly, day after day, believing you do not need an anchor at all, before one day you realise, quite suddenly, that you do.http://www.ft.com/cms/s/0/27fc634c-7879-11de-bb06-00144feabdc0.html

There’s a shocker. BTW, the taxes and fees more than double the costs of one of my basic landlines.

Excellent article.. So Mr. Fed, how are youi going to deal with this? Come on Ben Give us a good answer? As i have been saying, everything that ahs been done to date has been ad hoc fixes, with no clear solutions to the fundamental problems. they bascially have lived to fight another day, but 2010 portends that day may be be coming to end.Buddy, Can You Spare $5 Trillion?by John MauldinThere is no doubt that the US is in financial trouble. Those talking of a strong recovery are just not dealing with reality. But the US is in better shape than a lot of countries. This week, we begin by looking at Japan. I have written for years about how large their debt-to-GDP ratio is, yet they keep on issuing more debt and seemingly getting away with it. But now, several factors are conspiring to create real problems for the Land of the Rising Sun. They may soon run into a very serious-sized wall. And it is not just Japan. Where will the world find $5 trillion to finance government debt? We look at some very worrisome graphs. Those in the US who think that what happens in the rest of the world doesn’t matter just don’t get it. There is a lot to cover in what will be a very interesting letter. I suggest removing sharp objects or pouring yourself a nice adult beverage.Rest with charts and graphs at: http://www.safehaven.com/article-13892.htm

I’m shocked, shocked to hear that pouring gasoline on a fire will not put it out.What are we supposed to do?1) Modify underwater mortgages into underwater fixed 30, 45, or 60-year mortgages that will most likely run delinquent and into default?2) Modify underwater mortgages into at the money fixed mortgages that people who are still strapped most likely will not be able to pay? Who takes the writeoff? Do you think the banks will take it? No, it will be the few of us still paying taxes.3) Declare jubilee and discharge all debts? Sure, go ahead and expropriate what’s left of our savings to cover all the debts you’re writing off. Our Money will be worthless anyway.4) Since nearly every solution seems to involve Uncle Sam backstopping and shoveling tons of money into a big hole, why don’t we just declare a one or two year tax holiday and tell people to use the freed up funds to start paying their bills? At least there would be a modicum of market dynamic at work there.

I hate to state the obvious, but obviously some don’t see it. There is only one Arthur’s Ghost. How many people post as “guest” or “anonymous”? I prefer knowing the person I am conversing with.Take a stand; make your mark.Independent Contractor

He has a habit of being right…Video at: http://blog.macroaxis.com/2009/07/28/grantham-china-will-collapse/Grantham: China Will CollapseChina is bailing out the world economy, growing at 8% a year while the rest of the globe struggles.Unfortunately, if China bears are right, those days will soon be over.Jeremy Grantham of GMO is nervous about emerging markets, especially China.Our other perennial favorite – emerging market equities– has had an amazing recovery, all things considered, and is no doubt also vulnerable to a reassessment of how quickly the global economy is recovering. Deciphering the strength of the Chinese economy will also play a major role in formulating our view of any future relative strength of emerging. My colleague, Edward Chancellor, strongly suspects that the Chinese economy is dangerouslyunbalanced and very likely to come unhinged in the nextfew quarters, surprising the pants off investors.Meanwhile, Jeremy’s prediction earlier this year that S&P would soar to 1000-1100 and then collapse for 7 years seems right on track.

Watch GE capital – its in Big trouble. 563 Billion in Debt with only 33 Billion in tangible assests. Right now the Gov’t/Treasury/FDIC are backign it, but they are going down. GE parent does not have the resources to fix this either. This is what Bill O’rielly (like him or nooshas been saying for about 3 years and no one has wanted to listen. It is the next ticking time bomb that psoes serious Systemic risk to the economy and financial system. It was amazing they were not one of the 19 Stress tested institutions. They would have stood at the 7th largest if they were considered a bank. They are/were mor of a bank than GS. And overnight GS became a bank to so they couls steal taxpayer monay. I have to think they were excluded because they would have stood out like a sore thumb and failed the test miserably.

Calif WARN notices through DEC this year have BOA’s name all over them. My guess another 12000-20000 Jobs go poof! Plus we are not redoing mortgages, so why do we need the people. Oh and the imapct on about 600 Strip malls and shopping centers… Vacant- for lease- if you can afford to start a small business and pay your high health care coverage have we got some goos spae for you at the going rate.BofA Plans to Cut 10% of BranchesBy DAN FITZPATRICK WSJBank of America Corp. Chief Executive Kenneth Lewis told investors last week he is planning to shrink the company’s 6,100-branch network by about 10%, a pullback from the two-decade expansion that took the bank from coast to coast.Mr. Lewis discussed the plans during a meeting Thursday in the bank’s hometown of Charlotte, N.C., according to people familiar with the conversation. Liam McGee, president of Bank of America’s consumer and small-business bank, also said branch closures are in the works but added it would be premature to specify how many locations could be closed, these people said.

The good news is we are coming out of the recession so they say. The bad news is we are coming out of the recession so they say.

California still living life on the edge – of a fiscal abyssAfter five months of wrangling, our leaders in Sacramento have finally reached a deal on the budget. We now have an accord that will allow the state to stride strongly into the future – at least for another six months or so until we dip back into the red again.Of course, to get that deal, the budget-cutters slashed $9 billion from schools and universities. By some measures, we already have the fourth-worst elementary school education system in the country, but maybe with those cuts we can leapfrog over Mississippi, Alabama and New Mexico to finally make it to No. 1. (On the other hand, 20 other states cut education spending this year, so we’ll have competition on the race to the bottom.)The budget-cutters also chopped $1.4 billion from health care programs for the poor and borrowed nearly $4 billion from local governments, including an estimated $70 million to $100 million from the city of San Diego, since we’re so awash in cash that we don’t know what to do with it.Thank goodness that the Legislature didn’t try to balance the budget by raising the tax on cigarettes, which is what the nasty anti-cancer majority proposed to keep from cutting health services. A 33 percent minority was able to block that scheme.Nor did the Legislature slap a tax on the Big Oil companies, which have been taking petroleum out of the ground in California since 1861 without paying royalties. Every other oil-producing state imposes royalties, but heaven forbid that we should follow the lead of Alaska, Wyoming and Texas.Thanks to Gov. Arnold Schwarzenegger’s pledge to cut services instead of raising taxes, Occidental Petroleum – which generated $6.9 billion in profits last year – won’t have to pay royalties on that new, 150 million-to 250 million-barrel field it discovered in Kern County.Under Schwarzenegger’s proposal, multinational conglomerates also could have drilled off Santa Barbara without paying royalties – although the Legislature declined to back more offshore rigs.But all these steps – cutting services, pilfering city coffers – are mere stopgap measures, intended to keep the state running through December. They’re predicated on the notion that the economy will dramatically improve by then. Come January, we’ll have to start the cuts all over again, since it’s highly unlikely that our recession-weakened tax payments will be able to keep up with the recession-caused demand for more state services.http://www3.signonsandiego.com/stories/2009/jul/26/1b26dean19238-services-cut-no-new-taxes-8211-calif

Sad, Very Sad….It’s a shame when we have to rely on Foreign media to report what should headline news here…Whistleblower tells of America’s hidden nightmare for its sick poorWhen an insurance firm boss saw a field hospital for the poor in Virginia, he knew he had to speak out. Here, he tells Paul Harris of his fears for Obama’s bid to bring about radical changePaul HarrisThe Observer, Sunday 26 July 2009Article historyPatients without health insurance get dental care at a free clinic in Wise, Virginia, held every July for the past three years. More than 25,000 were treated in a weekend Photograph: John Moore/Getty ImagesWendell Potter can remember exactly when he took the first steps on his journey to becoming a whistleblower and turning against one of the most powerful industries in America.It was July 2007 and Potter, a senior executive at giant US healthcare firm Cigna, was visiting relatives in the poverty-ridden mountain districts of northeast Tennessee. He saw an advert in a local paper for a touring free medical clinic at a fairground just across the state border in Wise County, Virginia.Potter, who had worked at Cigna for 15 years, decided to check it out. What he saw appalled him. Hundreds of desperate people, most without any medical insurance, descended on the clinic from out of the hills. People queued in long lines to have the most basic medical procedures carried out free of charge. Some had driven more than 200 miles from Georgia. Many were treated in the open air. Potter took pictures of patients lying on trolleys on rain-soaked pavements.For Potter it was a dreadful realisation that healthcare in America had failed millions of poor, sick people and that he, and the industry he worked for, did not care about the human cost of their relentless search for profits. “It was over-powering. It was just more than I could possibly have imagined could be happening in America,” he told the ObserverPotter resigned shortly afterwards. Last month he testified in Congress, becoming one of the few industry executives to admit that what its critics say is true: healthcare insurance firms push up costs, buy politicians and refuse to pay out when many patients actually get sick. In chilling words he told a Senate committee: “I worked as a senior executive at health insurance companies and I saw how they confuse their customers and dump the sick: all so they can satisfy their Wall Street investors.”Potter’s claims are at the centre of the biggest political crisis of Barack Obama’s young presidency. Obama, faced with 47 million Americans without health insurance, has put reforming the system at the top of his agenda. If he succeeds, he will have pushed through one of the greatest changes to domestic policy of any president. If he fails, his presidency could be broken before it is even a year old. Last week, in a sign of how high the stakes are, he addressed the nation in a live TV news conference. It is the sort of event usually reserved for a moment of deep national crisis, such as a terrorist attack. But Obama wanted to talk about healthcare. “This is about every family, every business and every taxpayer who continues to shoulder the burden of a problem that Washington has failed to solve for decades,” he told the nation.Obama’s plans are now mired and the opponents of reform are winning. The Republican attack machine has cranked into gear, labelling reform as “socialist” and warning ordinary Americans that government bureaucrats, not doctors, will choose their medicines. The bill’s opponents say the huge cost can only be paid by massive tax increases on ordinary Americans and that others will have their current healthcare plans taken away. Many centrist Democratic congressmen, wary of their conservative voters, are wavering. The legislation has failed to meet Obama’s August deadline and is now delayed until after the summer recess. Many fear that this loss of momentum could kill it altogether.To Potter that is no surprise. He has seen all this before. In his long years with Cigna he rose to be the company’s top PR executive. He had an eagle-eye view of the industry’s tactics of scuppering political efforts to get it to reform. “This is a very wealthy industry and they use PR very effectively. They manipulate public opinion and the news media and they have built up these relationships with all these politicians through campaign contributions,” Potter said.Potter was witness to the campaign against Michael Moore’s healthcare documentary Sicko. The industry slammed the film as one-sided and politically motivated. Secret documents leaked from the American Health Insurance Plans, the industry’s lobby group, detailed the plan to paint Moore as a fringe radical. Potter now says the film “hit the nail on the head”. “The Michael Moore movie that I saw was full of truth,” he admits.Potter was also working for Cigna when it became embroiled in the case of Nataline Sarkisyan, whose family went public after Cigna refused to pay for a liver transplant that it considered “experimental” and therefore not covered by their policy. Cigna reversed this decision only hours before the Californian teenager died. “I wish I could have done more in that case,” Potter said.Such sentiments are rare in an industry that has given America a healthcare system that can be cripplingly expensive for patients, but that does not produce a healthier population. The industry is often accused of wriggling out of claims. Firms comb medical records for any technicality that will allow them to refuse to pay. In one recently publicised example, a retired nurse from Texas discovered she had breast cancer. Yet her policy was cancelled because her insurers found she had previously had treatment for acne, which the dermatologist had mistakenly noted as pre-cancerous. They decreed she had misinformed them about her medical history and her double mastectomy was cancelled just three days before the operation.Last month three healthcare executives were grilled about such “rescinding” tactics by a congressional subcommittee. When asked if they would abandon them except in cases of deliberately proven fraud, each executive replied simply: “No.”To Potter that attitude has a sad logic. The healthcare industry generates enormous profits and its top executives have a lavish corporate lifestyle that he once shared. Treating patients for their expensive conditions is bad for business as it reduces the bottom line. Kicking out patients who pursue claims makes perfect economic sense. “It is a system that is rigged against the policyholder,” Potter said. The congressional probe found that just three firms had rescinded more than 20,000 policyholders between 2003 and 2007, saving hundreds of millions. “That’s a lot of money that will now go towards their profits,” Potter said.A lot of that money also goes into contributions to politicians of both parties – $372m in the past nine years – and in lobbying groups to run TV ads slamming Obama’s plans. Many of these ads deploy naked scare tactics. One report said that the industry was spending $1.4m a day on its campaign. In the face of that, it is perhaps no wonder that the Senate has delayed its vote, dealing a massive blow to Obama. “I have seen how the opponents of healthcare reform go to work… they are trying to delay action. They know that if they keep the process going for months, and turn it into a big mess, then the political impetus behind it will lessen,” Potter said.Potter, who now works at the Centre for Media and Democracy in Wisconsin, says the industry is afraid of Obama’s reforms and that is why it is fighting so hard. It wants to deal him the same blow as it did Bill Clinton when it scuppered his attempt at reform in the 1990s. Potter admits that he is worried the industry might win again. “I have seen their tactics work. I have been a part of it,” he said. He knows he has no chance of ever working again for a major firm. “I am a whistleblower and corporate America does not tend to like that,” he said. But there is one thing Potter is not sorry about: leaving the healthcare industry and speaking out. “I have absolutely no regrets. I am doing the right thing,” he said.Comprehensive healthcare reform in the US has been an ambition of many presidents since the early part of the 20th century. None has succeeded in creating a system that gives all Americans the right to coverage. Barack Obama, below, is desperate to avoid the same fate.Finding a cureWhat is the current system?It is a complex mish-mash of systems. Millions of Americans have their own private healthcare plans, either individually or through their employer. About 47 million Americans have none. However, systems do exist to cover the very poor and the old. The system is fiendishly complex and full of loopholes, so even those with coverage can have it withdrawn.How bad is it?US hospitals are the best in the world if you can afford them. Many cannot, and an accident or sudden illness can often bankrupt someone.How does it compare with other countries?It depends how you measure things. The US spends about 16% of GNP on healthcare, far more than France and Germany, which spend 11 to 12%. Yet those countries provide universal care.What is the biggest problem?Critics say the biggest issue is the profit motive that drives US healthcare. This ensures that costs are always rising as the incentive is there to provide expensive treatment. It also gives health insurers the incentive to refuse treatment to claimants, by seeking to withdraw their cover.What is Obama’s solution?Obama has asked Congress to draw up a government option, allowing all Americans to get some sort of cover. The sheer size of the state plan should theoretically allow it to drive down costs by economies of scale.What’s happening now?Obama has put his reputation on the line to persuade wavering Democrats and moderate Republicans to vote on legislation by August. The Senate has said this will not happen. That’s a major blow, as it puts off the debate until September and could see the political momentum stall.

