Spotsylvania Court House, Virginia. Dead Confederate soldier near Mrs. Alsop's house. Grant's Wilderness Campaign, May-June 1864
Ilargi: I’ll try to take a slightly different approach today, while remembering the dead, and let someone else do the talking for a change.
Yesterday, I picked up the article below, written by an investment adviser named J. S. Kim, who puts his finger right where it hurts most. In my view, everybody needs to read it who can. Though I’ve never actually met Kim, and, since he charges about $3000 per hour for a private consultation, likely never will, I must say he has a remarkably sharp eye, and a pen that makes his analysis as good as probably anything I've seen recently.
Kim's words appeal to me especially because at this point in time I feel it's increasingly important to provide an appropriately sized counter-weight against the hollowed-out echo chamber of ultimately irrelevant here-and-gone exuberance that spreads around the world. It's as false as it is dangerous. People, on an individual, community and societal basis, will make decisions based on the illusion that growth is back and the recession but an unpleasant memory. Resources that might still have been used to build some kind of shelter from the storm are instead incessantly being wasted not on building solid foundations but on decorative gargoylic elements for the rooftop, never mind that the supporting walls have crumbled beyond any call at recognition or redemption. Are you realy hungry enough for good tidings to set your own house on fire?
What this will lead to, and indeed already has, is levels of poverty, both in scope and in depth, which we haven't seen in a long, long time. And which, unless we act to halt their advance, will blow our communities and societies to smithereens from the inside.
When I say that you can judge the quality of a society by the way it takes care of its weakest, many if not most Americans will immediately think of the word "socialism", even as they don't know what it means. But it's not about partisan political choices, about freedom, or the pursuit of happiness, or about big government. It's very simply about minimum requirements for a functional society, period. You can't have tens of millions of people being unemployed and/or living below the poverty line for extended lengths of time without resorting to oppressive measures of physical force aimed at keeping down those who have landed in your gutters. And if you would choose that option, one that many Americans would, knowingly or not, support, then freedom takes on the meaning of "the freedom to repress others", or even "the freedom to repress whoever you can", and down the line, as the single logical outcome, Orwell's "some animals are more equal than others".
While elements of this notion may seem to have much appeal to many of those who remain standing for now, don't be fooled. Unless you want to see soldiers and tanks overflowing your neighborhoods, not providing for your weakest is not an option. And no, you won't feel just as happy about your life, and that of your families, if and when on your way to work you’re forced to pass by children starving by the side of the road while clasping a shotgun in your lap. A functioning society, whatever political label you might prefer to stick on it, is possible only when its members manage to suppress the temptation to take so much for themselves that too little to survive is left for their neighbors.
And them there's your picks: either choose temporarily increased riches at the cost of blowing up your communities, or voluntarily give up on some of it in order to preserve them. Sure, we haven’t had to deal with issues such as these for decades now, and for most of us not in our lifetimes. That was because we were growing, or at least were able to fool ourselves into thinking we were. Present market developments have many among us believing we still are growing.
The human mind in all its segments and facets, developed over millions of years, is the ultimate and perfect sucker for such ideas. That doesn't make them any more true, though. You simply can't grow your economy by borrowing money from yourself. Still, that is, in the final analysis, the only underlying cause for the rally we're about to see run out the door never to return.
We are here, 25 years after 1984 has passed, and 61 years after George Orwell wrote his book by that name. If he could see us now, do you think he would he feel vindicated for being so right, or instead desperate that we have walked into the trap with our eyes wide open despite his warnings?
While you ponder that last question, and, if still possible, before my idea of letting "someone else do the talking for a change" turns even more silly, here's J.S Kim:
The Coming Consequences of Banking Fraud
by J.S. Kim
The Double Dip Recession, or the “W” shaped recovery that a minority of economists, such as Joseph Stiglitz, is now stating as a strong possible outcome of this current rally, should not be discussed in the realm of economics but rather in the more apropos realm of financial fraud. The fact that the upleg of the “W” shaped recovery that is occurring now will inevitably crumble in spectacular fashion will not be a result of any free market principle, but rather the direct consequence of a fraudulent scheme executed by an elite global financial oligarchy, otherwise known as Central Banks. If the mission of this current manufactured leg-up in Western stock markets was to fool the world into believing that global economies are recovering, then clearly, up until this point, the mission has been a resounding success. For those unfamiliar with the term “blowback”, it's a CIA term that was first used in March 1954 to describe the unintended consequences of US government international activities kept secret from the American people.Though this term has primarily been used to describe the consequences of covert military operations, “blowback” is an appropriate term to use to describe the coming consequences of banking fraud because the US government, US Federal Reserve, Wall Street, the US Treasury, and the Exchange Stabilization Fund have all engaged in domestic and international financial and monetary transactions that have been kept secret from the world, and that will have severe and negative consequences in the not so distant future. In fact, I predict that the blowback of these activities will not only exceed, but far exceed, the fallout the world experienced in 2008 at the prior apex of this current crisis. Most people today can not even fathom how bad the situation will become primarily because of all the secrecy that the banksters have engaged in – in US Treasury markets, the gold markets, the US dollar markets, agriculture commodities, stock markets, and financial markets – in hiding reality from the people.
In an article I wrote three months ago, on June 10, 2009, titled, “Can Rising Stock Markets Serve as a Confirmation of a Crashing Economy?”, I stated, “Whether I am right or wrong about US markets tanking by summer’s end/fall’s beginning, if [we] position [our] investment assets based upon an understanding of the fraudulent monetary system, [we] can still continue to create wealth.” While true, I was a bit early in raising the proposition of a stock market correction the month before; I amended my prediction in June upon realizing the breadth of the manipulation schemes occurring in Western stock markets. In today’s markets, only a complete investment novice would try to predict market behavior without accounting for the massive government intervention schemes and forays into stock markets as well as the computerized manipulation of daily trading volume. One of the main reasons, but not the only one, that I amended my target for the end of this rally this past June to the fall season is the fact that fall normally marks the return of much higher daily trading volume from the traditional summer lulls.
Thus, it is a much more difficult proposition for Central Banks and computerized trading programs to manipulate a continued rise in stock markets in the face of higher daily trading volumes.However, should daily trading volume remain surprisingly low or muted this fall, as is also a possibility, I have no doubt that this market rise can persist for an extended period longer before these false gains are eventually flushed away (but, of course, not before all US financial executives have had ample time to exit their positions quietly). In fact, the development of this false rally was the main topic of my article. The other scenario, one that includes a significant rise in daily trading volumes that trigger the start of a second massive decline in Western stock markets, would not surprise me either. It’s just a matter of observing the signs that forecast the waning efficacy of the fraudulent stimulus of Western markets (or for this matter, the fraudulent stimulus of Chinese stock markets too).
Remember that it is only the timing of this decline that I am uncertain of, but I am very certain that a significant decline of a shocking nature is coming. The last time I issued an adamant warning of a similar nature was on April 23, 2008, when again, the only issue about a market crash was timing, though the US S&P 500 index peaked just 18 business days after I wrote that article and proceeded to fall by more than 50%.
To truly gain more clarity regarding this recent Western stock market rally, consider a hypothetical scenario in which a person was kept ignorant of any action in the US stock markets for the entire previous six months. Instead, imagine that he or she was given the task of predicting US market behavior over the past six month period solely based upon cold, hard US financial and economic data stripped bare of any of the media-slanted headlines that perpetually spin bad economic data as positive or “less bad” than it truly is. Based upon the economic data produced from the last six months, what do you think this person would conclude? That stock markets have soared during this time or that they had crashed?
Of course, factor in the plethora of evidence about numerous PPT interventions to “save” markets during this time, and the strong US stock market rally no longer seems so illogical. But strip away any evidence of free-market manipulation and interference and in the face of true, undistorted economic data, our current market rally would be enormously puzzling. And this point alone should be sufficient to tell you how this rally will end. The inevitable conclusion of this rally isn’t just about the unsustainability of the massive bailout programs implemented by global Central Banks that have engineered this current market rally out of thin air, but its manifestation should trigger an investigation into the outright fraud committed by Wall Street, banking institutions, and Central Banks that has been aided and abetted by financial journalists.
For example, consider the following stories:
Demographers recently reported that Florida, the state known as the “mecca” for wealthy retirees in America, suffered its first population decline last year in more than 60 years, an event that delineates the collapse in wealth of American retirees and an event that is likely to repeat this year.
At the end of this past July, one of the largest ports in America, Long Beach, reported that the 20% year-over-year cargo business decline is among the sharpest since the Great Depression. This is not a trend specific to Long Beach. “It’s phenomenal how much things fell away even since December,” said Paul Bingham, managing director of global trade and transportation for IHS Global Insight, the business research firm that monitors North America’s biggest ports for the National Retail Federation.
As of September 4, 2009, shadowstats.com reported that unemployment in the US is now near 21% and is showing no signs of improving any time soon (when factoring in discouraged workers, part-time workers that can’t find full-time work, unemployed workers that have fallen off the unemployment roll, etc.). In fact, yesterday, Manpower’s Employment Outlook Survey reported that US employers’ hiring plans for the upcoming fourth quarter dropped to the lowest level in the history of its survey which dates back to 1962.
On August 15th, when BB&T (BBT) purchased failed US bank Colonial Bank, it wrote down Colonial Bank’s loans and real estate collateral by 37% and Colonial Bank’s construction loans by 67%. Yes, 67%! The severe markdowns of Colonial Bank’s assets should have set off warnings akin to a five-alarm fire among the financial media, but it did not, for the media increasingly caters to the interests of the elite bankers of this world at the cost of truth and freedom. If there are several things we can deduce from Colonial Bank’s failure, it is the following.
Though the Federal Deposit Insurance Corporation (FDIC) refuses to disclose the names of the banks on its “watch list”, it can be safe to assume that a bank just does not go bankrupt overnight and that the process of going bankrupt can be predicted many months in advance by personnel with access to a bank's financial statements and knowledge of its true financial condition. In fact, various newspaper articles reported that Colonial Bank was in negotiations with the FDIC as early as March, 2009, yet not one time, did the FDIC force Colonial Bank to come clean regarding its true financial health before it finally shuttered the bank five months later.
The fact that the FDIC is spotting massive trouble in the American banking system and covering it up should be massively worrisome to Americans. Because revelations regarding the truth about a US bank’s health only seem to occur after it fails, the favored handling of American banks with kid gloves by the FDIC should immediately beg the question, “How many more US banks are legitimately bankrupt today and just operating on fumes?”
Personally, I would not be surprised if sometime within the next six months, a considerably larger US bank failure causes a massive ripple effect of much greater consequence. Banks that are currently struggling with unreported and covered-up deepening problems of loan delinquencies such as Wells Fargo (WFC), may be among the large banks that are candidates for future bankruptcy despite the public categorization of such institutions in the “too-big-to-fail” category. Unfortunately, Wells Fargo, from a political standpoint, does not have the “most favored bank” status of a Citigroup (C) or JP Morgan (JPM), two institutions deserving of bankruptcy but clearly favored by the US Federal Reserve and the US government.
When one considers the fact that all government or state produced economic statistics have been massively distorted towards the side of optimism and away from reality throughout this global financial crisis, one should be even more worried when the occasional sparse negative statistic is reported, for it is likely that these statistics too are misrepresenting the truth.
Thus, in the face of all negative news that points to zero foundation and zero economic structural improvements, how has a multi-month stock market rally been able to spread across Asia, Europe and the US? Again, the answer is fraud, and thus should be analyzed through the prism of fraud and not the false prism of “economics”. There is no “economics” behind this latest global stock market rally, only fraud.For many weeks in August, just four stocks accounted for as much as 40% of composite volume on the NYSE: Citigroup, Bank of America (BAC), Freddie Mac (FRE) and Fannie Mae (FNM). In early 2007, Citigroup, Fannie Mae and Freddie Mac accounted for roughly 1% -3% of NYSE volume, a far cry from its recent 35%+ collective weight of the composite NYSE volume. Remember that this huge volume anomaly persisted not just for one day but for weeks on end during August. If Citigroup, Bank of America, Fannie Mae and Freddie Mac were a pharmaceutical collective that just discovered a cure for cancer and AIDS, then such volume anomalies would make sense. However, such massive trading volumes, as a percent of composite volume for the entire NYSE index, makes zero sense for companies, that for all intents and purposes, are on government bailout lifelines. It makes no sense, that is, unless massive free-market intervention is occurring in an attempt to save these firms.
Again, when viewed through the “fraud prism”, such activity makes complete sense. It is obvious that the “Rise of the Machines” has created markets that are now dominated by computerized high frequency trading programs that can execute trades as quickly as 0.5 milliseconds and have as their sole purpose the creation of short-term market distortions driven by statistical arbitrage that can be used to game the system and cheat their clients. Though this link describes how this scheme works in commodity markets for those that have been following the New York Stock Exchange, the use of high frequency trading programs to game the system at the expense of the retail investor has been glaringly obvious especially in the trading behavior exhibited this past summer.
The ironic part of this huge scam that has merely just re-inflated another massive stock market bubble is that the segment of the public that is so easily angered by government bailouts, billion dollar bonus plans for Wall Street executives and the chicanery of JP Morgan and Goldman Sachs (GS) (and justifiably so), are the very same people that so passively accept the mountain of lies that passes for financial reporting today (inexplicably so). It is ironic that this same collective of people, instead of rejecting this mountain of lies, continues to listen to their financial advisers at global commercial investment firms, even though these advisers are the same group of people that miserably failed to see the crash that started in the spring of 2008, when the factors behind the pullback back then was just as clear as the factors behind the future pullback that will occur in the near future. It is ironic that this same group of people continues to support, participate and fund a system that cares only about using their clients' money to lie, cheat and steal from them when a simple withdrawal of funds from the system is the antidote to ignorance-induced paralysis that will once again create massive crisis-induced losses in the future. Pulling one’s money from one’s current firm and switching to another firm that participates in this web of lies and deceit is not a solution either.
It is ironic that it is the same group of people that so readily accepts the Western media’s correct analysis of China’s stock market as a huge bubble through the lens of Austrian economic principles that simultaneously rejects any similar notion as applicable to US or UK stock markets, and instead, readily embraces heavily flawed and unsound Keynesian economic principles when evaluating Western stock markets. It is ironic that the same group of people that foolishly equates being “American” with blind support of the US stock market (i.e. “being bearish on the US market is un-American!”) is also completely ignorant of both the massive fraud that is perpetrated in US stock markets as well as the tenets of the US Constitution that sound great objections and warnings to the ruinous and foolish monetary policies that are implemented by bankers as their “solution” to our current economic crisis. And finally, the greatest irony of all is that the anger that brews inside those that have been tragically hurt by this crisis can coexist with the failure to recognize that it matters not in America if the President has the last name Clinton, Bush or Obama – that monetary and fiscal agenda inside the US for the last 17 years has not wavered nor changed one iota during this period of time because it was not these men that have been in charge of the economy but the men that manufactured these men’s rise to power and that control the US Federal Reserve and the world’s Central Banks, and thus the global monetary policy.
If one can not see the connection between Presidents, Prime Ministers and the banking families that rule Central Banks, one merely needs to open up a newspaper and follow their lives after they leave government office. It is not just a coincidence that ex-British Prime Minister Tony Blair, after leaving office, took a part-time consulting job with JP Morgan’s Jamie Dimon that reportedly pays him $5 million per year as well as another well-paid consulting position with Zurich Financial Services. In office, Mr. Blair was a consultant to the banking oligarchs in secret; out of office, he is free to be a consultant publicly. And one can be certain that current UK Prime Minister Gordon Brown and US President Barack Obama will be offered very considerable salaries and fees by the world’s top financial oligarchs as thanks for their current and past service to them once they leave office as well (especially Gordon Brown, for selling out his countrymen and selling more than half of England’s bank reserves to ensure that the financial oligarchs could maintain the US dollar as the de-facto international currency for 10 additional more years than it deserved to hold this status).
In the end, what is the most frustrating facet of these huge con games executed by the financial oligarchs is that the group of people that this article is most intended to help is often the group of people that will take most offense to this article and most steadfastly refuse to see the truth. Instead, they will only realize the truth when the economic future unfolds to the blueprint of those of us the media labels as “gloom and doomers” because we base our predictions on reality instead of fantasy and lies. Instead of labeling us as “gloom and doomers”, if the media at large ever conducted an unbiased analysis of the predictions of the “gloom and doomers” for the past 3 years, they would discover that the “gloom and doomers” have been spectacularly accurate in the majority of their calls while the financial demagogues they continually fawn over (that only serve the interests of the bankers) have been spectacularly wrong in the vast majority of their predictions. Yet, those that serve the international banking cartel with glowing and rosy predictions of economic recovery never suffer the negative consequences of being wrong all the time as the mass media all too happily continues to provide the largest public platform and the loudest voices to these people. Perhaps, if it is accurate to label “gloom and doomers” as realists, then one should label the optimists that make their calls based upon perpetrated fraud as banking shills and cogs in the investing machine, for their societal contribution of greatest significance is an opiate cocktail for the masses that is a mixture of deceit and lies mixed with unbridled optimism.
As they often say that life imitates art, I close my article today with a speech from the film “V for Vendetta” that is frighteningly relevant if you listen to this speech with a critical ear and replace the references to the war on terror in this speech with the current war the bankster fraudsters are committing against the people. A sound money backed by precious metals, can be the people’s liberation from this war. Anything that falls short of such a solution will be just another scam in an already long line of scams, of a solution sold to the masses, that in reality, is no solution at all.