I agree whole heartedly. GE is going down. And when America’s crown jewel corporation is effectively nationalized, all hell is going to break loose.

This is why it is a pozi scheme. Why would average Joe american ever buy another stock? Who pays all these daily profits based on this type of strategy? Answer, the average stock investor who has now been made it to be an idiot. If you like being taken adavantage of, of being made out to be an idiot, then rush to bank, take what money you own and invest in Stocks.High-Frequency Traders Say Speed Works for Everyone (Update1)By Edgar Ortega, Jeff Kearns and Eric MartinJuly 28 (Bloomberg) — Frank Troise, the head of electronic equity trading products at Barclays Plc, says using computers to execute orders in milliseconds is no different than brokers jockeying for position years ago on the floor of the New York Stock Exchange.“This has been going on for quite awhile, and it’s now at a fever pitch,” says Troise, 43, who is based in New York. “There’s always been an advantage to executing with speed.”Policymakers are asking whether that advantage has become too great for so-called high-frequency traders, whose programs buy and sell shares up to 1,000 times faster than the blink of an eye. Defenders say the competition for profits that gave rise to today’s rapid-fire execution has roots that span decades and has helped reduce costs for investors.About 46 percent of daily volume is handled through high- frequency strategies, according to estimates by NYSE Euronext, the world’s largest owner of stock exchanges. The transactions are made by about 400 of the 20,000 firms trading stocks in the U.S., according to Tabb Group LLC, a New York-based financial services consultant. Each makes bets in hundredths of a second to exploit tiny price swings in equities and discrepancies in futures, options and exchange-traded funds.The firms compete for a slice of $21.8 billion in annual profits from equities and derivatives market making and arbitrage, according to Tabb. Among the largest are hedge funds Citadel Investment Group LLC, D.E. Shaw & Co. and Renaissance Technologies Corp., as well as the automated brokerages Getco LLC, Hudson River Trading LLC and Wolverine Trading LLC.‘Lot of Brainpower’Rapid-fire strategies helped equity volume more than double in the U.S. since 2006 to a record 10.8 billion shares a day last year, Nasdaq OMX Group Inc. data show.High-frequency programs look for patterns in securities markets. A typical strategy is based on the likelihood that a stock that rose over the past 20 hours will pare its gain, said Irene Aldridge, managing partner at Toronto-based Able Alpha Trading Ltd., a high-speed proprietary trading firm. Others sift through thousands of quotes to calculate the probability of a shift in the market.“There’s a lot of brainpower involved in this,” said Aldridge, whose book “High-Frequency Trading: A Practical Guide to Algorithmic Strategies and Trading Systems” is scheduled for publication in January 2010. “It’s profitable if you can capture a few basis points and do it a few times a day, and markets have evolved to support this.”Penny IncrementsU.S. equity exchanges have catered to such clients since at least 1997, when the NYSE ended its century-old practice of quoting stocks in eighths of a dollar. It shifted to penny increments in 2000. That eroded earnings for NYSE and Nasdaq market makers, who profit from the difference between bids and offers. For investors, it helped reduce trading costs.The exchanges sought to compensate for the lost business by paying rebates to high-frequency brokerages that buy shares at the best public prices. Exchanges have also overhauled their trading systems to cut transactions times and rent space in data centers so it takes less time to transmit information to buyers and sellers. Bats Global Markets processes orders in less than 400 microseconds, or 0.0004 second, which is about 1,000 times faster than humans blink their eyes.Partha Mohanram, a finance professor at Columbia University in New York, said that instead of imposing limits on the use of technology, exchanges should ensure everyone gets trading data at the same time.‘Same Priority’“The key is a level playing field, but you should not lower the playing field to make it level,” he said. “All you have to do is make sure everybody has the same level of access. I don’t think there’s anything wrong with high-speed trading per se if they have the same priority as any other investor.”As the strategies increased in speed, it became impossible for investors without advanced computer systems to get fair prices, according to some market participants. Firms handling large trades complained that brokers using complex algorithms fire off hundreds of orders and immediately cancel them in an effort to trick them into revealing plans to buy or sell.“If you’re trying to buy a big block of stock, the algorithms notice,” said Bart Barnett, head of equity trading at Morgan Keegan & Co. in Memphis, Tennessee. “It increases volatility and has an adverse effect on the prices customers get on stocks.”Holding OrdersNew York’s Charles Schumer, the third-ranking Senate Democrat, asked the Securities and Exchange Commission on July 24 to ban a practice in which some exchanges hold orders for a split-second before publishing them on competing platforms. Schumer said so-called flash orders are used by “sophisticated high-frequency traders” to get an edge.At Bats, the third-largest U.S. stock exchange, about half of its customers use flash orders, Chief Executive Officer Joe Ratterman said in an interview yesterday. The system is open to everyone and has resulted in brokers submitting orders that are more competitive, he said.Ratterman said the danger of flash trades is that brokers may grow reluctant to post publicly accessible quotes, opting instead to wait for flashed orders. That doesn’t mean the deck is stacked against small investors, he said.“The idea of haves and have-nots is just crazy to me,” Ratterman said. “Every firm in the U.S. has the ability to invest in the same way that every successful trading firm has done. Trading by definition is a competitive business.”Ben Townson of New York-based BlackBox Group, which uses high-frequency strategies and specializes in algorithmic trading, says “natural abilities and skills” determine who makes money, not computers.“You can throw a lot of money at technology, but if you don’t take the time to study your trades, it doesn’t matter,” Townson said. “We’ve built a racecar that is optimized for driving fast. Is that an advantage? Yes. Is it an unfair advantage? No.”

Giraf, I think Guest has answered your question implicitly. Moreover, the answers are all spawned all overthis forum, such as Fed’s transparency, not to keep on socializing losses of big corporations and privatizing as well as inflating their gains, etc.

Couldn’t agree more with you MM CA as highlighted in my earlier comment above, which is below Guest 2009-7-07 16:39:38. Since the current Administration took over NR’s view has softened and I suspect he has used his influence and popularity to shape policy outside the Administration

Greenspan and than Bernanke failed to stand up to the tide of greed and deregulation that swamped our economy. Yes, it would have been political suicide for them to scream about the real and present danger ahead but, this in theory was / is their job. They failed. Few “leaders” are willing to put their careers on the line in government. The gig is too good (prestige, benefits, retirement, etc.) and to take a non-popular stand is too forboading for most men/women. Our country’s domestic policies are influenced too much by self interest, rich groups (i.e. Wallstreet banks). NR… understands this, but the tide of resistance to change and scrutinize perpetrators of the financial meltdown is too great for anyone soul to swim through without drowning their career. We need almost a Ghandi type capable person to frame the financial atrocities that have occured in the U.S. The pool of those capable is shallow, and even shallower when you ask for a person self-assured and determined enough to carry the flag into battle.

Fool that I have been, but I thought the idea of capitalism was to INVEST in companies/products that support your local economy and thus sustain your community and way of life.Now this has evolved into bottom feeding and gaming the system. It is all about GREED!Let’s keep this ball rolling and see what kind of new Holocausted misery index can be inflicted on your fellow man. How do these people sleep at night?The criminal elite have no moral compass. It is a question all should be asking themselves when “playing” the markets.

Too true. I give Roubini credit for his integrity and effort but this an enormous task and the resistance is overwhelming.

Here’s your financial atrocities framed in the very biggest picture frame:ALL of this terrible horrible no good very bad CRAP going on that is sucking the quality from everyone’s lives and that everyone is buzzing about and everyone is angered and frightened by?ThisiswhatwealthpowergiantsDO.

maybe when consumer confidence drops to 0, our illustrious leaders will get the message: no jobs, no economy!

No argument here. They’ve been left unchecked and free to loot economies for a least 2 decades now. You’re right. Why should we be surprised? Unfettered capitalism will eat itself alive and spare no prisoners.

…so, where is the President in all this? Where is justice in all this?LB summed this up in 4 short paragraphs above as well anything I have read on the subject.We are a long, long way from the end of it, and I have to believe that before it’s over major reforms will somehow take place, but not before way more pain for athe average citizen.Independent contractor

Pity poor humanity – so blind, so innocent, so suffering.

Tyler Durden today–And readers say Zero Hedge is pessimistic. Don’t read this if you don’t want to break out of your MSM-induced happiness daze. Compliments of Matterhorn Asset Management. Snippet (The Dark Years Are Here):“All the money committed so far has only achieved two things: Firstly it has created some short term hope which together with totally illusionary sightings of green shoots have generated a small stock market correction (which we forecast in our January Newsletter) and some belief that the crisis is ending. Secondly, all the funds printed so far to save the system have gone to Wall Street but has done nothing whatsoever for the real economy. And what is the government doing about it. They are doing the only thing they know which is to print more money.This is total lunacy! How can any intelligent person believe that printed pieces of paper can solve an economic catastrophe?If that were the case we could all go home and write out pieces of paper or use Monopoly money to spend in the shops or repay our debts.Read more…http://www.zerohedge.com/

Just one suggestion, GSM. Instead of “Thank God for the Fed! Our Saviour,” could we make that, “Thank Paul Warburg for the Fed! Our Saviour.” God always likes to give credit, where credit is due. Great articles on the Fed, by the way. I’d already saved your two posts from the previous thread in my Documents.

Thank you, Independent Contractor, for that reply to devils advocate. A highly informative report: one of the first to evaluate the coming Christmas Season! That’s the kind of info I value most, straight from the source, the kind of info I can take to the bank, er, put under the mattress.

I second that motion!!I was hoping Paul would have got Obama asidein the first 30 days and said :”The corrections on and around Sept 15th probably could not have been helped BUT,you have two choices1.Continue the Paulson Bank Bailout after the fact OR 2.Put the “Too big to fail”through a specific Chapter 11 ,supervised by the C D I C staff,with the CDIC ,being given the $700 Billion of TARP FUNDS as backup to ensure all conventional depositers are covered off for their first $150,000 deposit.”To HELL with the the too big to fail,who created their own mess.Is this a FREE MARKET COUNTRY or not???? Free to take risk and free to fail .My recommendation to the President would be to followthe path of SWEDEN ,when faced with the same dilemma,allow them to go through an organized reconstruction on their own dime,not the public funds.This is the biggest financial fairy tale ever foisted on the U.S.Public.This is also the largest transfer of wealth from the Public Sector to the Private Sector in the history of the world.The consolidation of wealth to the few remaining Banks/Financials knowns no limits.Goldman Sachs/J P Morgan Chase recent results are evidence of that.They simply got rid of the competition indirectly.Who is in charge here?Obviously not the President.The same Bush procedures have simply been continued on. No mystery here.

If this wasnt such a serious subject,it would be FUNNY.Here we have Power People professing to be “Private Sector” / “Free Market” to their dying day, FULLY SUPPORTING a Fed Reserve which is a total CENTRAL PLANNING agency for their personal benefit .What is wrong with this picture ????

GE will not go down. They are essential to the Obama worldview, which is to destroy small to medium size businesses and to push everyone into employment at collective giants that are easier to monitor, police, and push around. Oh, and they run two of the House Organs (NBC & CNBC).

Unless you’ve actually lived under so-called “universal care” regimes and were actually sick enough to use the benefit, you really have no idea what you are talking about. I have, and you don’t. Assuming they get the diagnosis right, they might keep you alive. But then the MRSA that grows in poorly cleaned hospital will get you. And if you are too old, you won’t get that new hip, or glaucoma treatement, or whatever.Keep in mind that all the stellar examples of universal care that are tossed out as models had their failings precisely at the time when the boomers were working in paying more and more taxes into these systems, and now they are on the other end of the curve, so you aint seen nothing yet.

You are correct about the reality. Nevertheless there are ideals and “endlessly catching, collecting, cataloging, conveying, and critiquing the list of players gaming the system and the plays they make” is the only way to reconcile reality with the rules (ideals).You want to talk big picture? I have to teach an ethics course this fall. Ha! I feel like an idiot quacking away about ethics when these kids live in a cesspool of money, greed, and grab what’s yours. talk about irrelevant education!

The Federal Reserve should be audited by that store front CPA that worked for Madoff. That way we will know that everything is fine as the Good Ship Lollipop ska the United States of Amierca sinks beneath the waves. As for printing the money that should be outsourced to North Korea because they need the business. As for the Constitution and the oversight of money no one pays any attention to whatever a bunch of old white guys thought 200+ years ago. See and compare “natural born citizen.”

What’s wrong with putting a sane limit on crime?