A Decade With No Income Gains
The typical American household made less money last year than the typical household made a full decade ago. To me, that’s the big news from the Census Bureau’s annual report on income, poverty and health insurance, which was released this morning. Median household fell to $50,303 last year, from $52,163 in 2007. In 1998, median income was $51,295. All these numbers are adjusted for inflation.
In the four decades that the Census Bureau has been tracking household income, there has never before been a full decade in which median income failed to rise. (The previous record was seven years, ending in 1985.) Other Census data suggest that it also never happened between the late 1940s and the late 1960s. So it doesn’t seem to have happened since at least the 1930s. And the streak probably won’t end in 2009, either.
Unemployment has been rising all year, which is a strong sign income will fall. What’s going on here? It’s a combination of two trends. One, economic growth in the current decade has been slower than in any decade since before World War II. Two, inequality has risen sharply, so much of the bounty from our growth has gone to a relatively small slice of the population.
U.S. Poverty Rate Rises to 11-Year High as Recession Takes Toll
The U.S. poverty rate rose to the highest level in 11 years in 2008 and household incomes declined as the first full year of the recession took its toll, government data showed. The poverty rate climbed to 13.2 percent from 12.5 percent, and the number of people classified as poor jumped by 2.6 million to 39.8 million, according to a Census Bureau report released today. The median household income fell 3.6 percent to $50,303, snapping three years of increases.
Today’s report highlights concerns that consumer spending will play a limited role in leading any recovery from the worst recession since the 1930s. Plunging home values and stock prices have fueled a record $13.9 trillion loss in household wealth in the U.S. since the middle of 2007. "The decline in incomes we’re seeing certainly has implications for consumer spending, particularly post-housing bubble when families can’t tap into home equity through loans," said Heather Boushey, a senior economist at the Center for American Progress, a research organization headed by John Podesta, a leader of the Obama administration transition team.
The poverty rate is likely to keep rising through 2012, even after the recession ends, adding to pressure on the Obama administration to enact a second economic stimulus package, said Isabel Sawhill, a senior fellow at the Brookings Institution in Washington, a policy research group. "We will likely have not only a jobless recovery but also a poverty-ridden recovery," Sawhill said. "The stimulus money is going to go away long before the poverty rate peaks."
She noted that the unemployment rate in 2008, the year covered by the census study, averaged just 5.8 percent, compared with 8.9 percent so far this year. The rate last month jumped to 9.7 percent, the highest in 26 years. Sawhill is among analysts forecasting a further drop in incomes this year, reflecting the worst job losses of any recession since World War II. Since the slump began in December 2007, the U.S. has lost 6.9 million jobs. Payroll cuts peaked at 741,000 in January and have since subsided, with 216,000 job losses in August, according to the Labor Department.
The rise in poverty is putting a strain on social services and charities. At the Atlanta Community Food Bank, demand in August was up by about 20 percent from a year earlier, said Bill Bolling, the founder and executive director. "There are a lot of people who have never needed help that need it now," he said. "It is quite a different environment." Three of four U.S. regions saw declines in real median household income in 2008 from the previous year -- the South, Midwest and West. Income in the Northeast was statistically unchanged, the census report showed.
Real per capita income for the U.S. as a whole declined by 3.1 percent last year to $26,964, the report showed. Economists surveyed by Bloomberg forecast unemployment to reach 10 percent early next year, even as they predict the worst recession in seven decades will come to an end in the second half of 2009. President Barack Obama in February signed into law a $787 billion stimulus package aimed at stabilizing the economy and creating or saving about 3.5 million jobs. So far, the bill has created or saved as many as 1.1 million jobs, the White House said today.
The number of people without health insurance coverage rose to 46.3 million last year from 45.7 million in 2007, the census report also said. The uninsured still accounted for 15.4 percent of the population, the same as in 2007, according to the Census figures. In order to cut health-care costs and make health care accessible to all Americans, Obama and Democratic lawmakers have proposed taxing private insurers, trimming spending in the federal Medicare program for the elderly and disabled and creating a more affordable public plan to expand coverage.
The poverty threshold in 2008 was defined as $22,025 in income for a family of four. The poverty rate typically rises during a recession and continues to climb even as the recovery begins, Census Bureau figures show. During the economic expansion of the 1990s, the poverty rate declined each year from 15.1 percent in 1993 to 11.3 percent in 2000. It then climbed to 11.7 percent in 2001, as the nation slid into recession, and continued its ascent to 12.7 percent in 2004.
Poverty Rate Rises; Uninsured Rate Stays Flat
Today the Census Bureau released its annual report on income, poverty and health insurance.The data were collected in March of this year.
Highlights (and charts pulled from a Census Bureau slide show):
- The official poverty rate rose in 2008 to 13.2 percent, from 12.5 percent in 2007.
Census Bureau- Income at the 10th percentile fell by $500, while income at the 90th percentile ticked downward by $3,000. Comparing the change in income at the 90th and 10th percentiles over the past forty years suggests that inequality is increasing. Between 1967 and 2008, the income at the 90th percentile increased 63.1 percent, while income at the 10th percentile increased 32.4 percent.
Census Bureau- The percent of people who were uninsured remained essentially the same, at 15.4 percent. A smaller share of children were without health insurance, 9.9 percent — perhaps because more became eligible to receive government insurance.
Source: Census Bureau- Nearly one in five children is living below the poverty threshold.
Source: Census Bureau- Continuing the downward trend of the last eight years, a smaller percentage of people received private or employer-based health insurance last year compared to 2007. Subscription rates to government health insurance coverage grew. Census officials said they were unsure about the extent to which the increase in government insurance recipients was a result of more Americans qualifying for Medicaid and related programs for the poor. An alternate explanation would be that more Americans joined Medicare’s rolls.
Source: Census Bureau- Among people ages 18 to 64, 20.3 percent were uninsured in 2008, up from 19.6 percent in 2007.
- Almost 45 percent of noncitizens were uninsured.
- The plurality of the uninsured are between the ages of 25 and 44.
Source: Census Bureau- Of those who are uninsured, 21 percent make $75,000 or more.
Census Bureau
Children in modern Britain living like 'times of Dickens'
Poverty levels in parts of Britain mirror "the times of Dickens", leaving schools struggling to cope with increasing numbers of children lacking the most basic personal skills, according to a teachers’ leader. Some pupils from the poorest areas arrive at school unable to dress themselves or use a knife and fork, with some even unable to use a toilet properly, she said. Lesley Ward, president of the 160,000-strong Association of Teachers and Lecturers, warned that many children were also being relied upon to raise younger brothers and sisters and lacked stable father figures in the home.
In a speech last night, Mrs Ward, a primary school teacher from Doncaster, said Labour had "tried hard on this issue" but had failed to fill the vacuum left by the death of the mining and manufacturing industries in many working-class communities. She said it meant a "small, significant and growing minority" of children were being raised in families with low expectations and a level of poverty "mirroring the times of Dickens". It was "next to impossible", she added, for schools to counter the effect of serious deprivation, family breakdown and a lack of parenting skills in many communities.
Her comments follow the publication of figures showing nearly three million children still live below the poverty line in Britain. Ministers have admitted there is little chance of hitting their target to half child poverty by 2011. It also comes amid fears that children’s education chances are still too strongly linked to family background. Private schools extended their lead over the state sector in GCSE and A-levels this summer. And figures published this week by the Organisation for Economic Cooperation and Development showed the UK had more teenagers out of work and without a college place than almost any other developed nation.
In her speech, Mrs Ward said: "I am talking about perfectly healthy children who enter school not yet toilet-trained. "Children who cannot dress themselves, children who only know how to eat with a spoon and fingers, and have never sat around a table to enjoy a home-cooked family meal. Children who think that the word ‘no’ means if you throw a wobbly it will miraculously turn into yes. "Children who get themselves, and sometimes their younger siblings, up in the morning. Children who bring themselves to school at very young ages. Children who sometimes don’t know who will be at home when they get home – if anyone. Children who don’t know exactly who the father figure is in the home from month to month."
She added: "I know of a pupil who actually saw, from the classroom window during a lesson, his house door being kicked in and his dad being led out of the door in handcuffs – this was during Sats week. He did not achieve the level he should have. Are we surprised?" Doncaster has already been at the centre of a series of child protection controversies. The local council was criticised in a damning report recently following the deaths of five children known to the authority. And last week police and social services came under fire for failing to stop two brothers in the nearby former pit village of Edlington terrorising the local community, culminating in a savage attack on two boys.
Mrs Ward, who has just been appointed president of the ATL, the third biggest teaching union, said low expectations had been created among parents following the decline of heavy industry. Typically male-dominated jobs have been replaced in many areas by part-time, low-paid service jobs filled by women, she said. Speaking in central London on Wednesday, she said: "Teachers all over the country are working in areas like this. Areas where often more than half the children receive free school meals, where one in ten of the school population is on the at risk register, where 10 per cent, or more, of the children in each class have some form of special need.
"These children come from some of our poorest communities, starting school with the huge weight of deprivation on their shoulders, and it can be next to impossible to counteract the effects of such deprivation. I would like to stress I am not talking about the whole of our school population, but a small, significant and growing minority." The comments come as a survey published today found more than a third of parents believed Labour had failed to live up to its election pledges on education.
Almost nine in 10 said all political parties hyped up their promises to secure votes, according to the study by the charity Edge, although most parents did not believe the Conservatives would fulfil their pledges to make schooling a priority. A spokesman for the Department for Children, Schools and Families said: "There has been an enormous programme of social reform over the past 10 years that has lifted 500,000 children out of poverty and in June the Government enshrined in legislation it's commitment to eradicate child poverty by 2020. "Most three and four year-olds now access free childcare, thanks to £3 billion of annual funding by Government, which helps many parents get back to work.
We have also committed to spending around £2 billion more by 2010 on public services aimed at breaking cycles of deprivation - key to meeting our 2020 target. These focus on childcare, raising attainment, improving schools, reducing health inequalities and improving school transport." Nick Gibb, the Tory shadow schools minister, said: "It’s impossible for teachers to get on with the job of teaching if children in the class have not mastered some of the basic life skills. "There are pockets of the country that have been written off over the past few years with a culture of low expectations, low levels of educational achievement and high numbers of people not working. We’re determined to address these problems and not leave any sections of society behind, so that all children have the opportunity to succeed."
The Myth of a Jobless Recovery
Like all good parrots, the talking-heads in the North American media can be counted upon to regurgitate buzz-words over and over again – even when they don't have the faintest idea what those words mean. The latest example of mindless droning from these pseudo-reporters is that the U.S. economy is headed for a "job-less recovery". As with all oxymorons, no intelligent person would/should be foolish enough to add these buzz-words to his/her lexicon. By definition, an "economic recovery" means a net increase in economic activity, which also dictates positive wealth-generation. When an economy is producing wealth, this must also result in job-creation.
We can invent scenarios where such job-creation is delayed. For example, an economy with a large, but mostly automated manufacturing sector could see a surge in demand (and production) as economic conditions improve. Over the short-term, it is certainly possible that such an economy could sell most of its production abroad. Thus, an economy generating a significant increase in net wealth could temporarily produce little new employment in the domestic economy.
However, this must only be a temporary situation. Though the "trickle-down" theory of right-wing capitalists has been thoroughly discredited as a model for economic growth, there is a kernel of truth buried within this propaganda. When an economy produces significant amounts of wealth, even if that wealth-creation is focused primarily in the hands of the wealthiest members of society, these people spend some of that money – creating wealth and employment opportunities for the "little people" further down the economic ladder.
The "trickle-down" theory fails as an economic model for the same reason the phrase "job-less recovery" fails the test of rationality. When only the wealthiest people in a society have disposable income (people with enough wealth that they don't need employment income to keep spending), it is mathematically impossible to have a robust economy. The reason for this revolves around an economic concept known as the "marginal propensity to consume". While this sounds complicated, like most jargon, it is actually quite a simple and obvious notion when explained in ordinary English. Basically, the lower a person's level of wealth/income the more they spend out of each new dollar they receive.
Thus poor people have a marginal propensity to consume of "1" (or 100%), because due to their minimal wealth, they are forced to spend their money as fast as they receive it – just to survive. Conversely, at most, a billionaire might have a marginal propensity to consume of 0.1 (or 10%) - and likely far less – since these people have so much wealth (and consumer goods) already, that there is little need or motivation to spend any more each time their wealth increases by another dollar.
Plutarch, a Greek philosopher, uttered this famous quotation over 2,000 years ago: "An imbalance between rich and poor is the oldest and most fatal ailment of all Republics". The reason this is true is based upon our marginal propensities to consume. When wealth is evenly dispersed in a society, this means that a high percentage of that wealth is in the hands of people with a high marginal propensity to consume.
These people spend a high percentage of each dollar they take in. And then the person receiving that dollar spends a high percentage of that dollar, and so on and so on...
Conversely, in a society where wealth is highly concentrated in a tiny percentage of the population (like the United States, today), only a small fraction of each new dollar of wealth which is produced gets spent. This small "multiplier effect" dictates weak economic activity – since instead of being spent and re-spent, money collects in large pools of "idle wealth", which produces no economic benefit for a society.
Nowhere are these economic principles more true than in a consumer economy like the United States. With the exodus of manufacturing, the U.S. economy now produces little wealth. Therefore, for well over a decade this economy has become totally dependent on ultra-high levels of consumption to sustain the economy. In fact, for over two years, the U.S. as a whole had a negative savings rate – meaning a marginal propensity to consume of greater than 100%.
As we have seen (and as any child could predict), this was totally unsustainable. However, what makes this brief period of insanity truly frightening is that with an extremely heavy concentration of wealth, during the time when the economy had a negative savings-rate, the wealthy were still socking-away billions of dollars per year – meaning those at the bottom were spending much more than 100% of their incomes. This brings us back (finally) to the mythical "job-less recovery".
Apart from the phony, "economic growth" of the U.S. tech-bubble, followed by the even more-fraudulent housing bubble (where illusory "wealth" produced temporary jobs), all that Americans have experienced for roughly twenty years are "job-less recoveries". However, as I have illustrated with fundamental principles of economics (which are based upon both mathematical and logical certainty), you cannot have a healthy economy (i.e. a real "recovery") without the masses having significant spending power – since at no time in human history has the spending of the wealthy been enough to produce a healthy economy (this was "old news" 2,000 years ago).
Therefore, if the masses don't have jobs, then the only way they can spend money is to borrow money. Here, at last, we expose the truth of the "job-less recovery": in previous years, Americans were able to create the (temporary) illusion of economic health through excessive borrowing – and then spending those borrowed dollars virtually as fast as they borrowed.
Essentially, simply saying "job-less recovery" became a sort of self-fulfilling prophecy, where like "Pavlov's Dogs", Americans would automatically begin spending again (with borrowed dollars) as soon as they were told the economy had "recovered". There have been no "job-less recoveries" in the past – not in the United States, or anywhere else in the world. All that happened in previous "job-less recoveries" is that Americans mortgaged their futures (and the futures of their children) through dramatically increasing their debt levels, and then recklessly spending those borrowed dollars on mostly pointless consumption.
As stated before, this is completely unsustainable – and now, today, that binge is over. Americans have maxed-out their credit. The days of borrowing-and-spending are over. As a result, the only thing which can pull the U.S. economy out of what appears to be a terminal, downward spiral is real economic growth – and the jobs which always accompany such growth.
When the talking-heads (and the propagandists who put those words in their mouths) say the words "job-less recovery", what they are really saying is "no recovery at all". While in past years, the magic of credit-cards could conceal that false propaganda, that "magic" is a thing of the past. Today, the absurdity of the "job-less recovery" is about to be exposed in the U.S. once-and-for-all – with sufficient clarity that even the mindless, media talking-heads will be able to see the inherent falsehood in this myth.
Consumer Credit Collapse
Hoping for a consumer-led recovery? Don't hold your breath. The latest data from the Federal Reserve shows that the year-over-year decline in total consumer credit is collapsing at an accelerating rate. God forbid consumers go back to living within their means.
U.S. Foreclosure Filings Top 300,000 for Sixth Straight Month
Foreclosure filings in the U.S. exceeded 300,000 for the sixth straight month as job losses that boosted the unemployment rate to a 26-year high left many homeowners unable to keep up with their mortgage payments. A total of 358,471 properties received a default or auction notice or were seized last month, according to data provider RealtyTrac Inc. That’s up 18 percent from a year earlier, and down 0.5 percent from July, the Irvine, California-based company said in a statement. One in 357 households received a filing.
Foreclosures rose from a year earlier as companies cut payrolls by 216,000 workers last month, boosting the U.S. jobless rate to 9.7 percent, according to Labor Department data released last week. The rise in unemployment is having a bigger impact than an effort by the U.S. government and banks to modify mortgages and prevent foreclosures, said Morris A. Davis, an assistant real-estate professor at the Wisconsin School of Business.
"The foreclosure numbers are largely unemployment related," Davis, a former Federal Reserve Board economist, said in an interview. "As long as 15 million Americans are unemployed, record foreclosures will continue." Foreclosures aren’t abating even as demand is returning to the U.S. housing market after a three-year slump. The number of contracts to buy previously owned homes rose more than forecast in July and increased for a record sixth consecutive month, while mortgage buyer Freddie Mac said the average price rose 1.7 percent in the second quarter.
Nevada had the highest foreclosure rate in August, with one in every 62 households receiving a filing, even with an 8.4 percent decrease in foreclosures from July, RealtyTrac said. August filings were up 53 percent from a year earlier, with 17,902 Nevada properties receiving a foreclosure filing. The second-highest foreclosure rate in August was recorded in Florida, with one in every 140 households receiving a filing, followed by California, where one in 144 households received a foreclosure filing.