The Economy Is Even Worse Than You ThinkThe average length of unemployment is higher than it’s been since government began tracking the data in 1948.By MORTIMER ZUCKERMANThe recent unemployment numbers have undermined confidence that we might be nearing the bottom of the recession. What we can see on the surface is disconcerting enough, but the inside numbers are just as bad.The Bureau of Labor Statistics preliminary estimate for job losses for June is 467,000, which means 7.2 million people have lost their jobs since the start of the recession. The cumulative job losses over the last six months have been greater than for any other half year period since World War II, including the military demobilization after the war. The job losses are also now equal to the net job gains over the previous nine years, making this the only recession since the Great Depression to wipe out all job growth from the previous expansion.Here are 10 reasons we are in even more trouble than the 9.5% unemployment rate indicates:David Klein- June’s total assumed 185,000 people at work who probably were not. The government could not identify them; it made an assumption about trends. But many of the mythical jobs are in industries that have absolutely no job creation, e.g., finance. When the official numbers are adjusted over the next several months, June will look worse.- More companies are asking employees to take unpaid leave. These people don’t count on the unemployment roll.- No fewer than 1.4 million people wanted or were available for work in the last 12 months but were not counted. Why? Because they hadn’t searched for work in the four weeks preceding the survey.- The number of workers taking part-time jobs due to the slack economy, a kind of stealth underemployment, has doubled in this recession to about nine million, or 5.8% of the work force. Add those whose hours have been cut to those who cannot find a full-time job and the total unemployed rises to 16.5%, putting the number of involuntarily idle in the range of 25 million.- The average work week for rank-and-file employees in the private sector, roughly 80% of the work force, slipped to 33 hours. That’s 48 minutes a week less than before the recession began, the lowest level since the government began tracking such data 45 years ago. Full-time workers are being downgraded to part time as businesses slash labor costs to remain above water, and factories are operating at only 65% of capacity. If Americans were still clocking those extra 48 minutes a week now, the same aggregate amount of work would get done with 3.3 million fewer employees, which means that if it were not for the shorter work week the jobless rate would be 11.7%, not 9.5% (which far exceeds the 8% rate projected by the Obama administration).- The average length of official unemployment increased to 24.5 weeks, the longest since government began tracking this data in 1948. The number of long-term unemployed (i.e., for 27 weeks or more) has now jumped to 4.4 million, an all-time high.- The average worker saw no wage gains in June, with average compensation running flat at $18.53 an hour.- The goods producing sector is losing the most jobs — 223,000 in the last report alone.- The prospects for job creation are equally distressing. The likelihood is that when economic activity picks up, employers will first choose to increase hours for existing workers and bring part-time workers back to full time. Many unemployed workers looking for jobs once the recovery begins will discover that jobs as good as the ones they lost are almost impossible to find because many layoffs have been permanent. Instead of shrinking operations, companies have shut down whole business units or made sweeping structural changes in the way they conduct business. General Motors and Chrysler, closed hundreds of dealerships and reduced brands. Citigroup and Bank of America cut tens of thousands of positions and exited many parts of the world of finance.Job losses may last well into 2010 to hit an unemployment peak close to 11%. That unemployment rate may be sustained for an extended period.Can we find comfort in the fact that employment has long been considered a lagging indicator? It is conventionally seen as having limited predictive power since employment reflects decisions taken earlier in the business cycle. But today is different. Unemployment has doubled to 9.5% from 4.8% in only 16 months, a rate so fast it may influence future economic behavior and outlook.How could this happen when Washington has thrown trillions of dollars into the pot, including the famous $787 billion in stimulus spending that was supposed to yield $1.50 in growth for every dollar spent? For a start, too much of the money went to transfer payments such as Medicaid, jobless benefits and the like that do nothing for jobs and growth. The spending that creates new jobs is new spending, particularly on infrastructure. It amounts to less than 10% of the stimulus package today.About 40% of U.S. workers believe the recession will continue for another full year, and their pessimism is justified. As paychecks shrink and disappear, consumers are more hesitant to spend and won’t lead the economy out of the doldrums quickly enough.It may have made him unpopular in parts of the Obama administration, but Vice President Joe Biden was right when he said a week ago that the administration misread how bad the economy was and how effective the stimulus would be. It was supposed to be about jobs but it wasn’t. The Recovery Act was a single piece of legislation but it included thousands of funding schemes for tens of thousands of projects, and those programs are stuck in the bureaucracy as the government releases the funds with typical inefficiency.Another $150 billion, which was allocated to state coffers to continue programs like Medicaid, did not add new jobs; hundreds of billions were set aside for tax cuts and for new benefits for the poor and the unemployed, and they did not add new jobs. Now state budgets are drowning in red ink as jobless claims and Medicaid bills climb.Next year state budgets will have depleted their initial rescue dollars. Absent another rescue plan, they will have no choice but to slash spending, raise taxes, or both. State and local governments, representing about 15% of the economy, are beginning the worst contraction in postwar history amid a deficit of $166 billion for fiscal 2010, according to the Center on Budget and Policy Priorities, and a gap of $350 billion in fiscal 2011.Households overburdened with historic levels of debt will also be saving more. The savings rate has already jumped to almost 7% of after-tax income from 0% in 2007, and it is still going up. Every dollar of saving comes out of consumption. Since consumer spending is the economy’s main driver, we are going to have a weak consumer sector and many businesses simply won’t have the means or the need to hire employees. After the 1990-91 recessions, consumers went out and bought houses, cars and other expensive goods. This time, the combination of a weak job picture and a severe credit crunch means that people won’t be able to get the financing for big expenditures, and those who can borrow will be reluctant to do so. The paycheck has returned as the primary source of spending.This process is nowhere near complete and, until it is, the economy will barely grow if it does at all, and it may well oscillate between sluggish growth and modest decline for the next several years until the rebalancing of excessive debt has been completed. Until then, the economy will be deprived of adequate profits and cash flow, and businesses will not start to hire nor race to make capital expenditures when they have vast idle capacity.No wonder poll after poll shows a steady erosion of confidence in the stimulus. So what kind of second-act stimulus should we look for? Something that might have a real multiplier effect, not a congressional wish list of pet programs. It is critical that the Obama administration not play politics with the issue. The time to get ready for a serious infrastructure program is now. It’s a shame Washington didn’t get it right the first time.Mr. Zuckerman is chairman and editor in chief of U.S. News & World Report

I agree with this, except for one thing: the majority of ‘players’ will still be involved, whether in the financial sector, government sector, etc. It’s easy to focus on hosing down the tree that’s on fire, but beware of thinking that you have the fire put out–its roots might be smoldering underneath, ready to burst into fresh flames.

I take all posts written by insubstantial phantoms seriously.

http://www.thestar.com/news/gta/article/671988Say what?“Chinese government assistance so generous, that Chinese firms can afford to buy granite from halfway around the world,(canada) ship it home, cut it into finished pieces, ship it back around the globe and still sell the resulting product for at least 40 per cent less than comparable granite manufactured here.” gawsh so much for buying local….i wonder if all those asbestos products shipped that way come back and bite ya on the arse

Hi, guest. We have one more month to go until the no-job sword of Damocles (did i spell that right?) falls.

Where are the protests? When do people stand in the streets arm in arm against the power elite, what we need is precisely class warfare spelled out and blatantly declared. People appear to be selfishly looking out for their own skin instead of taking up our common cause.

Yes, I think you spelled it right. I’ll be thinking of you and hoping that things work out somehow.

Me too. I debate or defend ideas, not personalities.

Not sure what you mean by “long”. If it’s buy & hold, those t-bills are going to look mighty good about October. If you liked last fall & winter, you are going to love the coming seasons.Independent Contractor

I wouldn’t have put it quite so harshly, but I generally agree with your sentiments. As public outrage gains momentum, I suspect that Obama will gain more political clout.Leastwise, I’m hoping so.

For the life of me, I could not figure out where the silver lining was until your last few sentences! I’m glad you were able to get a new roof out of it, but sorry for the rest of the damage.

I want to speak to this, but can’t right now. I’ll try to get back, because I say there’s something better than protesting … something far, far better … and also we need to get clear that it IS taking care of one’s own skin that should motivate everyone – but you are not taking best care of your own skin at all if you are letting your environment be ruined…and all the other people on the planet who are not you, are your environment.

At the outset, let me say that I very much respect London Banker and his views. Is his assessment fair in my view?>The Federal Reserve System has regulatory oversight of all bank holding companies – those companies that have more than 25 percent ownership of any bank.Agreed.>Back in the good old days, no bank holding company could own both a bank and a broker-dealer, commodities broker or insurance company. This meant that the bank couldn’t be used to subsidize speculative businesses with cheap credit. It also meant bank holding companies were limited in scale, and couldn’t become such huge mega-corporations. That system worked at ensuring risks in the banking sector were the sorts of credit risk and liquidity risks that banks were proven good at managing, and no bank failure, even Citibank, ever rose to be a sizeable systemic threat to the overall welfare of the economy.Agreed.> Greenspan changed all that.I agree that Dr. Greenspan was entirely too deferential to an idealistic and unrealistic vision free market. He can’t be blamed for everything that went on, though. There was an entire constellation of players acting in concert, consciously or not, over the course of three decades to bring us where we are today.>With the repeal of Glass-Steagall and aggressive Fed lobbying to keep all OTC derivatives unregulated, aggressive promotion of interstate banking and consolidation, the Fed switched sides from protecting the American public from corruption of the banking system, to protecting the banks, their shareholders and affiliates from investigation of their increasing corruption and speculative excess.I’m not sure just how much of a hand the Fed had in the repeal of Glass-Steagall, other than not to object. If the Fed was involved in “aggressive lobbying to keep all OTC derivatives unregulated,” that was a colossal mistake. So would have been promotion of interstate banking and consolidation, but of course, this trend towards bank deregulation and territorial expansion really got started soon after Reagan entered his first term, when Dr. Volker was Chairman of the Fed. I certainly agree that the Fed, and Dr. Greenspan in particular, could and should have done a better job of assessing the risks of “speculative excess” and of reigning in the financial industry as a whole.>Bernanke has aggressively promoted the same deregulation positions originally forced through by Greenspan. He opposes oversight of derivatives. He opposes limitations on bank credit to securities/derivatives/insurance affiliates. He opposes restrictions on corrupt international banking practices that disguise profits and avoid taxes. He opposes restrictions on mergers and acquisitions which would limit systemic risk scale. He opposes the Fed enforcing the laws and regulations that would have prevented the massive credit and investment imbalances of the past two decades.I’m not so sure how much of this remains true. There is no question that Dr. Bernanke completely failed to recognize in advance many things that Dr. Roubini foresaw clearly, including the collapse of the housing market and the degree of impact that would have on the economy, and that he was pretty sanguine about many dangers, such as credit default swap exposure, very late into the game. Still, he has been very creative in brining his vast knowledge of the Great Depression to bear in crafting unprecedented responses to unprecedented problems, and I think these actions have averted, for now, a much worse crisis.>To suggest that Bernanke should be reappointed Fed chairman is like suggesting a mobster shouldn’t be prosecuted for murder because he sent such nice flowers to the funeral.I think this conclusion is a bit over the top, although I appreciate the entertaining simile. I don’t believe it’s fair to suggest that Bernanke has only “sent…nice flowers to the funeral,” although it could be justly said that he seems to have been utterly oblivious during the drive-by shooting that caused the murder.SWK

Warning notices given anywhere from 60 days notice to as long as company wants to inform on how laying off workers. Genrally applies to more than 50 workers in one area. Varies a little from state to state.Here are some of the ones for California to occur in august. this is nto all Calif… i ahev anothe rlink for the entire state but cant find it.http://www.sfgate.com/webdb/jobcuts/?appSession=671010871751060For December:http://www.sfgate.com/webdb/jobcuts/?appSession=412101087383431

The Better WayBe realistic – then be careful not to follow the herd over the cliff – even if it will make you rich in the things of this world.The greatest truth of life is that each is being asked to evolve to an ever higher consciousness (worldview) and corruption is not a part of it. It is your life so don’t buy into the collective bullshit – let them go to their “reward.”Follow your truth even it the masses don’t.