A 9.6 percent month-to-month decrease in filings helped lower Arizona’s foreclosure rate to fourth-highest in August from third-highest in July, RealtyTrac said. One in every 150 Arizona households received a foreclosure filing last month, still more than twice the national average, the company said. Forty-seven banks have begun 360,165 modifications through the U.S. government’s Making Home Affordable program, up from about 235,247 in July, the U.S. Treasury said in a report yesterday.
Bank of America Corp. and Wells Fargo & Co., among the worst performers of banks in the foreclosure-prevention plan, stepped up their pace of mortgage modifications by at least 60 percent last month. Bank of America more than doubled its number of modifications started to 59,891 in August from July, while Wells Fargo increased by 64 percent to 33,172. While the loan revamps may prevent some foreclosures, many homeowners facing repossession have prime loans, mortgages considered less risky than the subprime loans blamed for much of the housing crash, and can’t make their payments because of job losses, said Richard K. Green, director of the University of Southern California Lusk Center for Real Estate.
"When people live in a housing market that’s dropped 30 or 40 percent, and they lose their jobs, that’s a recipe for default," Green said. About 4.3 percent of U.S. homes, or one in 25 properties, were in foreclosure in the second quarter, the Washington-based Mortgage Bankers Association said last month. That’s the most in three decades of data, and loans overdue by at least 90 days, the point at which foreclosure proceedings typically begin, rose to 7.97 percent, the highest on record.
In the RealtyTrac survey, Michigan, Idaho, Utah, Colorado, Georgia and Illinois accounted for the other states with the top 10 highest rates of foreclosure filings. Six states accounted for 62 percent of the nation’s foreclosure filings. New Jersey had the 11th highest rate with 8,316 filings, a 28 percent increase from a year earlier. Connecticut ranked 24th with 2,189 filings, a 22 percent increase. New York had the 39th highest rate with 5,350 filings, down 2.3 percent. Las Vegas had the highest foreclosure rate among metropolitan areas with a population of 200,000 or more. One in every 53 households received a notice in August, up 48 percent from a year earlier and down 11 percent from July. Also in Nevada, the Reno-Sparks area had the seventh-highest foreclosure rate, with one in 86 households receiving a filing, RealtyTrac said.
California had six metropolitan areas among the top 10. Stockton and Merced ranked second and third; Riverside-San Bernardino-Ontario, Vallejo-Fairfield and Modesto were fourth through sixth; and Bakersfield was 10th. Two Florida metropolitan areas were in the top 10, with Orlando- Kissimmee at No. 8 and Cape Coral-Fort Myers at No. 9, according to RealtyTrac, which collects data from more than 2,200 counties representing 90 percent of the U.S. population.
Major Banks Still Grappling With Foreclosures
A year ago this week, the financial crisis sent the stock market off a cliff. At the heart of troubles was a plague of bad home loans. Millions of people couldn't pay their mortgages, and banks were losing billions of dollars. The foreclosure mess hasn't improved. The numbers keep getting worse, with foreclosures at record highs and rising, despite a major effort by the Obama administration to prevent them.
At Bank of America, which manages more home loans than any other bank in the country, Senior Vice President Ken Scheller is in charge of "home retention" — an effort he says is designed to "keep as many people in their homes as possible." His offices are in the middle of a giant call center in Plano, Texas. It's the front line of the foreclosure crisis: If somebody can't pay his or her mortgage and calls Bank of America, the call gets routed through these offices. Scheller says this group and others like it are receiving about 2 million calls a month.
In June 2008, Bank of America bought home lender Countrywide, which was at the center of the mortgage storm and was quickly collapsing. As a result, Bank of America now manages Countrywide's loans, too. Scheller, who used to work for Countrywide, says the bank now has 8,000 people who are dealing specifically with the foreclosure crisis. He says that number doubled in the past year.
Tiffany Palmer, who works on the call center floor, says more and more homeowners are in trouble because they've had their hours cut at work or because a spouse has lost a job. With the recession, a lot more middle-class people with decent credit can't pay their mortgages. Nationally, one-third of the people who are falling behind on their mortgages are in traditional "prime" fixed-rate mortgages.
Cutting people deals often makes good business sense, because lenders can lose tens of thousands of dollars if they have to foreclose. Scheller says in most cases, modifying the interest rate on a loan, which gets the customer making payments again, "is a much better financial situation for everyone." Economists, including Federal Reserve Chairman Ben Bernanke, have repeatedly said that preventing foreclosures is good for the housing market and the whole economy. But, in many cases, loan modifications aren't going through.
The U.S. Treasury Department has started issuing banks foreclosure report cards. The most recent one, out Wednesday, found that under the president's plan, Bank of America had modified 7 percent of loans that were more than 60 days delinquent. JPMorgan Chase extended loan-modification offers on 25 percent of its delinquent loans. CitiMortgage was at 23 percent, and Wells Fargo had modified 11 percent.
Janine Emlinger, a 48-year-old homeowner in Curtice, Ohio, says she's been trying for a year to get a loan modification, but Bank of America keeps losing her documents. So she keeps falling further behind on her payments. "It's very, very stressful, and it weighs heavy on you," she says. "I don't know where we're going to go." Emlinger has been in her house for 22 years. She says she thought she was getting a fixed-rate loan but wound up with an adjustable loan that made her payments skyrocket. The mortgage company that made the loan went bust. Bank of America is now managing, or "servicing," the loan, so it basically decides whether Emlinger gets to keep her house.
Emlinger seems like the perfect candidate for a lower interest rate. She got hit by a truck while mowing grass for the city and will get disability checks for the rest of her life.
Lenders and investors say they don't want to make loan modifications in cases where the borrower is just going to default again. But Emlinger is one of those cases in which everybody would win. She has a stable income to keep paying a mortgage at an affordable interest rate. When NPR inquired about her case, Bank of America said it was starting to negotiate a loan modification. But it's unclear why she was denied so many times over the phone.
"I see everyday people who are denied for loan modifications where we don't quite understand what the rationale is behind it," says Mark Pearce, a deputy banking commissioner in North Carolina who is part of a nationwide foreclosure task force. Pearce says it's not just Bank of America; banks are making these decisions inside a black box in their computer systems. It's not transparent. What's more, he says, homeowners often aren't told why they don't qualify. "Oftentimes we find that the rationale is that the paperwork didn't get filed, or they lost a document, or they needed updated financial information and didn't get it," Pearce says.
A lot of people think the banks are just overwhelmed by the millions of people who're in trouble, and that they haven't put the right technology and training in place. Others think the banks may be skeptical that these modifications are actually going to work. Whatever the reason, Pearce says, even now, a couple of years into the mortgage crisis, the systems to prevent foreclosures often seem scrambled.
At the Bank of America call center, I sit next to Crystal Ingram as she takes a call from a homeowner who is losing one of his two jobs. He's having trouble making his payments. So she plugged his financial information into her computer, explaining that she's going to see about a recommendation for a loan modification. But, after a few seconds, the computer says the person doesn't qualify.
"I'm not getting a recommendation for a modification," Ingram tells the homeowner. "You are going to have to come up with some more income." She tells the borrower he has to be able to support even a reduced mortgage payment, and he doesn't make enough money to do that. That sounds reasonable. Except that as I look over her shoulder at the borrower's income, he still makes $2,400 a month, and judging by what he owes — around $200,000 — it appears that he actually should qualify for help through the government's Making Home Affordable plan.
I ask Ingram about this, but she says that that isn't right. "No, he does not qualify," she says. But, in this case, too, after NPR inquired further with supervisors, it turned out that the homeowner actually did qualify. So, even just while I was at the call center, either the computer or somebody made a mistake, and a homeowner got rejected when he shouldn't have. In the end, the bank did offer the homeowner a loan modification. Bank of America says that while NPR's inquiry may have expedited that decision, the bank would have come to the same conclusion through its own review process.
Housing advocates say major banks are denying help to thousands of people who should qualify, and many don't get saved by a second look. Meanwhile, this year alone, 2 million people are on track to lose their homes through foreclosure — the most since the Great Depression.
Lessons to be learnt
Jim Rogers, Chairman of Rogers Holding: We need some more Lehmans so we can get out of this. Over the past 20 years Messrs Greenspan and Bernanke introduced crony capitalism to the West which is leading to a lost decade[s]. Market fundamentals are that failures should collapse and be replaced by creative new forces rather than being propped up as zombies. Financial institutions have been failing for centuries and the world has survived. Had the central bank allowed the failure of Long Term Capital Management to run its course, Lehman, Bear Stearns, et al would still be here.
Everyone would have lost so much capital and fired so many incompetents that the madness of serial bubbles (dotcoms, housing, consumption etc) would never have occurred. Consider the alternative had they propped up the bankrupt Lehman. There would be even more of the same insanity in our central banks and governments than we have now. The idea that a problem of too much debt and too much consumption can be solved by more gigantic debt and consumption is ludicrous.Would that governments stop interfering with fundamental principles and let the market clean out mistakes! Marx is singing in his grave there in London as the US government now controls the auto, mortgage, insurance, banking, et al industries and he has not fired a shot. Letting Lehman fail was perhaps the only thing governments have done right during this whole drama.
Meredith Whitney, Head of Meredith Whitney Advisory Group: I was most nervous a year ago about the real risk to retail deposits. People weren’t paying attention to the scariest part of the system – the collapse of Wachovia and Washington Mutual, which happened without damaging retail deposits on a systemic basis. One of the more concerning things now is that the government is supporting such a large part of asset prices. If they take their foot off the pedal with an exit and asset prices fall, that will be a real test and could hit banks again. We are clearly not out of the woods yet. We are more stable than a year ago and, importantly, the underlying retail deposits are surely safer. But, across the US, the top five banks still have the top market share in all the major states. Their asset levels are artificially propped up. They have written up their assets correspondingly. I’m worried about the effects when the central banks stop buying.
Rodgin Cohen, Chairman of law firm Sullivan & Cromwell: [The markets] were extraordinarily chaotic, extraordinarily fragile and, certainly in my lifetime, the closest they have ever been to collapse ... There were those that were more comfortable that we would somehow get through it ... The optimism came from ... a lack of understanding about how much you didn’t know. If there is a single factor which is the principle source of what has happened, it is the absence of knowledge of how much risk was in the system and where it was. The one statement I remember making to the government in arguing for Lehman to be saved was that you were trying to deal with a raging fire. Could you know how deep and how wide you had to make the fire break to make sure the flames could not get over it? My view was, nobody could be sure since we were in absolutely unique circumstances. We had never seen such a fire.
Five Points Worth Making On The Markets, Earnings, And The Economy
by David Rosenberg
1. This remains a hope based rally with strong technicals All the growth we are seeing globally this year is due to fiscal stimulus. I say that because during this six-month 50%+ rally in the S&P 500, the U.S. economy has shed 2.4 million jobs, which is almost as many as we lost during the entire 2001-02 tech wreck in just six months. The market's ability to shrug off the loss of 2.4 million jobs is either a sign that it is treating this as old news or sees the cost- cutting as good news for profits. Either way, what we are seeing transpire is without precedent the magnitude of the employment slide versus the magnitude of the market advance. Truly fascinating stuff.
2. Companies have not really been beating their earnings estimates only the very final estimates heading into the reporting quarter. For example, the consensus view for 3Q EPS at the start of the year was $21.00, last we saw the estimates were down to just over $14.00. But there is a deeply rooted belief that earnings are coming in better than expected. This is a psychology that is difficult to break. It is completely unknown (for some reason) that corporate revenues are running at a -25% YoY rate, which compares to the -10% we saw at the worst part of the 2001-02 bear market and the -3% trend at the most negative point in 1991.
3. Valuation is a poor timing device but even on "normalized" trailing 10-year earnings, the S&P 500 is trading near 18x, which is now above the historical average of 16x.
4. All the growth we are seeing globally this year is due to fiscal stimulus; not just here in Canada and the U.S., but also in Korea, China, the U.K., and Continental Europe too. For 2010, the government's share of global growth, by our estimates, will be 80%. In other words, there are still very few signs that organic private sector activity is stirring. For a Keynesian, government stimulus is necessary, but the question for an investor is the multiple one attaches to a global economy that is still relying on a defibrillator. The problem is that governments do not create income or wealth, and today's stimulus is really a future tax liability. Curiously, that future tax liability is likely going to pose a roadblock for the return to a "normalized" $80 operating EPS estimate that strategists are now starting to pen in for 2011.
5. While Mr. Market may be pricing in a fine future for the U.S., but when the 3-month Treasury-bill yield is 13bps north of zero, which is completely abnormal, you know that there are still substantial fundamental imbalances that need to be worked through.
No Big Fix for Global Finance
New regulations will be tepid—and will leave the global financial system, and taxpayers, at risk. World leaders are talking bravely about fixing the global financial system. As the Group of Twenty heads toward an important summit in Pittsburgh on Sept. 24-25, they are vowing to bang out a regulatory structure that will keep rich, careless bankers from once again driving their firms to ruin and then getting bailed out by taxpayers. Finance ministers and central bankers who met in London earlier this month reported "substantial progress in delivering our ambitious plan."
But their plan is far less ambitious than what some voices were advocating as recently as last spring. Bank lobbyists have fought back hard, and recent improvements in the global economy and financial markets have robbed momentum from the reformers. What's more, truly ensuring change on a global scale would probably require a single international regulator with power to intervene in local affairs. Yet there is little appetite for that among the G-20, which includes the major industrialized countries as well as China, Brazil, and other developing powers. The likely result? A package of worthy but lukewarm reforms that leave the global financial system—and taxpayers—exposed to another costly bust some years down the road. "We're not going to have a revolution," says Edwin M. Truman, a senior fellow at the Peterson Institute for International Economics who advised Treasury Secretary Timothy Geithner before G-20 meetings last spring. "The question is to what extent you're going to have, over the next year, a substantial evolution."
International and U.S. proposals on the table target the hot topics: increasing capital requirements, corralling the "shadow banking system" of nonbank lenders, and otherwise trying to ensure that risk doesn't balloon out of control. But in most cases they rely on the kinds of tools that failed the last time around, when supervisors proved less than vigilant, turf squabbles impeded regulation, and fears of foreign competition led governments to yield to industry demands for a lighter touch. In the chaotic months following the bankruptcy filing of Lehman Brothers on Sept. 15, 2008, few ideas seemed too extreme for consideration. Break up the giant banks. Regulate the survivors like utilities. Ban casino-like bets on the possibility of default by corporate borrowers. Prohibit credit-rating agencies from being paid by the agencies they rate. Above all, build a mechanism so that even huge multinational banks could fail without jeopardizing other firms and national economies.
The G-20 plan doesn't do any of that. It focuses on bolstering the cushions of capital that financial firms must hold, making sure they have the liquidity to survive a cash squeeze, and strengthening the supervision over them. By the end of this year global regulators are supposed to come up with a plan for banks to build up capital buffers in good times that they can draw down in bad ones. That would discourage banks from overlending in booms and choking off credit in busts, as they tend to do. Unfortunately, experience shows that banks are good at getting around tougher capital standards or persuading regulators to ease them. The G-20 nations aren't even seeking fundamental restructuring. Banking firms could continue collecting government-insured deposits with one hand and, in other subsidiaries, make risky bets on the market—though the cost of doing so could rise.
To succeed, rules also must be applied consistently around the world, but gaps are appearing in European and U.S. officials' united front. European regulators want to establish explicit boundaries for bankers' pay and tie capital requirements to the risk of an institution's underlying assets. U.S. officials, on the other hand, are resistant to strict pay limits and are focused on the capital requirements of the biggest and most important institutions. Scariest of all, there is still no procedure for countries to share responsibility for the takeover and resolution of a failing multinational financial firm like Lehman or insurer American International Group (AIG). Another uncontrolled failure today could set off a global domino chain of failures. Says Raghuram G. Rajan, the former chief economist at the International Monetary Fund who currently teaches at the University of Chicago's Booth School of Business: "The difficulty of international dialogue means [establishing a procedure] will take forever, by which time people will have forgotten and something much more diluted will have come out."
International coordination isn't the only stumbling block. The U.S. is moving gingerly even on purely domestic issues. For example, regulating insurance conglomerates like AIG is proving tricky. Under the reorg plan being pushed by Geithner, U.S. insurers would continue to operate under a patchwork of state regulation, though the largest would get additional scrutiny from the Federal Reserve or a committee of federal regulators. Officials in the Obama Administration also considered consolidating the Securities & Exchange Commission, which oversees the securities market, and the Commodity Futures Trading Commission, which polices futures and commodity markets. But they concluded it would take too much political capital to buck the congressional agriculture and financial committees that split responsibility for the agencies—and that enjoy the campaign contributions that follow the oversight. Now the proposal calls for just one of more than a half-dozen federal financial regulators to disappear.
The Administration's goal of consolidating all financial consumer protection in a single agency—perhaps its boldest proposal—is running into a buzz saw of bureaucratic infighting and industry lobbying. "Our strategy is to kill it," says one lobbyist for the financial-services industry. Furthermore, banks selling complex derivatives—essentially financial bets—would be free to continue writing "custom" contracts under the Geithner plan. That would sidestep many of the protective mechanisms built into the brand-new exchanges and clearinghouses designed to temper the risk of such instruments. It's not just bank-hating liberals who are concerned. R. Glenn Hubbard, who was President George W. Bush's chief economic adviser from 2001 to 2003 and is now dean of Columbia University's business school, is generally reluctant to interfere in the markets more than necessary. Yet he says he's disturbed by what he sees now. Hubbard favors stronger measures to improve the security and transparency of derivatives trading. "Ironically, the Obama Administration is less tough on Wall Street than many market participants and academics who have recommended reform," Hubbard says.