Reparations By Way Of Health Care Reform / It’s affirmative action on steroids, deciding everything from who becomes a doctor to who gets treatment on the basis of skin color.Posted by lornakismet on July 27, 2009By INVESTOR’S BUSINESS DAILY…not only our wealth, but also our health will be redistributed.[Legislation: Still believe in post-racial politics? Read the health care bill. It’s affirmative action on steroids, deciding everything from who becomes a doctor to who gets treatment on the basis of skin color.]President Obama is on the record as being officially opposed to reparations for slavery. But as with other issues, you have to sift through his eloquent rhetoric and go beyond the teleprompter to get at what he really means.His opposition to reparations is based on the fact they don’t go far enough. In a 2004 questionnaire, he told the NAACP, “I fear that reparations would be an excuse for some to say, ‘We’ve paid our debt,’ and to avoid the much harder work.”Never mind there are those who thought we apologized at Gettysburg and that an African-American president is a recognition of the hard work that has been done.At a press conference with minority journalists last fall, candidate Obama was pressed for more detail on his reparations position. He said he was more interested in taking action to help people who were just getting by. Because many of them are minorities, he said, that would help the same people who would benefit from reparations.“If we have a program, for example, of universal health care, that will disproportionally affect people of color, because they are disproportionally uninsured,” Obama said.This may be a goal of Obama’s health care plan: the redress of health care disparities on the basis of race and the punishment of those believed to be responsible, such as greedy doctors who perform unnecessary tests and procedures and greedy insurance and drug companies lusting for profits.In his health care plan published during the campaign, it was written that Obama and Biden will “challenge the medical system to eliminate inequities in health care by requiring hospitals and health plans to collect, analyze and report health care quality for disparity populations and holding them accountable for any differences found.”House Speaker Nancy Pelosi repeated this when she addressed the NAACP this month, saying: “It is a moral issue for our country to reduce health disparities, whether in diabetes, asthma, heart disease, cancer and HIV/AIDS.”The racial grievance industry under health care reform could be calling the shots in the emergency room, the operating room, the medical room, even medical school. As Terence Jeffrey, editor at large of Human Events puts it, not only our wealth, but also our health will be redistributed.Under the Democrats’ plans, if a medical school wants to receive contracts and grants from the federal government, it must operate under a quota system and be able to prove it. On Page 909, the House bill states: “In awarding grants or contracts under this section, the (HHS) secretary shall give preference to entities that have a demonstrated record of the following: . . . training individuals who are from underrepresented minority groups or disadvantaged backgrounds.”Jeffrey points out that in the name of eliminating “disparities” in health care, under the House version of the bill, payment to providers under the public option becomes a sort of Pavlovian reward and punishment system.“The secretary,” says Section 224, “shall design and implement the payment mechanisms and policies under this section in a manner that — (1) seeks to . . . reduce health disparities (including racial, ethnic and other disparities).”Everyone deserves the best health care and doctors. That will not happen under a plan that emphasizes affirmative action and leads to rationing.As the case of the New Haven, Conn., firefighters shows, reverse discrimination is wrong and dangerous.Whether it’s that firefighter coming up the ladder, or the brain surgeon about to remove that tumor in your head, everybody wants that person to be the best regardless of race or ethnicity — and not admitted by quotas and promoted by political correctness.That’s what all Americans are owed.http://lornakismet.wordpress.com/

I tend to believe that the advent of World War II ended the Great Depression to be a bit simplistic. My understanding is that while unemployment was slow to come down, the GDP rose an average of about 9.5% from 1933 to 1937. Various economists, such as Milton Friedman, have suggested that the premature implementation of tight money policies and too-early attempts to balance the federal budget caused the recession of 1937 to stall recovery that otherwise would have happened, even in the absence of WWII spending. Fed Chairman Ben Bernanke, an acknowledged expert on the Great Depression, reframes the question in this interview segment:Interviewer:”What ended the Great Depression?”Dr. Bernanke:”We could turn it around and ask why didn’t the Depression end quicker than it did? Once the gold standard was removed, and the banking system was stabilized by the banking holiday and the subsequent actions that Roosevelt took, the two main impediments to recovery were removed and there was evidently some natural tendency of the economy to begin to right itself. Indeed, 1933 and 1934 were years of rapid gains in the stock market and even reasonably good economic growth. So the question is perhaps not what ended the Depression but what thwarted the recovery in the mid and late 1930s? Again I think that the wage and price controls of the NIRA and other interventions that tried artificially to reflate through fiat rather than through monetary forces were a major factor.”There may have been some elements of hysteresis in that once the unemployment rate had gotten to such a high level, people had lost skills or firms were slow to recover and re-employ workers. But, again, broadly speaking, putting the puzzle the other way, why didn’t the economy recover more quickly? Particularly in the early stages after Roosevelt became president it appeared as if things were turning around pretty quickly.”SWK

Well, fur’s I can see, I ain’t in the pitcher. Seems I’m jest to pay fur the photograhy.

Gloves on or off, you always manage to elevate the tone of this blog.That’s class!

Can I still qualify for that service as ‘Guest 42′?Being spooked would be an interesting experience!

gee, MCD pay their worker $7.25/hr, because flipping burger is really not a high pay skill set. dentist pay their dental assistant $20+/hr, because there is various skills demand of dental assistance by dentist. in america, everyone is fairly compensated by their skill set in demand. whining is not gonna get you higher pay.

I was not endorsing the use of epithets in this piece. The facts, however, speak for themselves. These rumors are not only inane, but insane. How does one account for not one, but two newspapers, the 1961 archived editions of which confirm the same fact? I guess some folks just can’t stand the fact that there is a non-right-wing black man in the White House, and no proof will ever be sufficient to quell this silly story (and please don’t try to tell me that all this malarky is not about the race and perceived liberal politics of the President).SWK

Gosh, thanks! Being a descendant of tribes of savage Picts and Norse Vikings (as well as of the wily Celt), I am not inclined to back down from a fight, but I certainly prefer the company of gentle people with an interest in learning from one another. I deeply appreciate your compliment.SWK

Sorry guys. He’s one term president.

ps.this link is nice..http://www.maths.gla.ac.uk/~fhg/waves/

Fitch: Financial Companies Hold 99.7% Of All Derivative ContractsSubmitted by Tyler Durden on Tue, 07/28/2009 – 15:12Fitch has released a comprehensive study on derivatives held by various corporations and has come out with some disturbing results: as Zero Hedge’s recent disclosure of data from the Office of the Comptroller of the Currency confirmed, the bulk of the derivative risk is concentrated not merely in the “financial company” category (99.7%) but in a subset of just five companies, which account for an “overwhelming majority” of derivative assets and liabilities.The companies in question (Total Notional Derivatives: Assets & Liabilities, $ in Trillions)· JP Morgan:$81.7;· Bank of America:$80.0;· Citigroup:$31.5;· Morgan Stanley:$39.3, and of course· Goldman Sachs: $47.8 (this is an OCC estimate: Goldman has not disclosed notional amounts in their derivative book, only # of contracts);If you want a preview of what the Basel III definition of “Too Big To Fail” will look like, the above five companies is a great place to start.For those unfamiliar with the concept of derivatives, here is a good blurb provided in the Fitch report:“Companies use derivatives to manage risks related to interest rates, foreign currency exchange rates, equities, and commodity prices, as well as more obscure risks such as weather and longevity. According to the Bank of International Settlements, the notional amount of the global over-the-counter derivatives market was nearly $600 trillion at the end of December 2008. Furthermore, gross market value (the sum of gross derivative assets and gross derivative liabilities) stood at $33.9 trillion …” (read more)http://www.zerohedge.com/article/fitch-financial-companies-hold-997-all-derivative-contracts

Guest:You are recasting AJ’s point as something it’s not. She is NOT talking about the understandable difference between the incomes of those who are paid for unskilled labor and those who are paid for skilled labor. She is talking instead, I believe, about the outrageous and unjust disparity in the incomes of the wealthiest one percent of this country and the other 99% of Americans, many of whom struggle to make a decent living.As I have argued in previous threads, the social, political, and economic consequences of such disparity are substantial. Inordinate asymmetry in the distribution of wealth and income between socio-economic groups within our society impedes economic growth, because it results in insufficient labor income to fund consumption and excessive capital chasing too few investment opportunities. The concentration of wealth in the hands of too few also fosters corruption of our government as the rich seek to retain, consolidate, and further aggrandize their already monumental pecuniary holdings, and thereby effectively serves to disenfranchise most of the electorate and shut out even hard-working citizens from making a decent life for themselves and their families. The imbalance in wealth and income that developed in the 1920s under insufficiently progressive tax policies and the social, economic, and political conditions arising from this imbalance contributed significantly to the depth, breadth, and length of the Great Depression. It is in the interests of all of us, then, to ensure that extreme disparities in income are adequately modulated by effective and adequately progressive tax policies.The notion of a “winner take all, every man for himself” society belies the democratic ideals on which the United States was founded and, it would seem, would be embraced only by those who are more than a little ignorant of fundamental civics. Any callous philosophy based on the false premise that no one should be forced to make any sacrifice or compromise of his values or property for the benefit of others is anathema to America, and should be roundly condemned as such.SWK

The government’s CPI as a constant measure of the standard of living via a fixed assortment of price comparisons and later substituting prices of, say hamburger for steak, is a classic case of comparing apples to oranges…and statistical fraud.

Darryl Schoon:DIVIDE AND CONQUER THE TWO-PARTY DANCE OF DISASTERInstead of helping to solve society’s problems, the democratic process has been diverted by powerful and well-organized special interest groups. This diversion is accomplished by exploiting the conservative and liberal tendencies of the electorate, a diversion that enables special interests to maintain control no matter what party wins.By exacerbating the natural tensions existing within society, special interests use politicians and the media to control the political dialogue, emphasizing issues that divide and inflame the electorate thereby diverting attention away from the destabilizing, dangerous and self-serving aims of special interests.After every election, either conservatives or liberals will feel that victory has been achieved, their ideological opponents temporarily vanquished, their political ends accomplished; but nothing could be further from the truth as both conservatives and liberals have been duped in the process, a process best described as political pornography—as the aftermath is always somehow unfulfilling, no matter how exciting the initial attraction and foreplay.In the end, very little gets solved, problems persist and proliferate, and the electorate becomes increasingly disillusioned—that is, until a new candidate is found by the special interests to again raise the hopes of both conservatives and liberals that this time it will be different.SPECIAL INTEREST GROUPS AND THE RISE AND FALL OF NATIONSThe ability of special interest groups to dominate democracies is surprising only because democracies are relatively new; notwithstanding the Greek city-states and the earliest reports of democracy in ancient India—and my parody of an earlier imagined attempt, http://www.drschoon.com/articles/DemocracyInTheMadhouse.pdf .Special interest groups far predate the modern democratic state. According to American economist, Mancur Olsen (1932-1988), author of The Rise And Decline Of Nations: Economic Growth, Stagflation, And Social Rigidities, 1982, Yale University Press, special interest groups arise in all nations and it is their presence and power that ultimately destroys the nations they dominate.Mancur Olsen’s theory, the Logic Of Collective Action, posits the longer a nation is stable, the more likely special interest groups will rise and dominate that nation’s affairs and economy, making that nation less efficient and less productive and by so doing contribute to its ultimate downfall.In a paper at Cornell University, Chia-chen Chou sheds light on Olsen’s Logic of Collective Action as follows:Special interest organizations and collisions (distributional coalitions) reduce efficiency and make political life more divisive. Distributional coalitions struggle to maximize their own self-interests, that is, share of the national income rather than finding ways of increasing this income. [bold mine]:Thus, special interest groups attempting to get a bigger slice of the pie will lead to decreased societal production…The underlying logic of collective action and its implications provide a general explanation for the economic growth and decline of states. The longer the period of stable government, the more special interest groups will form to rob the economy. [bold mine]:Olsen’s Logic of Collective Action explains the increasing divisiveness of American politics, Wall Street’s successful robbery of America’s wealth, and the military-industrial complex’s role in America’s demise as a world power; and now that these issues have been resolved, the question remains, what’s next?

Yeah! What he said, ’cause for sure I couldn’t have said it better myself.Thanks once again, SWK ;~)Independent Contractor

Bravo! Guest: is this so difficult to understand? Can you tell me what is your ideal of society? “Winner takes all” is fascism.

The Case Against the Fed by Murray N. RothbardIntroduction: Money and Politics1. The Genesis of Money2. What is the Optimum Quantity of Money?3. Monetary Inflation and Counterfeiting4. Legalized Counterfeiting5. Loan Banking6. Deposit Banking7. Problems for the Fractional–Reserve Banker: The Criminal Law8. Problems for the Fractional–Reserve Banker: Insolvency9. Booms and Busts10. Types of Warehouse Receipts11. Enter the Central Bank12. Easing the Limits on Bank Credit Expansion13. The Central Bank Buys Assets14. Origins of the Federal Reserve: The Advent of the National Banking System15. Origins of the Federal Reserve: Wall Street Discontent16. Putting Cartelization Across: The Progressive Line17. Putting a Central Bank Across: Manipulating a Movement, 1897–190218. The Central Bank Movement Revives, 1906–191019. Culmination at Jekyll Island20. The Fed at Last: Morgan–Controlled Inflation21. The New Deal and the Displacement of the Morgans22. Deposit “Insurance”23. How the Fed Rules and Inflates24. What Can Be Done?http://mises.org/story/3480

Listen, I’m not whining, dood, I’m just damned mad.I’m angry that I’ve hewed to the principles of honesty, hard work and integrity in my personal and worklife. I’ve paid my dues and my debts. I’m no rocket scientist, but I’m a damned good employee.I expected my tax dollars to go toward helping those less fortunate, such as the elderly and infirm, not to bail out the casino players on Wall Street.I expected my elected representatives to safeguard my civil liberties and keep a watchful eye on my portion of the public purse.I wanted my tax dollars to be invested so that when I grew elderly or infirm, I could live my end days in some dignity, because I have neither the smarts nor the capital to be an oligarch. I accepted my middle class lot in life and never wanted or needed more than that which I have now.I believed when I was told that I didn’t need to save my own money anymore because of the miracle of compound interest in the mutual funds of my employer-mandated 401(k). Why bother saving when the market gave me 25% for doing nothing? Buy and hold, indeed.More’s the fool I. 1987–market crash. 2000–market crash. 2008–market crash. And eighty percent of the working class who believed right along with me, for the past 30 years.Ross Perot’s Great Sucking Sound is more like a Great Flushing Sound.Ergo, I reserve the right to be angry at the state of things in this beloved, battered country on behalf of those who aren’t sitting behind those fabled closed-door meetings up on Capitol Hill and Wall Street and who are The Real Deciders.Kilgores, you are a true gentleman and I thank you for your support.

Hi LB,I totally agree that a large part of the blame for this crisis falls on the shoulder of the federal reserve. And yes, I think Bernanke should not be allowed to continue. However, my greatest fear is that whoever takes over will be far far worse. So far, Bernanke has not overtly monetised the federal deficit, and from some sources, he apparently may have come round to the fact the inflation will not be the issue but hyperinflation. The next person to take over might not necessarily have that view. The world is perched on a crossroad looking down on 2 paths: hyperinflation, or deflationary depression/recession. Clearly, the latter will be preferable to the former, but it is a politically palatable path? The former will lead to short term stability but end is a far far worse situation in less than 12 months.The Federal Reserve has failed in its task as a regulator. Will it also fail in its task as a preserver of the value of money? It all boils down on who sits at the hot seat. I would love a German to head the Fed.