To be sure, the plans in the works are better than nothing. One clever idea proposed in the Treasury documents is to require financial firms to sell a big issue of bonds that would automatically convert to equity if money were tight. Such securities would relieve the firms of their debt payments and replenish their capital even in panicked markets. Another idea Geithner favors is to force big firms to draw up plans that regulators could use to dismantle the institutions. (One reason Lehman Brothers was so hard to shut down was that it had more than 600 subsidiaries.) And the new capital rules may dissuade banks from collecting deposits while participating in risky trading activities. They would have "no choice" but to separate into "specialized entities," Karen Shaw Petrou, co-founder of consultancy Federal Financial Analytics, predicted in a Sept. 4 report. Douglas J. Elliott, a former JPMorgan Chase (JPM) banker now at the Brookings Institution, generally praises the reforms: "If you believe the single biggest problem was that everyone got careless, then you'll be happier because everyone will have to be more careful."
Trouble is, the reforms are weaker than expected, and they're likely to be watered down even more by the time they're passed. As markets recover, lobbying for laxer regulation will intensify. Already financial engineers are at work on an array of insurance, derivative, and other products designed to exploit loopholes in the new regulatory regimes. Meanwhile, the biggest financial firms have only gotten bigger and harder to control. The Economic Policy Institute notes that the four biggest U.S. banks have about 45% of industry assets, up from around 27% in 2003. Reform? Yes. Fundamental change? Not by a long shot.
EU To Establish Powerful Financial Authority
Banks in Europe are facing tough new scrutiny from a planned European financial supervisory authority. It would be more powerful and could take action to prevent systemic problems if national authorities did not. One year after the outbreak of the worst economic crisis since World War II, the European Union is close to creating an EU-wide financial markets regulatory authority. In its Thursday edition Germany's Süddeutsche Zeitung reported that it had obtained draft regulations that, if approved, would create three powerful supervisory authorities alongside an early warning system which would monitor banking, financial markets and insurance and pension funds across Europe. The authorities could take action to prevent a repeat of the current financial crisis that precipitated the global economic slump. The steps to create the new authority came at the request of EU member states.
According to the plans, the European controllers would be given the right -- in cases where a crisis is foreseeable -- to directly intervene in financial markets. The newspaper reports that the European Commission plans to present its draft regulations on Sept. 23. The plans state that the financial oversight system would be built as a network. A European Systemic Risk Council would be created at the European Central Bank level to identify emerging dangers and serve as an early warning system for Europe's markets. And three new agencies are also planned for controlling banks, stock markets and insurance companies.
Banks would be monitored by a London-based European Banking Authority (EBA). Trade in securities will be controlled by a Paris-based European Security and Markets Authority (ESMA). And insurance and pension funds would be reviewed by a European Insurance and Occupational Pensions Authority (EIOPA) in Frankfurt. Under the plan, the new oversight authorities would be in operation by 2011, and they will be allowed to issue direct orders if they feel that national supervisory authorities aren't acting decisively enough when a financial institute, involved in cross-border business or which could threaten the stability of markets, runs into trouble. The authorities' right to issue directives, however, would be limited to measures "that have no impact on the financial responsibilities of the member states."
With this limitation, Brussels officials are adhering to a decision made by leaders of the EU member states. At a summit in June the German and British governments insisted that the decisions of the European financial supervisory authority not have direct influence on decision-making relating to national budgets. The proposed regulations also provide member states with the right to contest any decisions -- and either the EU finance ministers or the European Commission would give the final ruling in any dispute. The aim of the powerful new body is to identify problems and to take appropriate actions to prevent them from spiralling into a crisis like the recent recession, which was sparked by the crash of the subprime mortgage market and the spectacular collapse of investment bank Lehman Brothers.
Weak pound might not be enough to rescue UK economy
Sterling was meant help lift Britain out of recession, but with oil exports falling there are long-term concerns over the trade deficit. In theory it ought to be pretty simple. You are heading into a nasty recession. The markets, seeing this impending threat, pull their cash out of your country. Your currency falls, but this in turn encourages people to buy more of your (cheaper) goods; and encourages your own citizens to buy locally rather than sucking in goods from abroad. The end result is that, little-by-little, the economy starts to recover, and you pull your way out of economic misery.
That, at least, is the textbook explanation for how a currency depreciation helps a stricken economy bounce back to health. All else being equal, as economists like to say, the currency is the automatic mechanism which helps an economy recover. And if ever you were after some examples from economic history, you need look no further than the UK. Almost every major British recession has been accompanied by a sharp fall in the pound. It happened in the early 1990s, as Britain left the European Exchange Rate Mechanism and sterling slid; it happened in the 1930s when the UK left the Gold Standard. In both cases, economists believe that the devaluations helped Britain avoid far worse economic contractions than would have otherwise occurred. And so, when the pound started sliding lower against both the euro and the dollar around 18 months ago, history seemed poised to repeat itself. The pound is currently around 20pc weaker than at the start of the crisis, having clawed back some ground in recent months. However, despite hopes that this would boost Britain's exports, the evidence is rather less encouraging. Official trade data, published by the Office for National Statistics on Wednesday, showed that British exports have hardly recovered.
Indeed, the data showed that although the deficit had improved slightly in previous months, it actually widened in July from £2.37bn to £2.44bn. In previous months economists could explain away the continued disappointment from trade figures as being due to the fact that the world was in deep recession. In other words, cheap and attractive as Britain's goods have become, our main trading partners in Europe and the US have been too deep in recession to be able to stump up for them. But now that France, Germany and Japan are out of recession, with the US and other economies likely to follow soon thereafter, this excuse is wearing somewhat thin. Indeed, Malcolm Barr, economist at JP Morgan, said the impact of a weaker pound on sterling had been "disappointing" so far, with no convincing evidence that the pound was boosting trade at all. "It may be that you've just got to be patient and let [the depreciation] work its magic," he says. "If you look at the normal lags, it will be probably be later in the year that we get more convincing evidence that the UK's exports have been given more of a lift compared with other countries."
But patience can only do so much. Economists talk about the so-called j-curve effect, which means that the initial months after a depreciation are often paradoxically tough for an economy. As we saw in the past year, the weak pound has kept inflation higher, and so pushed up costs for businesses, so the benefits of depreciation have not yet fed through. Likewise, it takes time for manufacturers and consumers to react to changes in currency; they do so over a course of months rather than days or weeks. The upshot is that it often takes some time before the benefits of a devaluation feed through. However, experts at the Bank of England remain convinced that the fall in sterling has been one of the key invisible supports for the UK economy over the past year. They point to the fact that Britain's peak-to-trough fall in economic output still looks far less severe than that of Germany, which has been weighed down by the strength of the euro. They motion to car production statistics, which show that Britain's vehicle factories are starting to produce car after car which are then being shipped out to continental Europe.
Indeed, the Bank, which has a foreign exchange fund of its own in case of currency emergencies, has not ruled out intervention in the markets if necessary. It also views one of the prime successes of its Quantitative Easing programme is that it helped keep the pound lower than most of Britain's rivals throughout the crisis, without having to resort to outright currency level targeting. A more salient question that remains is whether the decade that preceded the crisis, during which the pound was extremely strong, saw the collapse of so many manufacturers that, in effect, there is little export industry left in the UK. Moreover, many of Britain's exports during that period consisted of financial and professional services. But it is facile to suggest Britain does not make anything. Countless overseas companies have chosen to base factories in the UK; this trend should only increase with a weak pound, as it did in the 1930s and the late 1990s.
A deeper long-term worry concerns the North Sea. The reason the trade figures dipped back into deeper deficit on Wednesday was that oil exports are declining faster than expected. For the past two decades, British exports, and hence prosperity, have been sustained higher than they would otherwise have been by North Sea oil. With this source of income running dry, the UK will either need to find a substitute, in terms of higher productivity, or to see its standard of living deteriorate. The weak pound may well help through this crisis. It cannot prevent this longer-term crunch.
European Commission sees galloping UK debt crisis
Britain's public debt will explode to 180pc of GDP within a decade unless future governments take drastic measures to restore fiscal probity, according to a confidential study by the European Commission. The projection is more than twice the level forecast by the UK Treasury, which expects the debt to peak at around 80pc before gradually falling as growth revives and tax revenues come back to life. What is shocking is that UK risks decoupling from the other major economies in Europe, vaulting past Germany, France and even Italy into a wholly different league. Ireland is in the worst shape, with debt projected to reach 200pc of GDP.
The report is being prepared for the October meeting of EU finance ministers in Göteborg, which will focus on the exit strategy from the economic crisis and the long-term sustainability of EU public finances. The figures are based on the assumption that the emergency fiscal support of the last year is withdrawn in an orderly way by 2011, but that there is no further retrenchment thereafter. "It is a no-policy-change scenario, not a prediction of what will happen," said one official. The Commission fears Britain will suffer lasting damage as result of the financial crisis and the bursting of the property bubble. Neither banking nor construction will recover quickly, relegating the country to a lower growth trajectory.
Brussels warned Britain before the onset of the crisis that public spending was out of hand, repeatedly reminding Gordon Brown that the credit boom was masking the true scale of the problem. The UK ran deficits of 3pc of GDP at the top of the cycle, while Spain was running a surplus of 2pc. Britain was the only major country to face the EU's excessive deficit procedure in 2007, even before recession played havoc with state finances. Stephen Lewis, chief strategist at Monument Securities, said that once public debt goes much above 100pc of GDP it becomes hard to reverse. "The debt snowballs because interest costs alone push up the deficit, so you can race up to 180pc very fast."
Attempts to bring the debt down by a spending squeeze can prove counter-productive because lack of growth itself drives the deficit higher. "Once you get there your trapped," he said. Britain's debt briefly touched 252pc of GDP after World War Two, but the circumstances were then entirely different. War-time spending could be slashed instantly and the demographic balance of young and old was still positive. Debt anywhere near 180pc of GDP today would test the UK Gilt market to destruction. While Japan is still able to fund an even higher level of debt without paying exorbitant rates, it is does not depend on foreigners to cover the bond auctions.
China says on track for 8% growth in 2009
China said Friday it was on track to achieve its target of eight percent economic growth in 2009 as a new flood of data suggested that massive stimulus spending was paying off. Investment on fixed assets in China's cities was steady in August but exports for the first eight months of the year fell more than 20 percent, indicating that government spending is now the main prop to growth. "The data from January to August has laid a good foundation for realising the eight percent economic growth target for the full year," Li Xiaochao, a spokesman for the National Bureau of Statistics (NBS), told a press conference. "So far, the main reason why the overall economy is stabilising and starting to recover is that we adopted the stimulus package to expand domestic demand."
Retail sales, the main measure of consumer spending, rose 15.4 percent in August compared with the same month last year, the government said. In July, the figure was up 15.2 percent from a year earlier. The consumer price index, the main gauge of inflation, fell 1.2 percent in August year-on-year, the NBS said in a statement. August's inflation figure was the seventh consecutive monthly decline, and compared with a 1.8 percent decrease in July. But Li sounded a note of caution, saying China has "a lot of work to do" to reach the eight percent growth threshold -- which is seen as vital to maintain job creation and thus stave off social unrest.
Growth in some industries was still slow, the official said, with China's export-driven economy suffering fallout from the global crisis. Before the crisis struck, the country had experienced double-digit annual growth from 2003 to 2007 and again in the first two quarters of last year. That had slowed to 6.1 percent in this year's first quarter, before a pickup to 7.9 percent in the second quarter. Last year, China unveiled a four-trillion-yuan (580-billion-dollar) stimulus package aimed at boosting domestic demand as exports plunged and economic growth slowed.
On Thursday, Premier Wen Jiabao said China's recovery momentum was "not yet stable" and that it was too soon to back away from the stimulus policies. Exports for the first eight months of 2009 stood at 730.7 billion dollars, down 22.2 percent year-on-year. But the monthly figures showed some improvement with August exports at 103.7 billion dollars, up 3.4 percent from July. China's trade surplus in August totalled 15.7 billion dollars, up from 10.6 billion dollars in July.
Industrial output expanded by 12.3 percent in August from a year earlier, compared with a 10.8 percent expansion in July. Electricity output rose for the third straight month as factories cranked up activity.
Investments in urban fixed assets rose 33 percent in the first eight months of the year, on a par with growth of 32.9 percent in the January-July period. Analysts said the numbers had beaten market expectations -- shares closed up 2.22 percent on the news -- but China was not yet out of the woods.
"I think that the data is stronger than expected but I would argue for caution, because activity collapsed this time last year and comparisons against last year will always be favourable," Ben Simpfendorfer, a Hong Kong-based economist at Royal Bank of Scotland, told AFP. "There was a worry that the fiscal stimulus was fading in the second half but the stable fixed asset investment data should ease those concerns," he said. UBS China economist Wang Tao said: "The trend is quite clear -- the underlying economy is improving and economic activity will continue to increase."
New loans rebounded in August to 410.4 billion yuan after falling to 355.9 billion yuan in July, as lenders continued to pump money into the economic recovery effort, and easing fears of tighter credit. "The solid bank lending is consistent with assurances from senior officials in recent weeks that they intend to keep policy accommodative in the near term," said Brian Jackson, a strategist at Royal Bank of Canada.
Bank of China’s Zhu Sees 'Bubbles' in Asset Markets
Bank of China Ltd., which led the nation’s $1.1 trillion lending spree in the first half, said ample liquidity has caused "bubbles" in stocks, commodities and real estate. "The potential risk is that a lot of liquidity goes to the asset market," Vice President Zhu Min said in an interview in Dalian today. "So you see asset bubbles in commodities, stocks and real estate, not only in China, but everywhere." China’s record credit expansion, which helped the country’s economy expand 7.9 percent in the second quarter, has raised concerns that bank loans have been diverted and used to buy stocks and real estate, fueling unsustainable gains in equity and property markets.
"There’s no way for the real economy to absorb so much liquidity," said Liu Yuhui, a Beijing-based economist at Chinese Academy of Social Science. "Policymakers in China and around the world are well aware of the harm that could do, but they are unwilling to sacrifice short-term growth and wean the economy from addiction to the stimulus policies." The Shanghai Stock Exchange Composite Index has gained 61 percent this year, compared with a 20 percent increase in the MSCI World Index of 1,659 companies. House prices in China’s 70 biggest cities rose at the fastest pace in 11 months on record lending and climbing confidence, according to a National Bureau of Statistics report today.
Bank of China advanced 1 trillion yuan of new loans in the first six months, more than any other Chinese lender and the gross domestic product of New Zealand. The Beijing-based bank, the nation’s third-largest, said last month it plans to slow credit growth in the rest of the year and improve loan quality. China’s Premier Wen Jiabao said today the nation "cannot and will not" pull back from policies designed to revive the world’s third-biggest economy. Stimulus measures have "yielded initial results and we have arrested the downturn in economic growth," Wen said in the keynote speech at the World Economic Forum in Dalian, a city in northeastern China.
China Construction Bank Corp., the nation’s second-largest, said last month it will cut new lending by 70 percent in the second half from six months earlier to avoid a surge in bad debt. Chairman Guo Shuqing said excess cash in the banking system has led to asset bubbles. An estimated 1.16 trillion yuan ($170 billion) of loans were invested in stocks in the first five months of this year, China Business news reported June 29, citing Wei Jianing, a deputy director at the Development and Research Center under the State Council.
The China Banking Regulatory Commission said on Sept. 3 it will implement stricter capital requirements for banks. Lenders were also required to raise reserves to 150 percent of their non-performing loans by the end of this year, up from 134.8 percent at the end of June. The Shanghai Composite Index fell into a so-called bear market last month on concern slowing lending growth and tighter capital requirements would derail a recovery in the world’s third-biggest economy. The gauge has bounced back this month, rising 9 percent.
New loans in July were less than a quarter of June’s level. August new-lending figures are scheduled to be released on Sept. 11 and may show a 10 percent decline to 320 billion yuan, according to the median estimate of nine analysts surveyed by Bloomberg. Loans surged in the first six months of this year after the central bank scrapped quotas limiting lending in November to support the government’s 4 trillion yuan stimulus package and key industries including petrochemicals, steel and automakers.
Zhang Xiaoqiang, vice chairman of National Development and Reform Commission, China’s top economic planning agency, said he sees "little bubbles" in the nation’s new energy sector and is looking into measure to curb excesses at an early stage to allow for healthy development for the industry. Crude oil prices have risen 62 percent this year, gold has gained 13 percent and copper has more than doubled.
223 comments:
1 – 200 of 223 Newer› Newest»Thank you for a powerful and moving post that gets right to the heart of the challenge we're facing. It's not about politics, it's about survival. Are we mature enough to set aside political dogma in order to save what's left of our crumbling society? I wish I was more optimistic about the answer to that question.
Kim closes by saying that: "A sound money backed by precious metals, can be the people’s liberation from this war."
This is an argument that keeps popping up from time to time, that if the money was backed with precious metals all would be fine.
What would doing this really change? Wouldn't it be possible to achieve much of the same increase in real money supply as we have had the last few years as derivatives wouldn't be backed by gold?
There were plenty of bubbles and busts with gold money. The problem is debt. You can promise to pay an infinite amount of gold. That debt, if believed, will cause the same problems we have now.
I cant see any way the current crop of pols will do anything except enrich themselves,and ensure the corporations rule continues.It will have to break to pieces before it can be rebuilt.
snuffy
and as we have used all those resource to make the banks well and the rich safe...there is nothing to rebuild with.
snuffy
If I did not know better I would think Mr. Kim had read a few TAE primers. Also, what a tragic picture, probably someone's son, brother or father, but even worse will be scenes similar to this of the many who have been and will be sacrificed for the "wealth" that seems to drive so many to do unthinkable acts for printed pieces of paper. John
Update ...
Progress report on Tim Geithner
1. Stabilize the banks
2. Stop the economic depression
3. Governments offer zero interest loans
4. Reform the financial system by getting rid of the systematic fault (compound interest)
5. Make banking a public utility
-----
Tim Geithner has saved the financial system from the Abyss and stabilized the banks.
He has Stopped the economic depression and has offered zero interest loans.
Point #4 and #5 are still to come.
What is he working on?
6. Resetting the economy to its new reality. (To a much lower credit system.)
7. Taking actions to lower the US dollar to increase exports. (Monetary easing)
As Canadians, we are well aware that a lower Canadian dollars is good for our exports.
Tim Geithner is aware of the advantages of a lower US dollar for their exports.
As the US dollar goes down, price of gold goes up, market go up, $C, goes up, $euro goes up, US imports go down, (to the chagrin of Canadians and China), US exports rise, US manufacturing increase,
8. Announce that Fannie & Freddy, (the US), are the biggest landlords in the US history.
jal
Obama is doing a talk blitz on the economy. First he will be on 60 Minutes then give a speech on Monday.
It seems a certainty he will be substantiating the status quo. Why turn back now? How to turn back now?
I'll make a WAG about the chance that what he says will quickly set off a chain of events that will be understood as a turning point of some kind and that the remarks will be widely seen as causal. 15%.
Tim Geithner has made it safe for the banks to sell AAAA rated tranches made from toxic assets, once again.
He gave the banks a shot of morphine, and has announced that this has cured the cancer.
When symptoms return, he'll shoot them up with morphine again, and reclaim his hero status.
Re Vendetta
That clip was unlistenable. I could not decipher the speech over the background "music".
(Wagner's ghost is responsible for ruining the motion picture format. At least with Wagner's own work the performers make certain you CAN hear what they are saying)
What did I miss?
Ilargi, I do not say this lightly. This is your best primer, EVER.
Obama is doing a talk blitz on the economy. First he will be on 60 Minutes then give a speech on Monday.
That should be good for about a 10%up move in the markets, the banking cartel has him bought and paid for, what ever he says isn't going to mean squat.
Re: The Fed and the Engineering of Market Rallies.
I'm thinking we'll see a pretty big rally Monday and Tuesday to commemorate the 1 year anniversary of Lehman Bros. We've recovered haven't we? Time to celebrate with a rally courtesy of the Federal Reserve.
If I (finally) understand how the Federal Reserve operates, then it seems that short-term rallies are incredibly easy to generate. The Fed creates $50 billion (a new liability on its balance sheet) and then buys $50 billion mortgage-backed-securities (MBS) from Citibank -- with the implicit understanding that Citi will immediately put that money to work propping-up the equity markets. Of course, those MBS on the Fed's balance sheet aren't worth anything approaching $50 billion. The Fed doesn't care about absorbing this loss because the taxpayer will ultimately be on the hook to re-balance the Fed's books. So, at the end of the day, the taxpayer gets a rally, and the responsibility to bailout the Fed for the loss the Fed absorbed to create the rally. In my opinion, this whole scheme sounds like running in place, or worse when you consider the fees, bonuses and commissions that were pocketed in the course of those transactions.
Am I on the right track here with my interpretation? Please correct me if I've missed something.
tob - "This is an argument that keeps popping up from time to time, that if the money was backed with precious metals all would be fine."
Of course at this point you are right, a metal standard (nor anything else) would fix the criminal predicament we are now in. Nor, does a gold standard prevent typical market swings.
Just from a layman's standpoint though, I do think having a stable, down-to-earth gold based currency makes sense in any reasonable economic environment. It has a better track record historically than fiat $$.
At this point it is just about a moot point though regarding our fix.
Well, Mr Kim is calling the end of the rally (soon)...
Time to sell all of our securities?
Are any immune- Big Oil, lithium, wind power?
Does STONELEIGH wish to weigh in on this??
There is a commercial that declares, "We make money the old-fashioned way..." Well, the old-fashioned way is to steal it. The American corporate ethic has become a form of cannibalism. Politicians cry when they have to prevent Americans from starving to death by begrudgingly granting them "entitlements," but they vehemently defend billion-dollar hand-outs to American corporations. Arguments erupt over the difference between "private" versus "public" property, and the specter of Socialism raises its ugly head, all in a display of manipulation that is nothing short of masterful.
After all, a society that has more justice is a society that needs less charity. And there is no justice in a nation that rewards the criminal elite as we do.
As Aesop stated, "We hang the petty thieves and appoint the great ones to public office".
http://tinyurl.com/n8l3s4
Like everybody, Mr. Kim expresses a lot of gray about the end of the rally. He says it could be soon, or that the game could continue for some time.
Everybody agrees this will end badly. Nobody seems to know when (next month? next 3 months? next 6 months?).
It seems to me that the rally can continue for as long as the Fed can credibly promise, to other central banks, the wealth of American taxpayers. International central banks will only deal with the Fed if its balance sheet is sound, and that will require the taxpayers' money.
So, the game can continue for as long as the taxpayer has wealth to contribute. To know when it ends, we need to answer two questions:
1) How much wealth do American taxpayers possess?
2) At what rate is Fed absorbing losses on its loans and asset purchases?
Time until game-over = taxpayer wealth divided by rate of loss on the Fed's "investments."
Nader's quote from article linked by Anon. at 5:29:
"Ralph Nader said it best when he stated;” the only difference between the Republican and Democratic parties is the velocities with which their knees hit the floor when corporations knock on their door. That's the only difference“."
So true!
Ilargi said:
"And no, you won't feel just as happy about your life, and that of your families, if and when on your way to work you’re forced to pass by children starving by the side of the road while clasping a shotgun in your lap. A functioning society, whatever political label you might prefer to stick on it, is possible only when its members manage to suppress the temptation to take so much for themselves that too little to survive is left for their neighbors."
And extrapolating on that: I fear that those Americans arming themselves and currently buying an exorbitant quantity of ammunition will end up attacking the innocent, their neighbors, their kin, the weak, and the hungry, not the mercenary armies (e.g. Blackwater USA) patrolling the streets with more sophisticated surveillance technology and weaponry than the "survivalists."
Ilargi, thanks for the great intro once again.
Ahimsa and Ilargi - You make some good points to keep in mind regarding self defense preparations and keeping things in a humane perspective.
I think individual circumstances will, as always, determine the course of action each of us may feel it necessary to take. It is my fondest hope that we will somehow get through the next decade without extensive violence.
I separate my sincere hopes though from my real world preparations.
RE:
And extrapolating on that: I fear that those Americans arming themselves and currently buying an exorbitant quantity of ammunition will end up attacking the innocent, their neighbors, their kin, the weak, and the hungry, not the mercenary armies (e.g. Blackwater USA) patrolling the streets with more sophisticated surveillance technology and weaponry than the "survivalists."
I often extrapolate to that but maintain a reserve of faith in the American people. The fact is the many of the most enraged Teabaggers, neck veins popping, shouting invective, quite likely would stop on the side of the road for almost anyone in distress and offer to help.
No doubt there is a hardcore with a deep blood lust but for many it is that their emotions are being well manipulated but it only actualizes publicly in overtly political settings.
Political groupings and gatherings, even this one to some degree, arise out of a widespread human desire to be part of some greater group whose aims are just and right. Many people revel in responding to physical disaster and crisis by helping others. Of course there are the stories out of New Orleans of racial murder and people turned back at escape routes. Natural disaster is different than the possible disaster we face because no matter how sudden it is it will unfold much more slowly than a few hours.
Still I feel the dread of jack booted authoritarianism and Mad Max world gang violence is less likely than our nightmares see.
I've already seen life from the prism of poverty and I don't find it particularly helpful to dread the sunrise -whatever it may bring.
So, it's easy to recognize fraud, but there is so much out there that is authentic...
go spend some time serving meals at community centers, schools and soup kitchens --->look & listen.
I've personally been noticing surplus food grown in local gardens set out for the passerby to share while the food pantries drop off goods at local second hand stores. Little ideas like these spread as fast as market fears or rumors do.
Mr. Kim was not calling for a specific end to this rally. His observation is that the rally is built upon fraud and therefore must eventually fail. He even points out that he's been premature in the past but correct in the overall trend.
My advice is that you should not trade on Mr. Kim's statements, nor on those of I&S who have also made it clear that calling a top or bottom is very hard when you are dealing with fraud on this scale coupled with the human mind's willingness to believe. Of course, I've been out of this market for over a year and won't get back in until I see some sign that we're going to have real transparency and real enforcement against fraud.
Stoneleigh how long do you see this depression lasting in total?
S&P 500 May Jump to 1,250 by Year-End, Biggs Says
http://www.bloomberg.com/apps/news?pid=20601110&sid=aEzImyehQYWo
levitating a dead body.
I asks: "We are here, 25 years after 1984 has passed, and 61 years after George Orwell wrote his book by that name. If he could see us now, do you think he would he feel vindicated for being so right, or instead desperate that we have walked into the trap..."
1984 has grown in my mind over the years as the best evocation and summation I know of our time. He understood the relation (and similarity) between human nature and technology better than most. I haven't read 1984 since my 20's, but whenever I try to make sense of today's social movements, Winston's life and Orwell's piercing prose returns to haunt me, as though I'd read the book yesterday.
There are many other books I prefer far more, though, than 1984--books that delve more compellingly and completely into human nature. But Orwell put his finger on how technology turns people into parts of a machine that is then controlled by media. I don't know Orwell well enough to guess whether he'd be vindicated or become desperate by today's events, but personally I'm heart-broken.
Observing large social movements is a little like peering through a neighbor's window--if I read blogs and articles about current events too long I can fall into a voyeuristic trance and stop seeing what is important. Wild Gypsy says it well: ...it's easy to recognize fraud, but there is so much out there that is authentic... While it's useful to know what the herd is doing, we can't expect to find value there.
Blogger Chaos said...
@ Dr. J re: North Korea
This is the trouble I have with predictions of mass unrest. Even Tainter observes that, historically, peasants don't revolt. They may become passive, and non-supportive of the current regime, but they rarely riot. Frankly, I think a lot of the speculation here and other places about a major watershed moment among the populace are overblown and dramatic.
September 11, 2009 1:56 PM
Absolute truth.
As I have stated here before, the vast majority of Americans fall into one of two camps -- the Complacent and the Defeated.
The Complacent are simply content with things as they are, and the Defeated are too vanquished to do anything else but attempt to survive.
This scurrilous talk of pitchforks and the masses arising to reclaim their Constitution, and Government, to return to their pure state . . .
. . . is just so much whimsical balderdash spinning in the wind.
David - "This scurrilous talk of pitchforks and the masses arising to reclaim their Constitution, and Government, to return to their pure state . . .
. . . is just so much whimsical balderdash spinning in the wind.
An interesting statement.
One thing that I go over in my mind repeatedly is... if I was free to act... what to do? It seems that the predicament we are in, real as it is, is not focused on a single "enemy" to be confronted. Nor even in a particular locality or venue.
Let's say there were hundreds, thousands who were ready (and able) to act. To do what? To go where and under what auspices?
I think Ilargi and I are on the same wavelength today ...
http://www.dailykos.com/story/2009/9/10/780190/-Greenroots:-Redefining-The-American-Dream
Wall Street’s New Gilded Age
A year after the crash, a few financial giants are back to making millions, while average Americans face foreclosure and unemployment. What's wrong with this picture?
http://www.newsweek.com/id/215178
Rapier,
In my heart of hearts I dream the inate goodness in our collective hearts will spare us the indignity of life in a "jackboot Amerika".Mad Max should remain a video dream What other posters have rightfully pointed out,is that is the America of my childhood...is gone.
And Orwells nightmare,on so many levels,has evolved far past the original.Its stronger,smarter,and has become the boot on the face of mankind,as predicted.Corporate power now rules absolutely.If anyone want to argue that I suggest you look at a history of the bailout...How much did the anger expressed by the public change things?They only did the rape of the treasury more "quietly"...
There is hope,but I don't know if I will see the end of the story.Life is going to become more difficult soon.This is the key..
David believes revolt is "balderdash".
I believe it is inevitable.
One of the wonderful things about the net is that you can get a thousand viewpoints from people whom you would normally never discuss so much as the weather from.I find myself constantly enjoying insights to the world we are in from people who I would normally never interact.
But what dismays me more than I can say is folks who are wearing blinders to whats happening to a large segment of the population,and believe the control system that has evolve to deal with radicalization....the enrage....damaged....hurt victims of this deliberate destruction of the middle class,will "work" as designed.
Our society is on the edge now.We are close...not there yet,but close,to a overwhelming phase-change.Those in power will seek to retain their position...they always try.But it can be the start of the first mature modern ,eco-civilization,or devolve into a orgy of bloodletting that would make the french revolution look like a tea party.Or go any one of a thousand variations
David,you speak as one who has never hear construction workers at their lunch speak quietly of the days events[the bailout]and hear a few whispers of barely contained rage by men who spent way too long in nam,or Iraq.
Or heard a soldier,fresh back from "the sand box"matter-of-factly discuss the rage felt by the enlisted ones over being called "security risks"
or wondered at the astroturf teabagger's...just where will that group,well funded and stoked,aim their attacks at?.Students of the histories of nations know that revolutions eat their children.Those funding such activities should remember that.
snuffy
Hot Hunan Stir-Fried Field Mouse
excerpts:
Elantu Veovode pages 214-219
..."I'm not talking about rats. Field mice are vegetarians and their meat is tender and sweet. If they were easier to clean and dress, more people would take advantage of this tasty treat"....
..."(use live traps because) they spoil pretty fast"...
20 to 30 field mice dressed
1/4 cup peanut oil
3 to 4 cloves minced garlic
1/2 inch piece fresh ginger
1/4 cup hunan sauce
1 diced onion
4 to 5 carrots "match-sticked"
1 cup trimmed green beans
nuts
baby corn
water chestnuts
soy sauce
Plenty more where that came from. Please check it out before it's too late. (My staff is heavily overworked and may take some time to clear the backlog, please be patient.)
@Iowa Boy
"The production of synthetic investment vehicles sucked all of the oxygen out of the room during the first decade of the 21st century."
Yes, then comes the backdraft when the air rushes back in and the place explodes.
DEATH - you are not too far off the mark. A colleague of mine is doing diet research on mice. One of his incidental findings is that they are loaded with omega-3. He says this is why cats like them so much - they are like tuna from the land.
"levitating a dead body."
http://quotes.ino.com/chart/?s=NYBOT_DX.Z09.E&v=d12
And letting a dead body sink, until it floats to the surface.
This essay echoes the last time we had such a stark choice.
In this replay, Obama is clearly in the Hoover role. Yes the next prez could be a Mussolini ....OTOH, could be an FDR.
Was FDR really a 'traitor to his class' [right wingwurlitzer view circa 1930's] or did he actually 'save Capitalism from itself'.
Similarly on the health care "debate":
Which Republican will pull a rabbit out of the hat for the public option, stealing thunder from the ever wimpy Democrats?
"...Where have you gone, [Wilbur Mills]? A nation turns its lonely eyes to you... Buhuhu..."
-gylangirl
@Ed_Gorey said...
"Like everybody, Mr. Kim expresses a lot of gray about the end of the rally. He says it could be soon, or that the game could continue for some time."
I think Mr Kim, while not being specific, pointed out that the Banking Mafia & their government lackey running lap dogs could only continue their manipulation of the securities markets if the trading volumes stayed low.
That's the key word here, low.
And he clearly stated that remains to be seen in September and October.
Trading volume is much easier to manipulate when it is a trickle as opposed to a torrent.
The trading volume, especially this summer, has been pitifully low, allowing the Banking Mafia et al to only have to toss a relatively small amount of TARP-like failout funds into the mix to fakeout the Sheeple People 'investors', if we can call them that.
I am watching the trading volume carefully as a leading indicator of a crash.
That and of course a thermonuclear war starting in the Middle East following on the heels of a global flu pandemic.
They are much easier to spot indicators.
The cause of the current and unprecedented financial crisis in Canada (and in most of the rest of the world) is debt, debt, and more debt. I think Liberal Prime Minister Pierre Trudeau got the ball rolling on our “empire of debt” in Canada, (to borrow a phrase from Bill Bonner)
“When Pierre Trudeau took power in 1968 he was handed a net debt-load of $19 billion. By the time he left office in 1984, the net debt stood at $172 billion.
Even though his successor, Brian Mulroney, ran operating surpluses for most of his time as prime minister, the interest payments on the Trudeau debt were so enormous ($20 billion in 1984, climbing as high as $45 billion in 1991) the federal government continued to be dragged into the red every year. By 1993, the net federal debt stood at $487 billion.
In recent years, the government began to keep track of physical assets (bridges, buildings, roads and submarines) and then subtracts these assets from the net debt. After deducting out the value of physical assets, Mulroney passed on a federal debt of $449 billion.
Under Jean Chretien, the federal debt peaked at $563 billion in 1996-97 and a 10-year stretch of surpluses allowed the federal government to reduce it to $458 billion by the end of 2007-08.
There has been great fanfare over the amount of debt that has been paid down in the last decade. Reducing the federal debt by $105 billion is indeed an accomplishment.
However, the government never issues press releases proudly proclaiming how much money it has spent on debt service charges over this same period. That number is $421 billion. Going back to 1984 is even more sobering: since that time the federal government has spent $942 billion in interest payments to service its behemoth debt.