Fu.K the Fed. 99% of americans have no clue who they are, what they do. If they did, they would hang them by thier fingernails outside each FED regional office.

I see nothing promoting an agenda in Obama’s comments. He’s opposed to reparations, and he is right that much work still needs to be done combatting racism and redressing the wrongs that have occured due to racism. How can you argue with that? The position of the article is “damned if you do and damned if you don’t”. It’s typical right-wing doublethink. Note the phrase “the racial grievance industry”. Reminds me of an article on healthcare I read in the Weekly Standard on healthcare reform in which they claimed that too many people “have a bias against out-of-pocket cash expenditures for health care.” Haven’t we been Roved enough?

Where is Obama when we need him? Does he just propose and then cave in?

CPI is also called the Constant Pain Index these days!

I’ll feel better just as soon as I get my first end-of-life counselling session (it’s in the House health-care bill).Isn’t it interesting that the people running the show who were indoctrinated with movies like Soylent Green and Logan’s Run are the very people who seem to be taking us down the road to that very kind of world?

This isn’t about greed, this is about control, and it hasn’t been capitalism for quite some time.

Again, I’ll feel better just as soon as I get my first end-of-life counselling session (it’s in the House health-care bill).Isn’t it interesting that the people running the show who were indoctrinated with movies like Soylent Green and Logan’s Run are the very people who seem to be taking us down the road to that very kind of world?

He’s too busy trying to smooth over the fact that the nation’s Chief Law Enforcement Officer gave a public knee-jerk dissing of Cops.Wonder if he will notice that he also dissed the Docs.

Ayy! How does fed spend TAXPAYER money. Unless by TAX you mean inflation. China is not a taxpayer, but will pay for the actions of the fed and so will any holder of $.

RE: The Fed.I can see from many commenters that there are a lot of “Stockholmers” on this blog- captured by the notion of the Fed as their great financial protector. Sadly this defies all common logic.The US Fed is the perpetrator of the crime, not the system that offers protection from it.Try to rationalize this; How can it be remotely possible that a secretive private entity, omnipotent and unauditable, can effectively regulate it’s Masters in an open and just manner? Trillions of dollars in liquid Govt backed debt instruments have been tranferred directly from the Fed to it’s Masters (in exchange for worthless crap)without any approval of Congress, in such ad-hoc fashion that the Fed cannot account for hundreds of Billions of it. This is taxpeyers money btw. This is oversight, this is accountability? It’s laughable. It’s also terminal.”Stockholmers” don’t see a problem with this, captured as they are.For them the Fed is a principled and sound organisation. I’m pleased LB weighed in with his professional take to put paid to any fanciful notion that the Fed acts with the interests of “the greater good”.It’s not easy to awaken to the understanding that it’s all been rigged , that you have been born into a scam designed to fleece you all of your life.And now that the Ponzi US financial system is in the process of it’s terminal decline, that collapsing facade is exposing how truly obcene the obfuscation of US citizens has been since 1913.The Founding Fathers gifted a great nation to it’s citizens. Generations later, the citizens are looking on as it is all pissed away in an orgy of theft under the very noses of their elected officials. I’m wondering at what point, at what level of pain will the real push back begin. I suspect when U6 unemployment reaches 25%+ we will start seeing real and serious social disconnects.At that point even J6P will see that the host is dead, then look out.

SWK, with respect, could you give us some data to support your arguments in paragraph two. As was established previously, these seem to be your opinions and this blog is much more comfortable assessing facts and figures.

less than 5% points to go…to U6 of 25%

Either you get it, or you don’t, Alarmist.Altruism may not get much press, but it does exist.Independent Contractor

U.S. manufacturers scraping bottomU.S. factory output at its lowest point in 60 years, and even massive job cuts haven’t produced profits.By Kevin G. HallMcClatchy NewspapersAt Bommer Industries, a leading U.S. maker of commercial-grade door hinges, the market is the worst in 30 years, president Charles Martin said.In the last year, roughly a third of the job losses in the Carolinas have been in manufacturing.In North Carolina, manufacturing employment fell by 72,800 jobs, or 14 percent, between June 2008 and last month. In the same period, South Carolina lost 29,800 manufacturing jobs, or 12 percent.LANDRUM, S.C. Las Vegas has always served as an important – if odd – barometer for Charles Martin’s manufacturing firm, which makes commercial-grade door hinges.That’s because even in bad times, casinos still went up in Nevada.Not so today.“When gamblers aren’t building, forget about people who make rational decisions,” said Martin, president of Bommer Industries, the last completely American manufacturer of door hinges for hotels, malls, universities and other big commercial buyers. “The gamblers have quit building, and they’re always optimistic.”The U.S. manufacturing sector is trying to claw back from a deep downturn, and manufacturing globally is on the skids. The climb back will be long and painful because the situation facing the sector isn’t just bad. It’s awful.The Federal Reserve’s latest measure of industrial output shows that in June, U.S. manufacturers operated at 64.6 percent of capacity. It means they are producing at more than a third below their potential – the worst rate since recordkeeping began in 1948. Since December 2007, through last month, manufacturers shed 1.9 million jobs, according to the U.S. Labor Department.Located 70 miles west of Charlotte, Bommer Industries was founded in 1876 to make hinges for barn doors. It’s since come to dominate the market for spring-loaded hinges in a way that Xerox became synonymous with copiers. Martin’s product isn’t glamorous, but it’s essential to virtually any large-scale commercial construction.That makes Bommer a good measure of the broader U.S. manufacturing sector. Already struggling against what Martin calls the “Chinese invasion,” the company is positioning itself for the eventual economic rebound, trimming its workforce by 18 percent and hunting for new business.Even if the recession ends in the fall, as many economists predict, significant growth for Bommer and other manufacturers will remain elusive.“At best, the latter part of 2010,” Martin said during an in interview in tiny Landrum, where the company relocated from Brooklyn, N.Y. in 1953. “From my own perspective, we’ve got at least 12 (more) months in the doldrums.”Data researcher Sageworks Inc. collects data from privately held manufacturers – those who don’t offer shares of stock to the public. It recently found bad news in two belwethers: The time to collect payment from buyers and the amount of inventory on hand.Another important measure, profit per employee, is at the lowest level since the 2001-2002 recession. Sales by private manufacturers contracted almost a percentage point in 2001, but have shrunk by more than 3.7 percent in the first half of this year. Even as manufacturers shed jobs, they’re not becoming more profitable.“Basically the economy is softer than we thought,” said Brian Hamilton, CEO of Sageworks. “It’s taken us by surprise… and is worrisome. We’re obviously not as reliant on the manufacturing sector, but that’s the one you think always has more stability.”The Bureau of Economic Analysis estimates manufacturing accounted for 11.5 percent of all U.S. economic activity last year – far below the record 28.3 percent of all U.S. economic activity in 1953.In past recessions, there wasn’t the blanket downturn witnessed today.“All the key demand components have fallen off and that is unprecedented, especially when compared to the last recessions,” said David Heuther, chief economist for the National Association of Manufacturers. “This downturn has really hit manufacturing across the board.”

everyone here knows the control exercised by GS et.al. on money policy.apply the same logic and you will understand running of the FDA and public health policy in America.

Just like a lot of us on this site and other sites, seems more and more mainstream medai are questioning any and all data being put in front of our noses.Well, something must be going on when both the Wall Street Journal and Business Week start seriously questioning the very numbers on new home sales that earlier in the day had the entire American press (including, incidentally, the same Wall Street Journal) and investor community in a exuberant party mood. At the very least it makes one wonder what will happen to the next set of data the happy-talking heads try to cheerlead into a recovery, a recession’s end and the salvation of their favorite country and/or planet.While there is no doubt that the present questions in part originate with similar queries voiced by many parties in the digital community, the sad fact remains that to date a few lines in the Journal, no matter how little or late, carry more weight than a hundred or more stories pointing out the exact same distortion of what are a mere few pretty simple periodically released numbers.What has been happening in the case of the public manipulation of home sales data is no different from the way jobless numbers are dealt with, or unemployment claims, or just about any statistical data you can think of. They are all bent in such a fashion that a picture emerges that is anywhere from less bad to much sunnier than objective analysis would warrant. Realtors do it with housing numbers, the government with unemployment figures, and the press, until now, has been only too glad to play along.I’m sure no-one’s volunteering yet to hold their breath on this one, but it would be a great service to everyone, except for those interested in distorted stats for reasons of money or power, if the Wall Street Journal has set a precedence today that many of its peers will follow, if only because they fear being exposed for reporting “false” information. Meanwhile, whatever the Journal decides, and I think for example there’s another jobless claims report due on Thursday, the pressure on the media to quit feeding their readers and viewers irrelevant “news” in order to make them think things are better than they truly are, is kept increasingly alive by an increasing flow of analysis available online that will one day, unless they change their tune, make the mainstream media themselves irrelevant.Perhaps that’s what’s behind the Journal’s decision today. Not, mind you, that it matters all that much anymore. Plenty people by now understand that while new home sales may have gone up by an X percentage in one particular month, with an X+1 error margin to boot, what really counts in the change over the same period last year. And if that turns out to indicate a 23.1% loss, the same plenty people can figure out what the real picture is. Home sales and jobs, like so many things in life, are seasonal.And I know that I tip one toe over the line by accusing the media of providing “false” information in these cases. Don’t worry, my toe didn’t slip, it’s right where I want it..Information can be classified as “false” when it is intentionally provided outside of, or without, its proper context, if and when that context can or must be presumed to be known by whoever provides said information. Which in turn allows me to perfectly gracefully close with a quote from Mark Hanson which Barry Ritholtz posted earlier at The Big Picture. Right there’s all the context you’ll ever need. Here’s hoping the Wall Street Journal, and all the rest of the media, get the message it sends before it makes them look ridiculous and be irrelevant.And I didn’t even yet get around to talking about the estimated $240 trillion in derivatives exposure for the Big 5 US banks that Fitch suggests.Here’s that context:National new home sales, on a monthly basis, don’t even add up to half of the total foreclosure activity in California alone in a single month.US Home Sales Numbers Fail InspectionMany investors celebrated Monday after June’s “surge” in U.S. new-home sales. Alas, it was largely wishful thinking. True, the Census Bureau reported sales up 11% from May. That’s a big number, at first glance justifying Monday’s 4.5% leap in the Dow Jones U.S. Home Construction Index. But it fails a close inspection.First, home sales quite often jump in June, the height of the spring selling season. When trying to gauge the strength of home sales, then, it makes more sense to compare them to the same month a year ago. That comparison is less kind — sales were down 21.3% from June of 2008. Seasonally unadjusted data show a total of 36,000 new homes were sold last month, the lowest June total since 1982, notes Richard Moody, chief economist at Forward Capital.And the Census Bureau warns against assuming too much precision in these numbers, which are based on a sample survey. Accounting for a 13.2% margin of error — at a 90% confidence level, suggesting the actual error could be higher — new-home sales enjoyed somewhere between a 24.2% gain or a 2.2% decline from May. New-home inventories are falling, an encouraging development. But inventories are still higher than their historical norm, and there remains an avalanche of distressed sales.Little wonder, then, that June’s “surging” sales were driven by heavy discounting. The median new-home price — not seasonally adjusted — fell 12% in June from a year ago to $206,200, the lowest June sales price since 2003. And it was down 5.8% month on month. To paraphrase Pyrrhus, if sales keep soaring like this, then homebuilders will be utterly undone.New Home Sales Fall 21.3%Get ready for another round of bad reporting:The $8,000 Fed tax credit (1st time buyers) and a $10,000 California tax credit (new homes only) likely helped out in NHS this month. Falling prices are also contributing to sales activity of the sector, which represents about 15% of the overall housing market.Here is the official New Home Sales:Sales of new one-family houses in June 2009 were at a seasonally adjusted annual rate of 384,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 11.0 percent (±13.2%)* above the revised May rate of 346,000, but is 21.3 percent (±11.4%) below the June 2008 estimate of 488,000.Thus, we in fact know that Sales fell from last year. They were down 21.3%, a number greater than the margin of error.The monthly data, on the other hand, is not statistically significant. Therefore we DO NOT KNOW what the change was from last month, as the margin of error is greater than the reported data point.The usual suspects got it wrong, as they do every month.If New Home Sales are so strong, then can anyone explain why prices are still plummeting? Median home prices dropped 12% year-over-year, and 5.8% from the prior month.From WSJ:By MARK GONGLOFFMany investors celebrated Monday after June’s “surge” in U.S. new-home sales. Alas, it was largely wishful thinking.True, the Census Bureau reported sales up 11% from May. That is a big number, at first glance justifying Monday’s 4.5% leap in the Dow Jones U.S. Home Construction Total Stock Market Index. But it fails a close inspection.First, home sales quite often jump in June, the height of the spring selling season. When trying to gauge the strength of home sales, then, it makes more sense to compare them with the same month a year ago. That comparison is less kind — sales were down 21.3% from June of 2008.Seasonally unadjusted data show a total of 36,000 new homes were sold last month, the lowest June total since 1982, notes Richard Moody, chief economist at Forward Capital.And the Census Bureau warns against assuming too much precision in these numbers, which are based on a sample survey. Accounting for a 13.2% margin of error — at a 90% confidence level, suggesting the actual error could be higher — new-home sales enjoyed somewhere between a 24.2% gain or a 2.2% decline from May.New-home inventories are falling, an encouraging development. But inventories are still higher than their historical norm, and there remains an avalanche of distressed sales.Little wonder, then, that June’s “surging” sales were driven by heavy discounting. The median new-home price — not seasonally adjusted — fell 12% in June from a year ago, to $206,200, the lowest June sales price since 2003. And it was down 5.8% month on month.To paraphrase Pyrrhus, if sales keep soaring like this, then home builders will be utterly undone

“I’m shocked — shocked! to find that gambling is going on in here.”I think the fact that they changed their name from AIG to AIU to put some distance between them and their old selves tells us volumes about the types of rocket scientists we are dealing with here, and even more about the people who are supposedly watching over them on our behalf.