Last year alone, debt service charges consumed $33 billion in government revenues –two times the total amount collected in employment insurance premiums last year. Put another way, if there were no debt and no interest payments the government could cut personal income taxes by 30 per cent across the board.”
Deficit spending is a hard habit to break
Of course now they're talking about a new drug-resistant strain of H1N1 in the Carolinas due to premature prescribing of Tamiflu to the healthy.
Ilargi,
I want to say thank you for a post that really made my heart hurt. The very core of what is wrong you captured in crystal clarity. Everywhere I look I see fake data, fake sentiment, and fake confidence. I would wonder why so many choose, and it is a choice, to be unaware.
Anyways, great post. Thanks for your efforts.
Yummy
Hot Hunan Stir-Fried Field Mouse
excerpts:
Elantu Veovode pages 214-219
Reminds me of the movie "King Rat"
Synopsis:
James Clavell incorporated a few of his own experiences as a British POW in his novel King Rat. Bryan Forbes' film version stars George Segal as the mastermind of all black market operations in a Japanese prison camp. He is called "King Rat" because of his breeding of rodents to serve as food for his emaciated fellow prisoners; the nickname also alludes to Segal's shifty personality. British officer James Fox helps Segal expand his operation to include trading with the Japanese officers.
"Six million children under the age of 5 die every year as a result of hunger." -care.org
"Afer the fall there will be no more countries, no currencies at all. We're gonna live on our own wits, we're gonna throw away survival kits, trade butterfly knives for Adderall--and that's not all. Oh, oh there will be snacks." - andrew bird
Water always finds its level.
And so, it must be. That way. And it is. Now. For you and for me. As it should be. That way. We may. Resist it. For who wouldn't? When we have it so easy. Or so. It seems. To be easy. But it is not. Just ask my sons. No, it is not easy.
snuffy said...
David believes revolt is "balderdash".
I believe it is inevitable.
Snuffy,
I love 98% of what you write here, but I believe we have to agree to disagree on this one.
America has come a long way from the spirit that gave us the Revolution, the certainty of culture that brought our country into the Civil War, the spine that got our people committed in World Wars I and II.
You may speak of those whom you encounter on a regular basis that demonstrate a spirit of rancor towards our corporate/government masters. However, sad to say, these people are in the overwhelming minority . . . the vast majority of Americans are complacent or fearful (or both) and have not the spine of their forefathers and foremothers to actually rise up an challenge the authorities.
Why should they? They have been schooled from day one to not rock the boat, to take the path of least resistance . . . to go to the right school, marry the right spouse, take the right corporate job, buy the right house in the right neighborhood with the right schools . . . and collect the paycheck and watch TV and buy TV clothes, cars, food, and all the TV accouterments of life.
And when threatened with the loss of any of the above, will do whatever it takes to hold on tooth-and-nail to keep the American Dream alive.
The overwhelming majority of the US citizenry would no sooner take up pitchforks to throw out the smooth-talking leaders and their MSM enablers, than they would take the remote and smash it into their precious 42" wide-screen LCD television.
But they will watch with gleeful fascination as the jack-booted government thugs stomp the hell out of those few with the pitchforks who think they stand a chance of leading the couch-potatoes forward.
Blogger Chaos said...
This is the trouble I have with predictions of mass unrest. Even Tainter observes that, historically, peasants don't revolt. They may become passive, and non-supportive of the current regime, but they rarely riot. Frankly, I think a lot of the speculation here and other places about a major watershed moment among the populace are overblown and dramatic.
TRUTH
Read it and weep.
V for Vendatta...damn good film!!
I have to agree with David and Chaos. A brainwashed, materialistic and hedonistic society (vast majority of US populace) will always identify and side with the powerful.
"Frankly, I think a lot of the speculation here and other places about a major watershed moment among the populace are overblown and dramatic."
Enough of them haven't lost enough yet, it'll be interesting when they do. A sample from my neck of the woods is most really don't have a clue. Some are young most still have jobs and don't even know what a bailout is let alone how our monetary system works, some are boomer's and while pissed about the bailouts they are still working and the stock market is going up, some are farmers and know that they have gotten screwed but the farm subside check is still being cashed, and a lot are retired and the SS check is still coming in, then there is the disabled Vietnam vet who hates the us government with a passion.
Freedoms just another word for nothing left to lose. They haven't lost enough yet.
Janis Joplin me and bobby mc gee
http://www.youtube.com/watch?v=5FMhnl0__Vo
Things are getting very ugly. On KD today his rant has a reference to these two tapes which show ACORN staff counseling a young couple posing as a prostitute and pimp how to set themselves up in a house with underage girls from El Salvador:
http://www.youtube.com/watch?v=z7Swdc4uZkc
http://www.youtube.com/watch?v=Mzi0TiwduZ0
It's unclear who is behind this but it is clearly going to be used to smear Obama. It looks to me like the gloves are really coming off.
I'm surprised i haven't seen anything about this in the MSM yet or here, for that matter.
Dave,
Those boyos with the jackboots are part of the control system that I referred to.Effective resistance to those types have already been developed by the 5th gen.guerrilla type movements that have so effectively paralyzed modern industrial societies.As I said,the time is not now.
You paint a bleak picture of American citizens.I know the type of people of which you speak.Mostly corporado type,willing to stab hack or claw their way to the top of what ever heap they are attached to.They are the exception,not the rule,If those type are all you know of,you need to get out more Dave....
I think when you start to see those same "well schooled"types notice that they are not part of the "cool kids"anymore..they arent trust fund babies...nor were they born in the right bed...when they have "The Epiphany"that after all they are "STAFF"not freinds or family...When they see their families hurt..and nowhere to turn
When the hope of a better life is gone...losing you life is not hard..especially if your doing it in such a fashion as to raised the bloodpressure of those you have come to hate.The hate isnt there ..yet...
Your experience ,and backround are way different that mine,but I think I know they heart and brain and guts of the techs and working folks that keep everything operating,and of the farm folk,they old school country types,and others that are the fabric of my life experience here in Oregon...
When these people understand the true depth of the fraud that has been played on them.
When they see their families and friends and brothers and sisters in the street or living in the wet woods.
When they see their children hungry,and sick and having the future that they though was only what they read in magazines about life in the third world.
When they know its time.
Keep your head down.
snuffy
@ Snuffy, You made reference to the '60's recently...I eventually found my way to class at the university the other day and was complaining about the building design to a fellow study waiting in the hallway with me. Oh she said, the building was intentionally designed to separate offices from all wings of the building as TPTB feared student
riots. I spoke a bit to her about the '60's being my time, what it was like. Then I told her she should be protesting/rioting now! She quietly said, " I know".
A young man eavesdropping on our conversation edged closer. He knows too.
Coy Ote,
what to do indeed...
Ever seen "Fight Club?"
Now of course I'd never suggest that violent acts such as those depicted in that film are justifiable - I only bring it up because now we have the possibility to achieve something similar to the climactic act in the film without criminal acts or physical violence.
Others have suggested pulling out of The System wherever possible - cutting consumption, upping savings, $tuffing the mattre$$, engaging in barter, even growing veggies can be a revolutionary act.
A friend of mine once said that a true revolutionary doesn't need an organization - s/he will know what to do when it's time to do it. The question is, will we display the courage of our convictions and act decisively when the moment arrives?
Personally, these past eighteen months have been terrific training, selling out of commodities and shorting the markets last Spring, and now once again massively shorting.... I'm learning, slowly, to wrench my mind free of the herd and go the way that makes sense. It's not about making money - it's about making sense of a world gone mad, like a crazed animal trying to devour itself to fend off starvation. This is only the opening act of catabolic collapse.
It's nothing less than terrifying. Tally ho!
Great intro Illagi; hit my heart so I've reciprocated with a hit on your tip jar.
They can lie, cheat and cook the books all they want.It eventually catches up, as it did today with 3 Banks, including a good sized one, the fourth largest this year (costing the FDIC about $2 Billion).
Corus Seized in Fourth-Largest Bank Failure This Year
I'm not sure if this stuff interests people here, but here's a glimpse into how quickly a bank can go bad:
Anatomy of a bank failure
BFF
Well, I still can't sell the condo, can't seem to rent it either. Financing is the problem with the former, too many options for potential tenants(at the price point that makes it worthwhile to rent) is the problem with the latter. Can't really afford to make another payment. Well to be fairer I won't afford another one, it is cheaper to let the bank take it. I think I would be more likely to reap a positive return on my money by shorting the S&P than holding out longer hoping for a sale. Word is the Saint Louis real estate scene, especially the condo market, is very illiquid to phrase it politely. I have been in Oregon for the last few months wrapping up my affairs, closing the business and preparing the bankruptcy. It will be a relief to be done with it all and to apply those lessons learned. We started September with earnest preparations for the next business. No debt, primarily cash and trade, as low overhead as humanly possible. I took great joy in removing the visa/mastercard accepted window stickers from the front glass of the new office. They will not be accepted, though the towns local script will.
It is interesting to think about Snuffy and Dave et al's discussion on the level of rage and discontent and the resultant potential for violence. I think it is important to remember we all only see a tiny slice of that which we call America. There is a huge difference between MO and OR. It is not so much an economic difference as a cultural difference. As much as I never felt comfortable in MO I do feel comfortable here, so I find amazement and chagrin when I see on paper how similar the two places are. I think rebellion is far more likely here in cascadia than back in the show me state. I think the rural areas of MO might be willing to fight, but they would not know who to fight, and in the end might be as likely to unintentionally act as enforcement for the forces they desire to defeat, while the cities would alternate fighting between the races and passively waiting for work and instruction. It is a very paternalistic top down sort of place. OR does not seem that way. I don't notice the same degree of segregation by race, money or creed (though to be fare, this place is pretty much lily white). I also see less party line and contradictorily more discussion. The place it reminds me most of is New Zealand. Maybe it is the lack of polish in the local broadcasting or the limited news pipe of my new surroundings. Whatever it is, I think as one poster said characterizing the typical peasant rebellion, there would be less insurrection and instead more of an active dropping out, a not contributing to the beast first, and only if the action was punished then violent action. In the end that is what any kind of rebellion will need to be, a redirection of money not a bunch of neighbors taking over the radio station.
That said I would not take a wager with Starcade, my time in CA esp SoCal impressed me as a powder keg just looking for a spark. And those are just geographical variations. Throw in bifurcation on income or education and you have completely different response sets to the same stimuli.
Interesting times...
Where to begin?? Re: snuffy v. David et. al. - they're both right. While there is a large group of people who "get it", I think David is right concerning the current attitude of the majority of Americans. But revolution is inevitible, just like the collapse of the fraudulent fractional reserve fiat "money" system. Look at history - nothing survives forever. Once all the "accoutrements" have vanished or been taken away, then people will have "nothing left to lose" and demand REAL change (with pitchforks). (or guns in actaulity). The real issue is the timeframe....could be days, months, years, decades, or even centuries, but as snuffy says, it is inevitible.
The other issue that I can't help thinking as I read comments from a largely educated community, is why all the conversation about market moves and/or "making money"?!? If we all know the "system" is fake/fraudulent/gamed/whatever, then GET OUT!!! Take your gains and/or losses and get out of the system. That is what will give you power over the elites. Don't play their game. Get cash, or better yet PMs - gold/silver, or even better (in addition) REAL assets....storable foods, metals, tools, guns/ammo....anything with real value that you can use or barter. Who needs "their" money!! Just say no!
Of course this is for the "rich" folks on the board....of course the "poor" folks should do the same - getbout of debt! Forget all the talk of shorting or timing, just take your ball and go home.
David and Blogger whoever:
You have to, then, presume that most people will just wither up and die when they have nothing left to lose.
So who ARE you shilling for?
Starcade, now from Leviathan said...
David and Blogger whoever:
You have to, then, presume that most people will just wither up and die when they have nothing left to lose.
So who ARE you shilling for?
Starcade,
Not everyone here who has a different perspective from yours is "shilling" for somebody else.
Some of us are actually expressing our own viewpoints that have come from personal thought and reflection . . . not simply regurgitating someone else's dogma.
Sorry to disappoint you, there's no man behind the curtain when I enunciate my point of view.
For those having difficulty with v's speach, here is my effort at transcription.
Good evening London.
Allow me first to apologize for this interruption.
I do, like many of you, appreciate the comforts of everyday routine, the security of the familiar and tranquility of repitition.
I enjoy them as much as any bloke, but in the spirit of commemoration, whereby those important events of the past, usually associated with someones death or the end of some aweful bloody struggle, are celebrated with a nice holiday, I thought we could mark this November the fifth, a day that is sadly no longer remembered, by taking some time out of our daily lives to sit down and have a little chat.
There are, of course, those who do not want us to speak. I expect even now orders are being shouted into telephones, and men with guns will soon be on their way.
Why?
Because while the truncheon may be used in lieu of conversation, words will always retain their power. Words offer the means to meaning, and for those who will listen, the ennunciation of truth; and the truth is there is something wrong with this countries theft, cruelty and injustice, intolerance, depression; and where once you had the freedom to object, to think and speak as you saw fit, you now have sensors and systems of survielence; coercing your conformity and servesting your submission.
How did this happen?
Who's to blame?
Well certainly their are those that are more responsible than others - they will be held accountable, but again, truth be told, if you're looking for the guilty, you need look only look into a mirror.
I know why you did it, I know you were afraid, who wouldn't be: war, terror, disease - there were a myriad of problem that conspired. Fear got the best of you, and in your panic you turned to the now high chancellor, Adam Subtler. He promised you order, he promised you peace, and all he demanded in return was your your silent, obedient consent.
Last night I sought to end that silence. Last night I destroyed The Old Bailey to remind this country of what it has forgotten. More than four hundred years ago a geat citizen wished to invent the fifth of November in our memory. His hope was to remind the world that fairness, justice and freedom are more than words; they are perspectives. So if you've seen nothing, if the crimes of this government remain unknown to you, then, I would suggest that you allow the fifth of November to pass unmarked. But if you see what I see, if you feel as I feel, and if you would seek as I seek, then I ask you to stand beside me, one year from tonight, outside the gates of parliament and together we shall give them a fifth of November that shall never, ever be forgotten.
Greatmovie, worth a look
@ Glennfeff, thanks for the transcript of the Vendetta speech. I couldn't make out the audio either.
I've been spewing about spin language, specifically " Jobless Recovery" Summers is saying unemployment will be with us for years...Jeez, not like we aren't being told the lay of the land!
I am not hearing any public conversations about what a recovery without jobs looks like, feels like in daily living.
There are language wizards at work. Simple,powerful wizardry like when the human brain hears " Jobless Recovery " it mutes jobless and retains recovery. Its as if the adjective becomes impotent. And after all we have been well programmed to accept recovery as the goal. We have achieved our goal! Hurrah! The pesky detail of unemployment was not featured within the frame. I find new meaning in the phrase, " The Devil is in the details."
Australia
=========
Glennjeff,
The credit card companies are doubling my credit card limits, no request, no paperwork. Get real doods, I'm paying them down as fast as I can.
VK
How people can afford to buy houses with a median home price to median income ratio of 8 is truly mind boggling.
Lone Ranger,
I remember looking at 5 acre blocks 50km from the CBD for 50-60k back in 2000 that now sell for 300+k. This insane belief is like a religion in this country.
Take a look at this article about a report by Dun & Bradstreet - Melbourne 'most financially vulnerable city'
Forty per cent of surveyed Victorian households said they would be relying on credit to pay upcoming household bills and 37 per cent said they would only have enough money to last a month if they lost their jobs.
BTW, I worked for some years for Dun & Bradstreet when they were a much larger company that included AC Nielsen (tv rating) and Moody's. I am familiar with what they do and how they do it.
I am moving to Melbourne my family at the end of this month.
Fortunately, we are liquid and have never had any debts - I have always been allergic to the debt culture.
I expect we shall be witnesses to an economic catastrophe over there.
I well remember reading about the massive scandals that they had in Australia in the 1970's and interviews with elderly people who had lost their life-savings - they were shockingly relaxed about it. I wonder if it will be the same this time.
anonymous @ 12:09 said: "A sample from my neck of the woods is most really don't have a clue."
Same with me.
Ilargi - great intro, thanks for how you put all this together for us.
BTW - last week there was a good discussion about solar battery chargers. Does anyone have a preference about solar ovens?
"..Consumer Credit Collapse
Hoping for a consumer-led recovery?
Don't hold your breath. The latest data from the Federal Reserve shows that the year-over-year decline in total consumer credit is collapsing at an accelerating rate.
God forbid consumers go back to living within their means..."
Reminds me of Bush Baby being asked what the average citizen can do for the 'war on terra' and he mumbled out some dumdass line about 'just keep shopping'.
The apparent non sequitur was not a faux pas but actually the truth of the matter at the time.
He knew the Scam needed massive consumer debt.
The 'terra' baloney was just a shabby cover up for the Grand Thief Auto about to unfold.
He's recorded on camera spilling the beans years before the financial press ever even dropped a hint about it to the Sheeple People Proles.
"Does anyone have a preference about solar ovens?"
Get the one with the electric backup built in. Days with mixed sun and clouds give erratic results. Especially if the oven is semi-attended to. The amount of supplemental electric power is minimal.
Coy Ote,
didn't I see some months past that you're in IN? Much to my surprise, I find myself decamped here in Muncie for (?) a few months....if you know of any local, face to face, gatherings of like-minded people, feel free to get in contact: pdarwinjones@hotmail.com
There are many other books I prefer far more, though, than 1984--books that delve more compellingly and completely into human nature.