First, it was the Mom & Pop stores on Main Street as WM spread it’s tentacles out from it’s Arkansas base. The next to fall were the regional discount chains and the entire catalog showroom indudtry.Then they set sights on the really big target – grocery. Already, many grocers are gone, and many more will be.The newest targets are electronics and office supplies. Circuit City bit the dust last year, and Best Buy should be a huge beneficiary, but now they are in the cross hairs of a high powered rifle, so watch them struggle over the coming year.Along the way, the squeeze on the vendor community has become incredible. One you enter bear’s lair, he wants you to dance with him. If you accept the invitation, you soon learn that the bear calls all the tunes, and you can’t stop dancing until tires of you. Then you get tossed out. If that happens, too bad for your company. You have geared up to supply this monster, and suddenly the orders stop. If you avoid bankruptcy, you are lucky.There is so much to write about the world-wide issues concerning WM, but it is bigness that is killing us, sapping the vitality from communities across the land.Independent Contractor

I think we will shortly see a “foreclosure freeze” along the lines of Wage & Price freezes by Nixon … not that that will do any good in the long run, but at least our Pols will feel good about helping the little guy.

Here is the next green shoot coming… GDP of -1% is a 16.5% improvement over past 2 quarters performance… but the reality is this:Estimated GDP numbers.20008 GDP (loss) GDP @ -6% New GDP 09$13,500,000,000,000 $810,000,000,000 $12,690,000,000,000mid 2009 GDP (loss) GDP @ -6% 2nd qtr 2009$12,690,000,000,000 $126,900,000,000 $12,563,100,000,00020008 GDP total GDP LOSS total GDP loss Pct$13,500,000,000,000 $936,900,000,000 7%Bottom line is, if they report -1 or even +1% its not an improvement. We have bascially yanked/robbed/stolen almost 1 Trillion out of what was out annual GDP before this mess.

BTW, we should hope that Helicopter Ben keeps his job for fear that the next Fed Chairman will be even more beholden to TPTB … better the devil you know.

I quote from the article: “His (Obama’s) opposition to reparations is based on the fact they don’t go far enough. In a 2004 questionnaire, he told the NAACP, “I fear that reparations would be an excuse for some to say, ‘We’ve paid our debt,’ and to avoid the much harder work.”And I see a heck of a lot wrong with “affirmative-action healthcare.” Maybe one’s perspective depends on the color of one’s skin.

Walmart is the most predatory company in the US. Try doing Business with them. My company did and they beat us into price submission and we walked. but they I’m sure they got some sucker to agree to thier terms like they always do. Some companies jsut want the revenue, but look a few years down the road and they get in real trouble dealing with walmart. the list of suppliers and distributors dealing with walmart who no longer exist is long. all the crap they sell comes from China, save for food.

The politics of trashing the single-payer healthcare planBy Jerry MazzaOnline Journal Associate EditorJul 29, 2009, 00:20The politics of trashing the single-payer healthcare plan, or any healthcare plan for that matter from Obama, have to do with the Republicans humiliating him so badly that they can recapture their power. So it is in their best interest to invite the Harry and Louise TV commercials back (from the Clintons 1993 run at healthcare), plus a bevy of slime ads, pr types and lobbyists to spread panic plus disinformation and defamation re Obama’s original intention of Single-payer healthcare.The Republican point of view is simply not to come out with the best possible plan for you, Mr. and Mrs. America, and your children, but to seize power even if it means having a third rate plan, which includes a Public Option that would like to have only the most costly severe cases shuffled to it, a Medicare that will be privatized for the most severe aging cases, neither of which you might want to partake in. This is why Obama has been cryptically holding back on announcing any features of this plan: to avoid the Republican shredding machine. But, sooner or later, he has to speak, speak loudly and clearly and on the money.Typically, the Republicans are in bed with Big Pharma not to improve Plan D with the $8 billion a year for 10 years (for name brands only), or to be able to say sayonara to the insurance companies that can only give you more care for way more money. This way they all make a bundle off your blood. They have the nerve to talk about rationed healthcare, and waiting for healthcare, when we already have rationed healthcare (look at your bill and your coverage) and we have healthcare you can wait for from mammograms in Florida to an appointment for a physical in anywhere USA.In short, our healthcare is the pits but we are paying two and a half times more than any advanced country does for their healthcare, and the Republicans want it to stay that way or worse. We run far behind Canada in actual care, and Europe, Japan, and other parts of Asia, while we pay top dollar, and are told we need to put massive amounts more money into it to bring it up to snuff.Baloney I say. The problem is not enough money, but not enough healthcare coming from the very-much-for-profit insurance companies that are already overpaid.Their numero uno business is making money, not making people fit. Don’t ever forget that. It could cost you your life. That’s a fact, not a scare tactic like associating a single-care payer system with socialism. Medicare is single-payer healthcare born in the USA. It works fine for seniors and would work better with the for-profit insurers the hell out of it for good. And that goes for Medicaid for the poor, also singer-payer veterans’ insurance.So the whole simple bottom line of scaring the bejesus out of America, young, middle-aged and old, rich, middle-class or poor, is for the for-profit insurance companies to keep their golden for-profit insurance goose laying more and more golden eggs. That’s it. I could call this un-American insurance, terrorist insurance, because it attempts to terrorize Americans into voting for it. I could call this the insurance from hell (and be right on the money) for you good Christians to fear it. After all, who wants insurance from the devil, to make a pact with him, greedy lost angel that he is, when it comes to life and death.So that’s what it’s all about, misinforming you, outright lying to you, ready to kill to keep their golden goose laying golden eggs. And it’s about the Republicans humiliating Obama for ever mentioning single-payer care at the beginning of his speech, or at the beginning of the primary with Hillary, or during the campaign against John McCain. All three of these people knew the answer. They were all three potential, viable candidates for the highest office in the land. But none of them would dive in and commit to single-payer universal healthcare because some lout would shout, “Socialism, the Bolsheviks are going to eat us for lunch!” and their campaigns, maybe their careers would be finished for good.To me, that’s one of the most un-American things you could do, to stifle the opinions of presidential candidates, to try to crush good ideas because somebody’s gonna lose a few bucks over it. Medicare, Medicaid, Veterans Benefits are each as American as apple pie and single-payer plans. Anybody who says no must be a fascist who wants to see America weakened health-wise and financially. Unhealthy Americans make for a threat to our national security. Throwing money into a flabby, weak for-profit system is the best way to mess up American health. It’s tantamount to biological or chemical warfare, underhanded, nasty, like whomever, whatever’s poisoning the worker bees for the last 10 years, the bees that pollinate our very food supply.You want fear, I’ll give you fear “in a handful of dust.” These greedy boardroom bastards look down from their skyscraper windows at so many ants scrambling down there, not human beings exerting great strength, daily strength in spite of all odds, to support their families, keep them healthy, defend their nation, protect the traditions of liberty and equality. This is who the Republicans are in bed with and the Blue Dog Democrats who aren’t worth the name Democrat. There’s nothing democratic about them. They want to sit in the laps of the Wall Street boys, too, and kiss their lips for money until they bleed.Those Wall Streeters, you may remember, are the guys like Paulson who rushed in with a $700 billion ransom note to pay up from the Treasury post haste or the economy would tumble down on our heads. Well, he got his blood money, and the subprime crap is still stuck in the toilets of the Fed, while the investment bankers got cash for it and are writing huge bonus checks for their buddies, ushering back the lush life, warning us to feed them more and more cash. Just the way the insurance companies are demanding more and more for premiums with less and less coverage, bigger co-pays than ever. If you believe this scum you’re doomed.Enter William KristolWilliam Kristol, who’s one of their big “thinkers,” and I use term loosely, “urged his party,” noted July 24, 2009, in Bill Moyers Journal, “to block any health care plan for fear Democrats would be seen as, quote’ . . . the generous protector of middle-class interests.’ Now he’s telling the GOP. to “Go for the kill . . . throw the kitchen sink [at it] . . . drive a stake through its heart . . . we need to start over.”So in lockstep are the Republicans that when strategist Alex Castellanos issued a memo on the battle plan, party chairman Michael Steele echoed it word for word in a speech at Washington’s National Press Club.“Castellanos: ‘Slow down, Mr. President. We can’t afford to get health care wrong.’“MICHAEL STEELE: ‘Slow down, Mr. President. We can’t afford to get health care wrong.’“BILL MOYERS: Castellanos: ‘The old, top-down Washington-centered system the Democrats propose will empower Washington to restrict the cures and treatments your doctor can prescribe for you.’“MICHAEL STEELE: ‘The old top-down Washington-centered system the Democrats propose is designed to grow Washington’s power to restrict the cures and treatments ‘your doctor can prescribe for you.’“BILL MOYERS: Castellanos: ‘President Obama is experimenting with America, too much, too soon, and too fast.’“MICHAEL STEELE: ‘Your experiment promotes — proposes too much, too soon, too fast.’“BILL MOYERS: As the Republicans fired away, big business stepped up the attack, too, their lobbying and advertising guns blazing. In certain key states where members of Congress remain on the fence, the airwaves are vibrating with television commercials aimed at shifting hearts and minds away from any change that might threaten profits.“[ADVERTISEMENT SOT]: What will happen to your family’s health care if Washington runs it?’“[ADVERTISEMENT SOT]: ‘Now Washington wants to bring Canadian-style health care to the US.” BTW, read this entire link for your own good.’The Republicans look at this imminent defeat of single-payer healthcare as Obama’s, Waterloo, the 1815 battle which ended Napoleon Bonaparte’s rule as Emperor of France, “a humiliating defeat and a turning point in European history. Right-wingers like Glenn Beck see Obama as Napoleon, an emperor who must be stopped.”There are the true sickosSomebody throw a net over them. They’re frothing at the mouth. They’re stark raving nuts. And what does Congress do? They sit on the fence, waiting for the next campaign contribution. As Moyers says, “The big drug companies are already so pleased with what they’ve been promised that they’ve brought back Harry and Louise [as mentioned earlier] –the make believe TV Couple who helped take down the Clinton healthcare plan.”But this isn’t new. This crap’s been going on since 1948 when Harry Truman (not exactly a socialist by any stretch) tried to introduce a universal health care single-payer plan to the US and got hit in the face with the same pies these guys are throwing today, except their grenades now. This is 61 years ago, folks, sixty-one! And the Repuglicans are up to their same old tricks. Are you going to buy this and sell your health down the river? Believe me, Harry and Louise are going to have a big fat laugh on you, because they’re in on the scam, and the agency that created them, and the high-rollers that paid for it.In addition, we’ve got another golden egg, the Mandated Insurance Plan, that’s supposed to cover the uninsured, that is, with the help of government subsidies, that’s for 85 percent of the 47 million that can’t pay for anything now. So this is another pre-packaged cash gift for the for-profit insurance companies. On and on, it goes. And what we have to do, with one voice, is tell them we don’t want a damn dime to go to the for profit-health insurers any damn which way. Period, story over.Let them go back to hurricanes, terrorist hijacking airliners, and other disasters to make their untold billions. But get ’em the hell out of healthcare. Or we will be their victims. Let’s wipe that big greedy smile off Bill Kristol’s face and put one on every single-payer insured Americans.’I mean, whether this takes a month or a week to do, let’s do it right. And right means single-payer. We can expand it state by state, year by year, or use Medicare, starting by lowering the age of admission to people in their 40s, as one healthcare expert suggests. But let’s just get on track with the right train to take all the people to a better place and not crash at the next turn in the economy. For in the long and maybe even in the short run, we will be saving money, money not wasted on the fat cats’ bottom lines, on investor “expectations,” Wall Street “predictions.”So Obama, come out come out wherever you are. Show your face; make us all proud. Speak up, and as the same healthcare expert said, go down on your sword for this one if you have to. If this will be your measure, let it be for the truth, for the health of the people you chose to lead and who chose you to do it. Half-solutions, bebop botched solutions do nothing for anyone except the greedos. And nobody gives you awards for half-finished work, or for finishing fast. Sock the real thing to ’em, brother. Beat the politicization of single-payer healthcare. Just do it! Jump like Jordan for the stars. Guaranteed, you’ll land with the rest of us in a good place. I do believe that. Amen.