Time maybe for a revival of "Death of a Salesman"? I much prefer 1984 but Millers book's realism might relate to what many people must be feeling about their situations. Of course I wouldn't consider it a good read unless one has secure job and a full fridge in excellent working order.
-Biff-
Re.: Progress report on Tim Geithner
Those who listened to Obama on health care ...
He said, (paraphase), we are going to make the changes that we can ... We Cannot Change to a Canadian kind of health system.
As far as changes in the financial system ... the regulars of this blog, all know that the same constraints apply.
... making the changes that they can ...
Every incremental change will be sufficient to buy more time before a major change must be done.
A major change will be equivalent to TSHTF, (the shit hitting the fan), for those elite that will be affected and they will funnel the anger of the masses to a target, (revolution, revolt, upheaval ).
Its too late to be reading books about an idealistic futuristic social order.
Take the time and the opportunity to prepare for the future.
It harvest time ... lots of variety of potatoes to dig up. This year ... the surplus will go to the food bank.
jal
Thousands of dollars an hour dispensing financial advice to the Wall Street wannabees not fortunate to be in on the inside money grab and beating a morally outraged chest as you do it--what a beautiful dilemma.
Well, somebody has to do the heaving typing making sure those dirty deeds from those really extra extra greedy bastards from the super upper echelons of Wall Street do not go unnoticed.
And I’m sure if there were only more hours in the day somebody other than the super-wealthy might benefit from advice that is billed out at thousands of dollars an hour. But hey, it’s a jungle out there, and 24 grand a day is not what it used to be.
The hypocritical beat of the Wall Street ethos keeps on getting drummed, even if the outraged permutations claim they are not just a counterpoint in that same old musical score.
But what a wonderful irony it is--like a Conquistador in a confessional booth.
Aesthete
Nassim,
I am only 30'ish years old but remember looking on at Alan Bond and Richard Holmes a Court battle it out for top dog in Perth in the 1980's as a child. Court passed on in 1990 and his empire remains but Bondy went down in flames and ended up doing some "time". Those were the days...
Australia saw a decent recession in the early 90's with interest rates going into the high teens. My dad was paying 20%pa on a farm loan. As a kid I remember those were lean years, but it all turned out okay through lots of hard work.
Due to the purge back in the early 1990's and lack of tech sector we probably dodged the early 2000's US recession but ended up building an even more colossus bubble. In 2000 Australia was labeled a "backwater quarry".
However my contention throughout the resources boom this decade has been that the excessive domestic debt and consumption bubble far outweighs our resource income. The proof is in our trade deficit. If Australia exported so much, why don't we have a trade surplus? Without all our resource exports what would our real economic position be, a banana republic? That is no joke as our ex PM Paul Keating muttered that remark back in 1986 sending the Aussie dollar into the tank. Our government has been sensible but there is more private debt per person in Australia than in the US. When our snow ball starts rolling it will be hard to stop. We have 18 years of excess with no purge. We also have full recourse mortgage loans. Once you default they take you for all you have. It is totally insane and I can't understand how the average person cannot see what is coming. Like I said it's like a religion.
Lone Ranger
Written 8/22/09, reposted in light of Mr. Kim's essay.
The world economy is teetering, that is very clear to all. The important thing for people to realize is that it will collapse. It is going to stop working all together and relatively soon. When it happens your bank will disappear and your currency will be worthless, your grocery store will become an empty shell, your gas station will run dry, your lights will go out, your cell phone will stop working…
The process of economic breakdown may involve a relatively slow devolution or unwinding. Or the system may succumb to a shot in the back of head, some event that brings it down suddenly and with a bang. The present rulers of the economy will be sorely tempted to a draconian measure to save their bacon. For instance, a war could be launched with an attack on Iran by the U.S. or its proxies in Israel or a flu pandemic could emerge from their labs. Such a war or plague would conceal the systemic economic failure and allow for the rationing and repression they must rely on to function awhile longer.
The present public relations campaign touting “recovery”, part of that being Fed Chairman Ben Bernanke’s performance this week in Jackson Hole, is a delaying device. It is meant to allow the men in charge time to prepare and position themselves as best they can for the most reasonable outcome. We should understand what they know: there will be no economic recovery! There is simply no rational economic reason for one to occur.
The capitalist economic system is experiencing a completely natural life cycle. From the time of the collapse of feudalism and its birth in the Industrial Revolution, capitalism was always destined to become a dominant global force. Globalization will be a historic marker as the zenith of its existence. But globalization robbed the system of the only thing that kept its fatal internal contradictions at bay—-growth. Capitalism has conquered the planet, it has nowhere else to feed. The time of its death is now at hand.
Skirmishes around the world are signs the two most powerful groups that capitalism creates are beginning to engage in a final battle for power. Marx called them the bourgeoisie, the ruling class, and the proletariat, the working class. It can be most simply described as the clash between the haves and the have nots, the wealthy and the people who must work to live.
The showdown has always been inevitable and it must destroy one class or the other. Then on the ruins of the old system, the class that prevails will reorganize society along the lines of their dictates. If the bourgeoisie remains on top it will not mean the restoration of capitalism to health and stability. It will mean the depopulation of the planet and the enslavement of man in a world described in the dystopian literature of Orwell, Huxley, and Atwood.
@Jal:
Thanks for the summary. I appreciated it.
Aesthete:
You miss the point. Someone is willing to pay Kim $3,000 an hour for his advice, because he adds that much value to them.
People may pay you less, because you add less value to them. That's a function of what you know and how you spent your time and brainpower. I'm sure that you could have made much more money than whatever you do now, but you chose not to.
I'm sure Kim does not begrudge your choice; why should you begrudge his?
And, no, Kim making $3000 an hour does not make him a Wall Street Pig Man. He may or may not be. In my book, to be a Pig Man, you have to be either gambling with someone else's money, imposing extraordinary externalities and risks on society based on your gambling, or engaged in fraudulent behavior.
Yours with love,
TAE Right Winger
DEATH said..."Hot Hunan Stir-Fried Field Mouse"
:-) Don't laugh too hard. And get used to enjoying the crunchy bones.
Out in the real China, you eat the shrimp shell and all; watermelon is eaten seeds and all- and I ate "Spring Peepers" (tiny tiny frogs) - bones and all.
You get used to it.
Bluebird:
While I have never used, I have purchased and was impressed with the Solar Hot Pot (the one with the aluminum reflectors, not the cardboard). An example appears at http://www.solarovens.net. I have one currently, I may buy two more (one for beans, one for rice, one for whatever). There is an American manufactured solar oven for around $250 that looks nice.
Of course, you can make your own. Spend a half hour or so on the Internet and see just how simple it all really is.
As a fallback, you may with to purchase a Volcano stove (the non-portable), about 300 pounds of charcoal per year, and a dutch oven. The Volcano stove is very fuel efficient.
TAE Right Winger
@ Nassim
House prices in the inner city are ridiculous! Especially Coburg, Melbourne CBD, St Kilda, the Docklands etc.
That article was damning to say the least. In a year or less I expect 100% of suburbs to be affected. Even Geelong and those areas outside Melbourne along the Great Ocean Road and down south along the beach are ridiculous, house prices I reckon doubled in the 2.5 years I was there!!?
It is a religion in Australia to own property and the young home owners grant is basically like the government nailing a coffin into the future of young people. Build equity, my A$$.
Hi Biff,
When writing Death of a Salesman,, Arthur Miller wrote in his notes about being a salesman:
A salesman doesn’t build anything, he don’t put a bolt to a nut or a seed in the ground. A man who doesn’t build anything must be liked. He must be cheerful on bad days. Even calamities mustn’t break through. Cause one thing, he has got to be liked. He don’t tell you the law or give you medicine. So there’s no rock bottom to your life. All you know is that on good days or bad, you gotta come in cheerful. No calamity must be permitted to break through, Cause one thing, always, you’re a man who’s gotta be believed. You’re way out there riding on a smile and a shoeshine. And when they start not smilin’ back, the sky falls in. And then you get a couple of spots on your hat, and you’re finished. Cause there’s no rock bottom to your life.
For anyone interested in value or reality, sales appears the dark, empty heart of a people--my people.
Lone Ranger,
Back in 1989 or so, Australia was in big trouble. Lousy stock markets, huge frauds and massive draught.
I was once on an airport bus from Rome's Fiumicino. A plane had just arrived from Australia and the bus was full of their farmers on a tour. They were all amazingly sunburnt and quite dried out. We went past Italian fields that were bright green and these guys and their wives were almost drooling as they remarked on what looked to them like some sort of farmer's heaven ...
VK,
Last night, at a goodbye party, people were asking me if we will be buying a house in Australia. I assured them that one can rent a place there twice as big as the one we have here for the same money. People here don't get it either.
Can someone explain to me the mechanics of how unusually high trading volume in 4 financial stocks leads to a rally (rally presumably meaning a broader market rally)? Kim is confusing cause and effect, methinks.
First, only BAC is a component of both the DJI30 and the SPX500. FRE and FNM are components of neither. C is only a component of the SPX. Only the massive change in BAC, which probably contributed about a third of total DJI rally, had significant broader market effect. Why not take the FRE, FNM and C money and pump that into BAC where it would have more effect?
Second, relatively high stock prices only allow companies to raise money if they are issuing new stock which may be the case (I haven't checked). But surely it is more efficient for the Fed to simply swap toxic assets for treasuries in existing alphabet-soup programs than to go through some convoluted backdoor scheme. The existance of the swaps (akin to an implicit government guarantee) is the rationale touted behind financials being good investments again.
Third, herdonomics, to the extent that I understand it, suggests that this rally was bound to happen. That "oversold" blue-chip penny stocks like the 4 mentioned would attract disproportionate volume is not surprising. I suspect that once certain stocks become hot, they become hotter in a process I'll call the Lindsay Lohan Effect.
Once the greatest fool of this bear market rally has bought BAC, we will see the next leg down, not when schemes in Kim's imagination run out of money.
Farmerod,
High Frequency Trading in 4 "chump change" stocks serves multiple purposes. First, it provides the illusion of market liquidity where there is none. This can entice people back into the broader market believing they can easily sell out via stop loss orders when such is not true.
Second, HFT in these stocks served to help lift all equity stocks (financials) which had been hit particularly hard. Again, the illusion from prior recessions is that when the equities recover, the broader recovery cannot be far behind so get on board now!
Third, as you noted, at least two of those stocks serve as components of two major indices, thus artificially inflating both indices.
Finally, despite this 3000 point rally there have been some serious down days along the way. This again is HFT - they lure some major institution into the market and then fail to honor offers they put out mere milliseconds ago, forcing the buy price much higher, and then selling to each other below the buyer's price forcing the buyer to immediately sell at a loss.
Karl Denninger notes:
Next up we have this proposed FINRA rule:
FINRA is proposing to adopt NASD Rule 3310 (Publication of
Transactions and Quotations), NASD Rule 3320 (Offers at Stated Prices), IM-3310 (Manipulative and Deceptive Quotations) and IM-3320 (firmness of Quotations) as FINRA rules in the consolidated FINRA rulebook without material changes. The proposed rule change would combine NASD Rule 3310 and IM-3310 into FINRA Rule 5210 and would combine NASD Rule 3320 and IM-3320 into FINRA Rule 5220 in the consolidated FINRA rulebook.
This is rather arcane, but the gist of it is that apparently laws and regulations standing since 1939 and 1960, adopted to prevent the practice of disseminating a price (bid or offer) on a stock exchange that one does not intend to honor, have somehow been gamed by recent "technological innovations" (is this due to "High Frequency Trading"?) and thus requires restatement in a more-consolidated and more-airtight form.
Is not the substance of this announcement that in fact firms have been publishing bids and offers they have no intention of filling - that is, under the rules standing since 1939, people have been getting screwed due to "technical" violations of those regulations? More to the point, isn't offering to buy or sell something when you have no intention of actually doing so commonly defined in the law as FRAUD? If so, why is FINRA "tightening the rules" instead of the FBI referring evidence of current and past conduct to federal prosecutors and Grand Juries for the purpose of laying criminal indictments?
As you can see from Karl's distillation of the new rules, someone (GS, JPM, etc.) has been engaging in "technical violations" of existing law that result in what should have been called fraud.
That's the basis of the current rally, a point noted by Mr. Kim to whom Ilargi refers in the current TAE entry. The market is being propped up via subtle fraud, at least subtle to the casual observer. However, as Denninger notes and as Ilargi has noted for years, this means the crisis around us is no longer financial alone but political. Karl asks a question that the founders of the United States asked of King George - is your government no longer legitimate?
In propping up the market via fraud, we grow dangerously close to a broad based awakening to the fact that the entire thing is a scam and that therefore the government and all its enforcement arms are nothing more than thugs with guns.
Ok, just to revive the debate a little bit, here's another guy who doesn't believe in the US public rising up in revolt any time soon:
"The real question is this: When are we going to rise up against our government and the criminal cartel that owns it?
And with each passing day I am more convinced that the answer is -- never. That takes true inner convictions and ideals, not to mention courage. The real thing, not political rhetoric and ideology. Convictions are measured by actions. And true convictions are arrived at through the clear-eyed self-examination and deep questioning and personal sacrifice of individuals. And defining one's self as something necessarily other than the state. We failed to do so too long ago. We are now state property. A mass of people rallying and surging back and forth in response to state manufactured pseudo events and faux choices. If I still loved this country I would weep for it. But I've watched us too willingly acquiesce to this fate for too long. I don't think we have the reservoir of cultural, moral, spiritual and political strength to turn things around. Or even conceive of what can be, other than what we've seen. Instead, we are issued empty terms as convictions, such as democracy and diversity."
From Joe Bageant's latest...
71% of those polled on Zero Hedge so far believe deflation is going to happen in the next 18 months.
Chaos - your Bageant quote makes me think of people like Timothy McVeigh and the Al-Qaeda suicide bombers, people who, however misguided in our estimation, had the courage of their ideological beliefs to take extreme action. I don't think there are many like that among us which is perhaps fortunate. I think also of Vichy France where the vast majority of the population accepted Nazi rule and the few who did not, the Resistance, in large part did so because they had no choice. They were already branded as socialists, communists, Jew, etc so their choice was to fight or die anyway. The majority will go along to get along under circumstances that are less than mortally threatening and even then, when they are being herded into the gas chambers, most will go meekly.
I don't see any kind of big uprising anytime soon. We'll more likely see a slow loss of social cohesion and breakdown of social order with a rising criminal class and eventually authoritarian rule.
For those who are interested in further reading regarding the "character" of the US public, Morris Berman's Dark Ages America is recommended.
Dr J,
They were already branded as socialists, communists, Jew
It may interest some of you to know that the French Resistance was very largely a communist phenomenon. Also, even the communists were totally stunned and divided by the Ribbentrop-Molotov Pact A good novel about that period is "Iron in the Soul" by Jean-Paul Satre.
Another historical note that the French tend to overlook is that the most successful assassin of the French Resistance was an Armenian - Missak Manouchian. The group he worked for was composed of Jews (Hungarian, Polish), Armenians, Spaniards and Italians. They were probably betrayed by their French colleagues. There were no French in this group (not even French Jews).
The group carried out 56 "terrorist" acts which resulted in 150 deaths and 600 wounded. This all took place around Paris in 1943.
wow great great great article
WHERE HAVE I HEARD THIS BEFORE??????????
you are so right about the market being manipulated......................I was sure with the financials in our faces that the market would have not only fallen but fallen about 1500 points or more..............
there is no way with foreclosures up 18% year over year that any green shoots crap are real.
you also said something I HEAR NOWHERE -
UNEMPLOYMENT HAS CAUSED MOST OF THE FORECLOSURES
so instead of finding people employment THE GOVERNMENT CLOSED DOWN THE MORTGAGE COMPANIES.................
THOSE INVESTMENT BANKERS SECURITIZING THE CRAP IS WHERE IT STARTS, HEAR ME GREENSPAN AND RUBIN AND CLINTON GUTTING THE GLASS-STEAGALL ACT
that is our FIRST FIX TO REINSTATE THE GLASS STEAGALL ACT.........IMMEDIATELY
and the smart boys at the top feel so proud, they are at least making more spoils on the misfortune, SHORTING AND CASHING IN ON THE FORECLOSURES
I HAVE SAID FOR 3 YEARS - IT AIN'T GONNA BE FUN TO BE RICH SHORTLY
You said it, how happy are you going to be driving past starving kids (read deal, not the fakes at the overpasses)with your fat well fed kids in the car and a shotgun on your lap.....................
the elites like Teddy Kennedy that opened the door to mass, third world, uneducated illegals WHILE HE WAS PROTECTED BEHIND GUARD GATES...........
think they won't be harmed, well the unfortunate joke is on them, their grandkids might be killed for the pretty car the family bought them...............
Ugly very very ugly AND LIKE THE DEPRESSION, EVERYONE IS INVITED...........
and as to one of the comments MADE that all this ammunition stockpiling will result in poor innocents being killed,
wow, THOSE ARE EXACTLY THE WORDS THE GOVERNMENT WILL USE TO DE-ARM YOU, no coincidence that the first thing Hitler did was to take away the guns.........made it easier to kill those millions of Jews, didn't it?
nope someone like me looks for a lower job when I lose the good one to get by, BUT THERE ARE MANY PEOPLE THAT LOOK FOR SOMEONE LIKE YOU TO ROB.............GET READY..... AND THEY ARE GOING TO BE LAYING OFF POLICE, HOW MANY OF YOU HAVE EVER CALLED THE COPS AND THEY NEVER COME,................that is what those guns are for...........
the elites like Teddy Kennedy that opened the door to mass, third world, uneducated illegals WHILE HE WAS PROTECTED BEHIND GUARD GATES...........