Wal-Mart, God forgive them, is supporting Obama healthcare because its competitors—such as Target–pay less per employee for healthcare benefits. Under Obamacare, all will pay the same.At the same time, Target, the darling of the media and liberals for its stand against the Salvation Army and for abortion, has targeted Wal-Mart to drive out its competition. According to a CATO spokesman and video pictures, Target has organized its own employees to engage in Wal-Mart protests. And Target has conspired with its brothers in the bank-owned media to demonize Wal-Mart for what Target itself does.Before everyone jumps on the Target bandwagon, shouldn’t they at least ask themselves why they are so happy to be in on the Wal-Mart lynching? Why do people blindly pile on the Target wagon just to be driven further into monopoly and economic tyranny? Answer this question: Do you think Target will lower or raise its prices if Wal-Mart is destroyed?Then ask yourself one more question: Who “owns” Target? I think you’ll find it’s the same people who will soon own everything

MY EXPERIENCES WITH NATIONAL HEALTHCARE, by Linda Schrock Taylor (July 28)Obama’s castle-in-the-air, pie-in-the-sky, wish-upon-a-star health care would never, could never, and should never be appropriate for Americans. As Dr. Seuss might put it, “not in a hush, not in a rush; not even if read; not even if…Red!” ObamaCare is doomed to fail and Congressional members who support it will be the next to go. Leave. Lose elections. Be relegated to life again in the real world.We frequently hear that Britons, Canadians, French, Swedes and others are often ill-served by their health systems. I understand their concerns and their experiences because I, myself, lived under a national health program for a year and found the experience utterly awful. Chances are that the care has grown far worse since I left it 32 years ago.I was accepted into a masters program at the University of Manchester, England for the school year 1976-77. I sold my house, packed my bags, and “went abroad.” At that time I was a Teacher of the Deaf; Manchester was the first university to ever train teachers of the deaf; and I wanted to broaden my skill and knowledge base. Included in the out-of-country tuition costs was health coverage through the National Health system in England. I was relieved to learn that I had any kind of coverage at all, then thought no more about it. A few weeks later my nonchalance would change.During a trip to Edinburgh, Scotland, to attend the International Festival, I walked and rewalked the Royal Mile, putting far too much stress on my vehicle-spoiled joints. Within a couple days of my return to Manchester, I was almost crippled and so went “to hospital.” Once there, I was put into a waiting room that reminded me of a picture I had seen of suffering in mental hospitals, circa 1880 or so. The “room” was about the size of a small town gymnasium, high ceiling as well, but cold and unappealing. It was full–standing room only–of people with all kinds of emergency conditions waiting endlessly to be seen by a nurse, let alone a doctor.After hours of painful standing, I decided to ask about the holdup and walked on through the treatment doors. A nurse stopped my advance so I asked for either 1) a timely visit by a doctor or 2) the phone number for a doctor with a private practice. I received neither. The nurse shepherded me to a quiet corner where she advised me to be more patient. She explained the costs I would face if I went elsewhere. She at least found me a chair and I…waited.The local doctors’ offices provided more shocking experiences. The service was faster but the treatments were nonexistent—unless prescriptions were all that one wanted. In fact, I do not recall ever leaving the office without a prescription, even when the decisions were highly suspect. Pills were passed out like candy. Public Pacifiers.Appointments with a doctor were a hoot–once I learned the procedures. The first visit, however, was shocking and confusing. I had phoned to schedule an appointment then upon reporting in, I was given a 12-inch colored piece of the material used for name signs in offices. Mine happened to be red with a number cut out instead of a name. Say…34. I went to the waiting room where I joined a large group of people, all of whom were staring at a large wooden board with about 6 colored lights on it. I observed carefully so as to see what would be expected when my turn arrived. A buzzer went off, the blue light began flashing, and someone stood to ask those around him if they had blue with a number lower than his own. No one responded, so he left the room. On it went with yellow, green, orange lights flashing but then the red light flashed. Thus far, the herd had trained me well, so I stood and asked: “Does anyone have Red before number 34?” No one did, so I left the room…but that was as far as I had been trained. Someone finally noticed my confusion and told me that I must go down a long hall and report to the….RED DOOR. But of course! Dr. Red Door. Names were not important. Just procedures.The appointments were five minutes in length and the patient sat in a chair in front of the doctor’s desk. The doctor was never the same person on a subsequent visit, except for one time when I specifically requested that I see the same doctor when I returned. I was given the appointment, but not with good humor. Later, during the winter, I could barely breathe because of bronchitis. I boldly asked the doctor if he would please listen to my lungs to check if I might have pneumonia. My request threw him quite off-guard and he abruptly said, “You ‘ave to go to ‘ospital for something like that!” I could not believe my ears and I expressed my displeasure with a “health care” system that had no graduations of care between “Speak with doctor in a bank-like setting” and “Be admitted to hospital”!With reluctance and displeasure, he arose, dug around to find a stethoscope, and listened to my lungs. That was the only time that a national health doctor ever actually physically touched me. How very different than my wonderful internist who I had just left in Colorado.One of my classmates tried to convince me that the financial costs outweighed the long waits and minimal care. His was an impossible “sell” for I stubbornly maintained that nothing in life is free, especially doctors and hospitals. Finally he admitted that he was taxed a minimal fee that was taken out of his paycheck each month. I happened to have my last pay stub from Colorado so I suggested that he bring one of his the next day and we compare our costs. He did, so we did. We were both single; both homeowners; both the same age; neither had dependents. My cost for Blue Cross private coverage was $18 and some odd cents per month. His tax for national health care was…$18 and odd some cents per month. The argument ended once he saw real data instead of government propaganda..One thing that I will give to national health care is that it provides much fodder for jokers and comedians. A show similar to our Saturday Night Live held a Bed Auction for a mythical empty bed in one of Britain’s hospitals. The skit was hilarious! “I have a bid for one Measles! One Measles! Does anyone want to bid higher than that? Ah! I have a bid of One Potential Suicide! One Potential Suicide is my high bid! Going, going….wait! He jumped. Cancel the bid for the suicide. We are back to one Measles….” It was just too, too funny.When a friend of mine gained admission to a local hospital, we were so happy for him. He did receive treatment but then his wife didn’t arrive fast enough to get him on the day he was released. Ernesto was made to move to the visitor’s chair while a new patient was put into his bed–while he sat right there! With a bit of wine, we were finally able to make jokes about that scene, as well.But most often we felt fear for our well-being under the “care” of national health. We understood that we only had minimal control over our own bodies. During a week of study in The Netherlands, one member of our group had a bad shock; possibly even a nervous breakdown. The rest of us decided that the best way to help the person was to…hide the problem! We feared that Holland might run a similar Snake Pit for health care and that we might lose our friend into the bowels of some such system. We took turns sitting up all night with our friend; never letting the person away from our sides; laughed heartedly at the goofy “jokes” the person was telling and acting out. We worked hard to hide the affliction on the flight back to England and we had some scary moments at customs. We were worried that our friend would be nabbed by national health and be lost in some mental ward. We made it safely back to Manchester then the two nuns in our group handled the care and counseling through the Catholic Church. Whew! We made it past the health care system and into safety!The fear was awful, even when we were young and healthy. Now we are in our 60s and 70s. When Obama says that 20 percent of the population is responsible for a huge percent of medical costs in America…it is time for our age group to realize that HE MEANS US: the older; the elder; the retired. I cringe and revisit those old fears that my friend would be snatched by the health authorities; be lost in a black hole of care. In Lois Lowry’s book, The Giver, any person unable to contribute to the society is “released”–i.e. killed, snuffed out, put to sleep…EUTHANIZED. I do not consider it farfetched to wonder if Obama, with his reassurances to save money, may not be thinking of the cost cutting solutions offered in The Giver, or in This Perfect Day by Ira Levin, or in….socialist and communist organization.When such awfulness comes to pass, it will not be only the elderly that are “released,” but also the feeble, the retarded, the crippled, the handicapped, THE USELESS. The thought certainly gives one pause. Keep in mind that it is we who are costing the government more than we are contributing. Then it will be our children’s generations. Then it will be our grandchildren’s generation. And then it will be….Think about it. Think about it long and hard. Are you willing to be ousted; released; murdered—for the supposed benefit of the rest of society? I, for one, am not.Linda Schrock Taylor is a retired special education teacher; a reading specialist; former homeschooling parent; and outspoken constitutionalist. She is slowly writing her first book on remediating reading skills.http://www.thenewamerican.com/index.php/opinion/955-linda-schrock-taylor/1533-my-experiences-with-national-healthcare

No wonder, why is our professor praising the current policy of Summers.

Bernanke is the great American economic destroyer and will become the great Fed destroyer.

g,you’re right. the insurance industry shouldrun for profit “healthcare” and then when thatfails the federal reserve can get the treasuryto run it.

I can not believe you are endorsing Bernanke. This is the same guy who floated the “savings glut – blame Asia for your own wrongdoings” theory, has been wanting to print dollars since 2002, blew bubble after bubble (we are not done yet – commodity bubble from last year is on its way AGAIN, and so is another equity bubble). He will continue to look at his precious core PCE deflator for guidance while the rest of us pay 5 dollars for gas and 50% of after tax income for housing. This guy’s economics sucks.

Irresistibly flighty and charming in its wisdom.Thanks for being here.

Hey there LB…I’ve already stated my opinion on Bernake some time ago, but I don’t mind throwing out the simple reminder from my “trick or treat article”http://www.rgemonitor.com/globalmacro-monitor/254214/trick_or_treatBen BernakeIt pains me to say this since I actually believe Mr Bernake is a good man, but he is the # 1 person that needs to be held accountable for the media’s inability to warn the public in advance of the current crisis. I don’t believe Mr Bernake had malicious intentions, but none the less, he has failed us. He inherited a bad situation. (The government, Greenspan, etc created this mess… but it unfolded under his watch!) As an academic whose expertise was on the great depression I am left with 3 theories on why I feel you should be held accountable for your statements such as “well contained” and should be fired immediately:#1 You believed what you said! (If that’s the case, let me reiterate: This crisis is arguably “THE WORST FINANCIAL CRISIS IN THE HISTORY OF MODERN CIVILIZATION!!!” …and you didn’t see it coming or you chose to ignore it.)#2 You understood the size and scope of the problem, and chose to mislead the public because of the fear that: ‘Exposing the truth would have a large negative affect on the market.’#3 You understood the size and scope of the problem, and chose to mislead the public because you though it could be manipulated/fixed.If it’s #1, you are incompetent, and should tender your resignation or be fired.If it’s #2, you should be fired and prosecuted.If it’s #3, you should be fired and labeled incompetent.Either way, you lacked competency or faith in the American people and their resilience/ability to cope with crisis and adjust.”When these people like Bernake represent our country, our financial economy or the US public, there is a certain level of competency and trust that the MUST meet. In no way has Ben Bernake proven competent or trustworthy. His resolutions to date have been to reinflate a popped balloon. His theory of blowing air/liquidity into this bubble society concept is either a failure to realize that a systemic change is needed or that his hands are tied. (I could almost accept that concept as a mean to “buy time” for us to transition to a change from bubble society, but I see nothing to prove that to be the case.)If it’s a failure to see that that a systemic change is needed…That shows lack of competency!If it’s because his hands are tied, then that shows lack of trust. (because if his actions are in any way based on influence from those who tie his hands, then he is not acting in the best faith of the American people, but rather in the best interest of crony capitalism!If we’re interested in just re-inflating this bubble, my vote is we fire Bernake and just re-hire Greenspan! He’s proven he knows how to create the biggest bubbles of all time. If he’s not available, I’d take Greenspan’s dead dog. Anyone or thing will just about due, so long as it’s not Paulson or someone willing to get down on their knees for Paulson, like Bendover Bernake did!Miss America

Hey there LB…I’ve already stated my opinion on Bernake some time ago, but I don’t mind throwing out the simple reminder from my “trick or treat article”http://www.rgemonitor.com/globalmacro-monitor/254214/trick_or_treatBen BernakeIt pains me to say this since I actually believe Mr Bernake is a good man, but he is the # 1 person that needs to be held accountable for the media’s inability to warn the public in advance of the current crisis. I don’t believe Mr Bernake had malicious intentions, but none the less, he has failed us. He inherited a bad situation. (The government, Greenspan, etc created this mess… but it unfolded under his watch!) As an academic whose expertise was on the great depression I am left with 3 theories on why I feel you should be held accountable for your statements such as “well contained” and should be fired immediately:#1 You believed what you said! (If that’s the case, let me reiterate: This crisis is arguably “THE WORST FINANCIAL CRISIS IN THE HISTORY OF MODERN CIVILIZATION!!!” …and you didn’t see it coming or you chose to ignore it.)#2 You understood the size and scope of the problem, and chose to mislead the public because of the fear that: ‘Exposing the truth would have a large negative affect on the market.’#3 You understood the size and scope of the problem, and chose to mislead the public because you though it could be manipulated/fixed.If it’s #1, you are incompetent, and should tender your resignation or be fired.If it’s #2, you should be fired and prosecuted.If it’s #3, you should be fired and labeled incompetent.Either way, you lacked competency or faith in the American people and their resilience/ability to cope with crisis and adjust.”When these people like Bernake represent our country, our financial economy or the US public, there is a certain level of competency and trust that the MUST meet. In no way has Ben Bernake proven competent or trustworthy. His resolutions to date have been to reinflate a popped balloon. His theory of blowing air/liquidity into this bubble society concept is either a failure to realize that a systemic change is needed or that his hands are tied. (I could almost accept that concept as a mean to “buy time” for us to transition to a change from bubble society, but I see nothing to prove that to be the case.)If it’s a failure to see that that a systemic change is needed…That shows lack of competency!If it’s because his hands are tied, then that shows lack of trust. (because if his actions are in any way based on influence from those who tie his hands, then he is not acting in the best faith of the American people, but rather in the best interest of crony capitalism!If we’re interested in just re-inflating this bubble, my vote is we fire Bernake and just re-hire Greenspan! He’s proven he knows how to create the biggest bubbles of all time. If he’s not available, I’d take Greenspan’s dead dog. Anyone or thing will just about due, so long as it’s not Paulson or someone willing to get down on their knees for Paulson, like Bendover Bernake did!Miss America

word

@Giraf Yup- any data being commented on is percieved as good or better when compared to any period of the past year. problem is the whole past year was nothing but negative data. now had the jump been to 136k in one month that would be a true green shoot and worthy of strong positive commenting by anyone.How do you get his article when it comes out- he always has good insight…

INSIDER SELLING SOARS, BUYING STILL AT RECORD LOWS29 July 2009Despite a near 50% rally in the stock market and “better than expected” earnings across the board, we’re continuing to see unprecedented levels of insider selling and record low levels of insider buying….see the following link for more:http://pragcap.com/insider-selling-soars-buying-still-at-record-lows

Just read this posted by Anonymous on Zero Hedge today. Fitting to everything it seems:HFTs are just another reason why no average joe retail should participate in the stock market. It’s a total sham with the market heavyweights trying to take your money away. Wall street needs retails in the market to take your money.. no retails means they canibalize each other

Never fear, Goldman Sachs and the NewYork Fed will make the decision and let Obama know.

Obama said today the recssion over in another one of his press confrences… he’s right, the real depression is just starting…. so for all you 30 million plus underemployed (15 million plus totally unemployed) Obama has given up on you. you are only 10-20% of the workign population… he’s counting on you not voting in 2010 and 2012… don’t dissapoint him…

Like everything else, Obama has it backwards again-AMABO: A Man Always Blabbering O (nothing).

Since Bob is not giving you what you seek, how about this Giraf:If Bob were FED Chairman:He would not have made the 180-turn in FED policy that Bernanke did in July/August 2007.He would have totally realized at that time what was ahead, and would not minimize its duration or impact to anyone in private or to the public.He would have allowed the market to function with out interference and allowed the bankruptcy laws of this country to govern failed institutions. No bailout for Bear Stearns or any other entity. All tools and policies would have been employed to backstop the real economy and real people as the shadow economy/financial system collapsed.He would cement his re-appointment to the Chair by exerting competent and strong leadership as the Phoenix of a new stronger system emerged from the ashes of the shadow system.There you have it in a nutshell, what would you have done, Giraf?

New Thread

“Chances are that the care has grown far worse since I left it 32 years ago.”How very scientific in her research.

Inflation is the cruellest tax of all.

Giraf, you’ll remember that the calls to Washington were 99:1 AGAINST Congress-Bush-McCain-Obama-Paulson-Bernanke instigating the TARP. The American people have known all along this is a total boondoggle. It’s the nitwits in Washington who don’t have a clue.

I took my troubles down to Madame RueYou know that gypsy with the gold-capped toothShe’s got a pad down on 34th and VineSellin’ little bottles of – Love Potion #9– Love Potion #9, Circa 1959I’ve never known any gold-capped tooth money managers, but without squinting very hard there is undoubtedly a strong resemblance between all of us “managers” and the infamous Madame Rue selling Potion #9. Instead of love, though, we sell “hope,” but very few are able to seal the deal with performance anywhere close to compensating for the generous fees we command. Hope has a legitimate price, of course, even if its promises are never fulfilled. It is the reason we put a five spot into the collection plate on Sunday mornings and why we risk a 25-dollar chip at the blackjack table. In the former case we usually rationalize it as “insurance,” and with the latter as “entertainment.” Whatever – I’ve already alienated all of you with strong faith in the hereafter or the ones who actually believe they’re going to win on their next trip to Las Vegas. But my point is that those who sell investment “potions” must wrap their product with an extra large ribbon because history is not on their side. Common sense would dictate that the industry as a whole cannot outperform the market because they are the market, and long-term statistics revealing negative alpha for the class of active managers confirms it. Yet, what a price investors are willing to pay! A recent Barron’s article pointed out that stock funds extract an average 99 basis points or virtually 1% a year in fees from an investor’s portfolio. Bond managers are more benevolent (or less pretentious) at 75 basis points, and many money market funds manage to subsist at a miserly 38. Still, those 38 basis points are as deceptive as the pea that disappears beneath the shell of a street-side con game. Since money market funds barely earn 38 basis points these days, much of the return winds up in the hands of investment managers. A mighty expensive potion indeed. While some index and ETF proponents avoid this extreme absurdity with lower fees, roughly 90% of the $1.5 trillion in 401(k) and other defined contribution assets in mutual funds are in actively managed offerings with expenses close to 1%. Paying for those potions during an era of asset appreciation with double-digit returns may have been tolerable, but if investment returns gravitate close to 6% as envisaged in PIMCO’s “new normal,” then 15% of your income will be extracted based on the beguiling promise of Madame Rue. The solution, of course, is to compare long-term performance with fees and approach 34th & Vine with informed confidence, as opposed to Pollyannaish hope that you’ll get your money’s worth. Down the hatch and good luck!Investors looking for love potions or successful investment strategies in this new normal economy dominated by deleveraging and reregulation must focus on some very macro-oriented ingredients as opposed to typical news-dominated minutiae. The latest quarterly earnings report from Goldman Sachs may be an indicator that the financial sector is getting some color in its cheeks, but it doesn’t really let you know what needs to happen in order for the real economy to stabilize as well. My last month’s Investment Outlook commentary on the significance of wage and employment trends remains the key focus. Common sense tells us that consumer spending growth comes from highly employed, well-compensated labor, and we are far-far from even approaching that elemental condition. The fact is that near double-digit unemployment has resulted from numerous business models that are now broken: autos, home construction, commercial real estate development, finance, and retail sales. Construction of a new Humpty Dumpty capitalistic “oeuf” will be a herculean task.Potion hunters, however, should also understand the following macro concept that will dominate the indefinite future, one which I will humbly try to explain in the next few pages in 500 words or less: Reflating nominal GDP by inflating asset prices is the fundamental, yet infrequently acknowledged, goal of policymakers. If they can do that, then employment and economic stability may ultimately follow.To explain:A country’s GDP or Gross Domestic Product is really just an annual total of the goods and services that have been produced by its existing stock of investment (capital in the form of plant, equipment, software and certain intangibles) and labor (people working). Over the last 15 years or so in the U.S. that annual production (GDP) has increased in nominal (real growth and inflation) terms of 5-7% as shown in Chart 1. Not every year, certainly not in boom or recessionary years, but pretty steadily over longer timeframes, and consistently enough to signal to capitalists that 5% was the number they could count on to justify employment hiring, investment spending plans, and which would serve as well as a close proxy for the return on capital that they should expect. Nominal GDP is in fact a decent proxy for a national economy’s return on capital. If each and every year we grew by 5%, then that would be sort of like a stock whose earnings grew by the same amount. Companies and investors then would be able to estimate the present value of those cash flows, and price investment and related assets accordingly – a capital asset pricing model or CAPM based on nominal GDP expectations.While objectively hard to prove, logic dictates that that is exactly what has happened over the past several decades. Businesses expanded with a developing certainty that demand, expenses, and return on the economy’s capital would mimic this 5% consistency. Debt was issued with yields that reflected the ability to service those payments through 5% growth in both real and inflationary terms, and stocks were issued and priced as well with the same foundation. Pension obligations and similar liabilities were legitimized on comparable logic, as were government spending programs forecasting tax revenues and benefits. Both real economy and financial markets then, were geared to and, in fact, mesmerized by this 5%, GDP/CAPM, “model.”Now, however, things have changed, and it is apparent that there is massive overcapacity in the U.S. and indeed the global economy. As reflexive delevering has unveiled the ugly stepsister of the “great 5% moderation,” nominal GDP has not only sunk below 5%, but turned at least temporarily negative. If allowed to continue – and this is my critical point – a portion of the U.S. production capacity and labor market will have to be permanently laid off. Nominal GDP has to grow close to 5% in order for the economy’s long-term balance to be maintained. Otherwise, employment levels become unsustainable, retail shopping centers unserviceable, automobile production facilities unprofitable, and the economy itself heads towards a new normal where unemployment averages 8 instead of 5%, housing starts total 1.5 instead of 2 million, and domestic auto sales 12, instead of 16 million annual units. Critically in the readjustment process, debts are haircutted via corporate defaults and home foreclosures, and equity P/Es are cut based upon increased risk and substantially lower growth expectations. A virtuous circle of expansion turns into a vicious cycle of recession or low-growth stagnation. Label it what you will, but a modern capitalistic economy based on levered financing and asset appreciation cannot thrive if its “return on capital” or nominal GDP suffers such a significant shock.Policymakers/government to the rescue –we hope. 0% interest rates, quantitative easing, $1.5 trillion deficits, trillions more in FDIC or explicit government guarantees, a trillion plus in MBS and Treasury bond purchases, TALF, TARP – I could, but I need not go on. Can they do it? In other words, can they successfully reflate to 5% nominal GDP and recreate an “old” normal economy? Not likely. The substitution of government-backed vs. private-leverage is one strong argument against the possibility. Despite the attractive financing rates incorporated with the TALF, TLGP and other government-subsidized financing programs, they come with quality constraints (larger collateral haircuts and mortgage down payments, to name a few) that inhibit the “new normal” lenders from approaching the standards of the 5% nominal-based shadow banking system. Just last week, President Obama proposed new “transaction fees” for “far out transactions” undertaken by financial companies. “If you guys want to do them,” he said, “put something into the kitty.” In turn, there are internal Washington Beltway/external Main Street USA, politically imposed limits which will thwart policy expansion beyond the current stasis. Most of the politicos and even ordinary citizens are screaming for limits on monetary/fiscal expansion: “No TARP II! 1.5 trillion dollar deficits are enough! The Fed must have an exit plan!” etc. If there are such future political constraints or caps (both domestically and from abroad), then one should recognize that most of the ammunition has been spent stabilizing the financial system, and very little directed towards the real economy in terms of job loss prevention. Where is the political will or wallet now to grant corporate tax breaks for private sector job creation or to even hire new government workers, aside from a minor positive push with military enlistment? In brief, the “new normal” nominal GDP, the future return on our stock of labor and capital investment, will likely be centered closer to 3%, for at least a few years once a recovery is in place beginning in this year’s second half. Diminished capitalistic risk taking and constrained policymaker releveraging will lead to that likely conclusion.Investment conclusions? A 3% nominal GDP “new normal” means lower profit growth, permanently higher unemployment, capped consumer spending growth rates and an increasing involvement of the government sector, which substantially changes the character of the American capitalistic model. High risk bonds, commercial real estate, and even lower quality municipal bonds may suffer more than cyclical defaults if not government supported. Stock P/Es will rest at lower historical norms, and higher stock prices will ultimately depend on tangible earnings growth in the form of increased dividends, not green shoots hope. An investor should remember that a journey to 3% nominal GDP means default/haircuts for assets on the upper end of the risk spectrum, as well as extremely low yielding returns for government and government-guaranteed assets at the bottom end. There is no investment potion for this new environment other than steady income-producing bond and equity investments in companies with strong balance sheets and high dividend yields, as well as selectively chosen emerging market commitments where nominal GDP growth prospects are tilted upward as opposed to gravitating to new lower norms. Madame Rue has met her match.William H. GrossManaging Director

So, let’s see what we’ve got here. First, there’s a huge financial mess. Second, there’s an Fed that’s supposed to have some responsibility for something, but nobody can agree for exactly what, SWK is convinced Bernanke is doing the best he can, IC and Giraf and others don’t agree.No one knows if it would have been better to let the banks just go tits up (total bank deposits “lost” approx. $11 trillion) versus the taxpayers taking on as yet undetermined obligations to save the system. My guess as to the total ultimate cost? $17 trillion.Obviously Bernanke believes the latter figure will be much less than $11 T, but many facts make us uncomfortable about his behavior. He has a large vested interest. His track record is short, and from what we do know……….he has acted stupidly.Why don’t we all just have a beer and examine the Fed’s balance sheet?

yup

London Banker, may I ask why you haven’t blogged at your website or at RGEM this year? One of the commenters at my blog asked after you, and I told him I would inquire.

why is this so?

I must get across my admiration for your kind-heartedness in support of visitors who really want help on the matter. Your very own commitment to getting the message all over had been especially productive and have regularly permitted ladies just like me to achieve their pursuits. Your amazing invaluable help entails a lot a person like me and still more to my fellow workers. Many thanks; from each one of us.

I not to mention my guys happened to be analyzing the excellent strategies located on the blog and at once I got a horrible feeling I had not thanked the blog owner for those strategies. The men were definitely consequently warmed to study all of them and have in effect sincerely been using them. Appreciate your truly being so considerate and for utilizing these kinds of really good things most people are really desirous to understand about. My very own honest apologies for not expressing gratitude to you sooner.

Well, another blogger already posted a topic like this.“;..

Have you tried twitterfeed on your blog, i think it would be cool.`;;*”

Great blog post and nice discussion among the comments.~;..’

RSS Feeds on your blog sometimes does not work.`~.`~

The way you write, you are really a professional blogger.”,:’-

I think your blog is getting more and more visitors.*:”~*

What would be your next topic next week on your blog.;.~”~

Only a few blogger would discuss this topic the way you do.,-”:~

Only a few blogger would discuss this topic the way you do.~-’*.

Well, another blogger already posted a topic like this.,”..-

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

Sometimes your blog is loading slowly, better find a better host.~`-”~

I’m new to your blog and i really appreciate the nice posts and great layout.”:.;~

The way you write, you are really a professional blogger.;.*”,

I think your blog is getting more and more visitors.~”",”

I will invite all my friends to your blog, you really got a great blog.:,~-”

I bookmared your site a couple of days ago coz your blog impresses me.,;’~,

Oh i really envy the way you post topics, how i wish i could write like that.”.”*:

A blog like yours should be earning much money from adsense.,~*.;

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.,”*,,

I love blogging and i can say that you also love blogging.’`.”.

I always visit new blog everyday and i found your blog.`’;,.

I’m new to your blog and i really appreciate the nice posts and great layout..`:”~

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

The mind-blowing up to date posts keep me coming here very frequently. Thank you very much.

Personally Im impressed by the quality of this. Generally when I come across these sort of things I like to post them on Digg. I dont think this would be the best to submit though. I will be sure to submit something else though.

A blog like yours should be earning much money from adsense.””:-

You can increase your blog visitors by having a fan page on facebook.,-`.;

It is truly a nice and useful piece of information. I am satisfied that you simply shared this useful info with us. Please stay us informed like this. Thank you for sharing.

Your blog is one of a kind, i love the way you organize the topics.;-”;:

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..~:..

Only a few blogger would discuss this topic the way you do.`’”,’

You can increase your blog visitors by having a fan page on facebook.;“’*