Excuse me?
These illegals took jobs that American's didn't want to do.
These illegals are human beings.
These illegals have also become successful entrepreneurs, scientists, doctors, accountants and a part of your community.
What about the illegality of those who stole Native American land while butchering them?
GZ
First, it provides the illusion of market liquidity where there is none.
Nope, don't buy it. Even without this supposed artificial volume, those 4 stocks were heavily traded and would not have deterred a trader based on low liquidity. They are not on the pink sheets like Lehman.
Second, HFT in these stocks served to help lift all equity stocks (financials) which had been hit particularly hard. Again, the illusion from prior recessions is that when the equities recover, the broader recovery cannot be far behind so get on board now!
Maybe expand on this a little. As a somewhat aware financial layman, I have paid attention to the index prices themselves, not volume. The average guy who decides whether to put money into or take money out of mutual funds (which is a more common task than trading stocks), does so on the basis of price trends and the news. I'm sure HFT is a great way of skimming a little of each trade but that mechanism would probably work in any market, bull or bear. I don't understand how skimming a small percentage of trade money would increase buyers and prices. Seems it would do the opposite. More likely, people are putting money back in the market, particularly financials, through mutual funds, pension funds and individual speculative activities and the market is rising despite the HFT.
...at least two of those stocks serve as components of two major indices, thus artificially inflating both indices.
Only BAC has any significant broader market influence and only on the DOW. C and BAC are but splashes in the SPX bucket.
Finally, despite this 3000 point rally there have been some serious down days along the way. This again is HFT - they lure some major institution into the market and then fail to honor offers they put out mere milliseconds ago, forcing the buy price much higher, and then selling to each other below the buyer's price forcing the buyer to immediately sell at a loss.
I agree that this could be the case. But once the euphoria has ended, this mechanism (if it is even significant now), will cease to be in the future. Money can only effectively chase its tail when more is being added. When the greatest fool has entered, the decline will resume and, like last year about this time, not even HFT will be able to stop the herd.
Catherine - "...the elites like Teddy Kennedy that opened the door to mass, third world, uneducated illegals WHILE HE WAS PROTECTED BEHIND GUARD GATES..........."
Who is illegal? Since when are we down on hardworking immigrants (as were our anscestors)? Teddy treated them like people, not chattel.
Please focus on the real tyrants responsible for our predicament--you might look to Wall st. and in corporate boardrooms.
Hello,
An interesting article by Tainter over at TOD.
http://www.theoildrum.com/node/5745#more
Put up by Nate, as usual, with some interesting comments.
Ciao,
FB
Illegal immigrants may be people, but they are not American citizens and should go back to their own country. They should receive absolutely nothing from the federal government. If they want to become citizens, they can follow the process. If they don't get in, they have no business being here.
VK: They do the jobs that Americans won't do? Nice to see that liberal brainwashing transcends borders. No, they do the jobs that Americans won't do AT THAT PRICE. If their employers paid more, Americans would gladly do those jobs.
TAE Right Winger
Chaos said...
For those who are interested in further reading regarding the "character" of the US public, Morris Berman's Dark Ages America is recommended.
Here are the last couple paragraphs from Berman's latest blog, and they seem very appropo to this discussion:
The tragedy of the commons – what Hardin called “the remorseless working of things” – is that a society like the U.S. won’t undertake serious changes even when it is sitting on the edge of an abyss. It has to actually be in the abyss before it will entertain such changes; i.e., it has to be faced with no choice at all. It seems unlikely now, but things are probably moving faster than we realize. In terms of population, food, resources, water, social inequality, public health, and environmental degradation, a crunch of the type I am referring to may be only twenty years away.
In Shakespeare’s Two Gentlemen of Verona, the character Valentine is confronted by an outlaw, who asks him if he is content “To make a virtue of necessity/And live, as we do, in this wilderness?” That may prove to be the only “choice” we have. As Thomas Hobbes put it, a few decades after Shakespeare, “Hell is truth seen too late.”
Of course, he envisions that this crunch may be 20 years away. Judging by the way things are developing, I believe I&S and most of the posters here likely envision this occurring significantly earlier than that.
Well, I'd side with those who have stated "I'll take all the extra time I can get, so as to be as prepared as I can."
TAE Right Winger - "They should receive absolutely nothing from the federal government. If they want to become citizens, they can follow the process."
This (above) is a point worthy of rational discussion regarding the extent to which immigration can humanely be conrolled.
(The border patrol does turn back and send home about 250,000 each year by the way.)
My point is that immigration is not the reason jobs are scarce. There is a plethora of much more valid and pertinent causes, both economic and political. Most of the culprits go to "work" in coat and tie and consider themselves very successful American free marketeers.
No human being is illegal!
"My hope is that your generation will demand an end to war, that your generation will do something that has not yet been done in history and WIPE OUT THE NATIONAL BOUNDARIES THAT SEPARATE US FROM OTHER HUMAN BEINGS ON THIS EARTH." ~ HOWARD ZINN (Commencement address at Spelman College - May 15, 2005)
"My point is that immigration is not the reason jobs are scarce."
That's wishful thinking, and not backed up by the numbers. It's THE key factor in certain fields. Soon coming to yours, unless you're a politician.
FB @ 3:54
Thanks for the Tainter link. Having finished his 1989 "collapse" book a month ago, I have wondered how he might view current levels of complexity including the internet.
As Ilargi predicted a few weeks ago, Tainter's speech implies the internet's failure, calling technological solutions "a faith based approach to our future." However, he maintains 30K altitude, immune from specific timing predictions (a common source of friction here at TAE).
Immigration, when managed, is not an immediate problem. Immigration, when illegal, is a major problem. Population growth, by any means, will be a larger problem, longer term.
Legal immigrants can be expected to learn the basics of the language, to learn to drive, and to maintain insurance. Illegals do nothing of the sort in many cases.
Had another hit-and-run of an elderly pedestrian here last week -- yup, killed by an unlicensed, uninsured illegal.
I think it's funny we all talk about short resources and coming conflicts, and then some people say "let's add a lot of other people to the mix". Talk about cognitive dissonance and double-think.
Perhaps the most relevant parallel with 1984 is the refined use of inductive neuro-linguistic programming in economic and socio-political language, similar to Oceania's 'Newspeak'.
"The purpose of Newspeak was not only to provide a medium of expression for the world-view and mental habits proper to the devotees of Ingsoc,
but to make all other modes of thought impossible.
It was intended that when Newspeak had been adopted once and for all and Oldspeak forgotten, a heretical thought — that is, a thought diverging from the principles of Ingsoc — should be literally unthinkable, at least so far as thought is dependent on words.
Its vocabulary
was so constructed as to give exact and often very subtle expression to every meaning that a Party member could properly wish to express, while excluding all other meanings and also the possibility of arriving at them by indirect methods.
This was done partly by the invention of new words, but chiefly by eliminating undesirable words and by stripping such words as remained of unorthodox meanings, and so far as possible of all secondary meanings whatever.
To give a single example.
The word 'free' still existed in Newspeak, but it could only be used in such statements as
’This dog is free from lice’ or ’This field is free from weeds’. It could not be used in its old sense of ’politically free’ or ’intellectually free’ since political and intellectual freedom no longer existed even as concepts, and were therefore of necessity nameless.
Quite apart from the
suppression of definitely heretical words, reduction of vocabulary was regarded as an end in itself, and no word that could be dispensed with was allowed
to survive. Newspeak was designed not to extend but to diminish the range of thought, and this purpose was indirectly assisted by cutting the choice of words down to a minimum."
The character of Big Brother often seems like an agalgam of Stalin, uncle Sam and the god of War.
- Which is why the unword 'amalgam' has just been rendered thoughtcrime.
TAE Right Winger
"No, they do the jobs that Americans won't do AT THAT PRICE. If their employers paid more, Americans would gladly do those jobs."
-----
Boy do I feel good!
We had a good group of volunteers digging potatoes.
We dug all that we wanted to take home and over 1,000 lbs. for the food bank.
As we rested from the hard work and it was hard work, everyone appreciated that they do not have to do this on a regular basis, (to put food on the table).
Of course I put in a little bit of prospective.
Its a good thing that we have the Mexican, east indian etc. labor working the fields because we would not be able to afford to pay for the produces at the high wages that the "whites" want for their low productivity.
jal
Anon @ 12:09
GOOD NEWS!
The US is "finally" becoming a free country by your (and Janis') definition.
Having consumed some of TAE's most dismal commentary recently, I was about to search for a Janis/Kristofferson/Bobby McGee video to post, but you beat me to it! Sorry to find no actual video footage anywhere on the web.
Thanks also to "Farmageddon," who yesterday posted this link, in response to the N. Korean discussion, but a powerful reminder of what has been lost in US agriculture sustainability.
http://www.countercurrents.org/mcpherson100909.htm
In almost every "field" in our global culture, we can see monumental houses of cards that recently seemed substantial, but now the props are showing and we all wait nervously for the tornado (or even a slight breeze) that will take them down.
Interestingly, near the end of Orlov's "Reinventing Collapse," which I just finished, he makes a half-hearted case for a nomadic or itinerate lifestyle, providing the flexibility to adapt quickly to changing environments.
"Me and Bobby McGee" could become the new national anthem!
These are the voyages of the mutinous market-ship exitprice.
Its continuing mission:
to explore strange and exotic corners of market-space, while spitting on the laws of physics, to seek out new and lucrative forms of debt and introduce them to untainted civilizations that have yet to be fully monetized, to boldly leverage where no man, no person, has leveraged before.
"Capt'n, the dilutium-crystals have been de-energized, I ca'na push her any further, or she'll blow!"
"Let her blow then, just give me everything she's got. We've got to get this cargo of green shoots to planet earth before the people there go insane with despair."
"Dammit, Jim, I'm a central
bank, not a bottomless pit!"
You're skating on thin ice showing pictures of my ancestors lying dead in their folly. I hope you have a deeper point than politics or economics sucks. Sometimes you play a bit fast 'n loose with the truth and history. Case in point the counterpoint of poverty with the dead of a senseless and costly civil war whose end was the means to gobble up my forefathers.
Did you mean that poverty is senseless? Ok, I'll bite, then whose due is it to alleviate that ill? Who will pay the piper to eiliminate that horseman? The fair Dutch with their overflowing coffers? Will the pot clubs and red light ladies cover that tab? Or can ya'll dip deep into the vaults of ABN Amro and cover the tab?
Or are you pledging Canada's resources? Your adpoted land whose beneficence you proffer for the world's ends? Enighten me o' learned one. Just whose till are you dipping into to right these wrongs?
Inquiring minds want to know...
@Jal:
"we would not be able to afford to pay for the produces at the high wages that the "whites" want for their low productivity."
I think an increase of at most 10% is quite well within society's ability to afford it, and that's from the most pessimistic study I've heard.
The problem is that local farmers would be at a disadvantage to imported food, where labor is cheaper. So, the only way to compete with this globalization nonsense is to import the labor illegally as well.
Thank you, Milton Friedman.
But you know what? I know a lot of farmers who would like to take up your free volunteer labor right now.
I know that you and your friends will never make such an offer.
The original point was quite right, it's all about the wages (or rather, the profit), no matter what the cost to society.
@anon: 5:47
"Or are you pledging Canada's resources?"
You're kidding, right? Part of the hypocrasy and flawed logic of I&S is that they are 100% for illegal immigration in the U.S., and 100% against it in Canada.
Just ask them where they stand on letting Americans in to use Canada's Health Care system. Their self proclaimed higher moral values seems to end right there.
@ anon
I feel good after a nice warm water shower. ( I appreciate the fact that it was available and that I could pay for that luxury)
I gave some of my sweat equity to the needy and the unfortunate ... the world is a little better off for someone.
hummm! Tell me ... what sweat equity have you donated lately that would make the world a little bit better?
jal
anon 6:00 - I don't see how you can equate citizens from the wealthiest nation on earth illegally accessing the health services of a less-wealthy neighbor (tantamount to outright theft) with citizens from a poor nation immigrating to their wealthy neighbor in order to achieve a better life through hard work.
Am I missing something here?
"I was about to search for a Janis/Kristofferson/Bobby McGee video to post"
I can find the meaning in this one too for what it's worth.
Krist Kristofferson "This Old Road"
http://www.youtube.com/watch?v=k7h2oHmMjzg&feature=channel
Look at that old photograph
Is it really you
Smiling like a baby full of dreams
Smiling ain't so easy now
Some are coming true
Nothing's simple as it seems
But I guess you count your blessings with the problems
That you're dealing with today
Like the changing of the seasons
Ain't you come a long way
Ain't you come a long way
Ain't you come a long way down
This old road
Looking at a looking glass
Running out of time
On a face you used to know
Traces of a future lost
In between the lines
One more rainbow for the road
Thinking of the faces in the window
That you passed along the way
Or the last thing you believed in
Ain't you come a long way
Ain't you come a long way
Ain't you come a long way down
This old road
Say you tried to chase the sundown
And you let it slip away
And the holy night is falling
Ain't you come a long way
Ain't you come a long way
Ain't you come a long way down
This old road
Look at that old photograph
Is it really you ?
Dr J - "I don't see how you can equate citizens from the wealthiest nation on earth illegally accessing the health services of a less-wealthy neighbor (tantamount to outright theft) with citizens from a poor nation immigrating to their wealthy neighbor in order to achieve a better life through hard work."
Well said! It's not like these folks are criminals crossing the border to ransack the U.S. They are just poor people looking for work, wanting half as good a chance in life as we already have by the sheer LUCK of being born here--U>S or Canada! And taking a huge chance in the process.
@Dr. J:
Ah, I get it. stealing from the rich is a god-given right, but stealing from the less wealthy is wrong.
Yes, I'd say you are missing something.
@Jal:
Hah. When you can't defend your point, rather than admit that you're wrong, you use the old trick of trying to distract and move onto something else.
That's magical thinking, bud. Not rational or logical thinking,though.
Good article in the NY Times entitled "But Who Is Watching Regulators?". It is written by Gretchen Morgenson.
If the following link does not work, copy and paste the title of the article into Google, to find it.
But Who Is Watching Regulators?
Yes - I think you could make a case that when the wealthy steal from the poor, that would be larceny, and when the poor steal from the wealthy, it is social justice.
Gravitas: "Capt'n, the dilutium-crystals have been de-energized, I ca'na push her any further, or she'll blow!"
That's "deludium", of course.
@ anon
"That's magical thinking, bud. Not rational or logical thinking,though."
Duhhh!
Pot calling the kettle black
What goes around comes around
You are wrong. As you Eat your banana, recognize and give thanks to those that made it possible for you to have it to eat.
Now tell me about what sweat equity you have donated lately that would make the world a little bit better?
jal
JAL, there aren't enough jobs in America right now for Americans. Why would it be a good idea to open the borders to allow people to compete for the few remaining?
And why shouldn't the "jobs Americans won't do" pay a living wage? My groceries may cost more, but I'll gladly pay that price if it means that an American can make a living wage without a college degree.
Your argument seems to be that without illegals, everything would cost more. My response: bring it on. I'd rather have my costlier groceries picked by an American citizen, and I'd rather not get a cheaply-assembled Chinese television if it means in the future there won't be jobs for my kids.
The illegals are a huge problem. They aren't the only problem. We also have to blame free trade, and the Democratic and Republican administrations that pushed it. And, of course, we need to reserve some special anger towards the Wall Street pig men.
TAE Right Winger
@ TAE Right Winger
"... there aren't enough jobs in America right now for Americans...."
Expand your statement ... There are not enough jobs in the world for all of the people.
"And why shouldn't the "jobs Americans won't do" pay a living wage? My groceries may cost more, but I'll gladly pay that price if it means that an American can make a living wage without a college degree."
You must have done some thinking while eating your banana.
Expand you comment ... Everyone everywhere should be able to get a living wage.
You may be willing to pay extra for American made but that is because you can afford it.
Look at the statistics ... the majority of American cannot afford it. That is why they buy from Walmart and Dollar stores.
"The illegals are a huge problem."
Wrong. Starving people are a real problem.
PSSSST!
Did you forget my question?
jal
Compared to the huge problems reflected in the hockey stick charts (and peak charts) regarding world population, energy depletion, water usage, deforestation, and certainly economic debt levels and money creation, etc., etc., the problem of U.S. immigration ranks not in the top ten.
It is a problem, but so is suburbanization and infrastructure aging, but it is not the crux of our dilemma nor is it possible to do much more about it than is being presently done.
@ Dr. J and Anon:
"The Law, in its majestic equality, forbids the rich, as well as the poor, to sleep under the bridges, to beg in the streets, and to steal bread."
Anatole France
The Longshoreman
If the workers take a notion,
They can stop all speeding trains;
Every ship upon the ocean
they can tie with mighty chains;
Every wheel in the creation,
Every mine and every mill,
Fleets and armies of the nation
Will at their command stand still
Join the union, fellow workers,
Men and women, side by side;
We will crush the greedy shirkers
Like a sweeping, surging tide.
For united we are standing,
But divided we will fall;
Let this be our understanding--
"All for one and one for all."
--Joe Hill
p.s.
I've always had a fondness for musketeers.
Sacking groceries and stocking shelves SHOULDN'T be a living wage job. It should be a teenager's job. Who says that every job should be able to support a person, or a family?
Professor Fekete has written that the problem of unemployment lies in the abolishment of Real Bills of Exchange after WW1. Without the ultimate liquidator of gold coin the real bill market and gold standard was sabotaged. The bankers had raided the "wage fund". Real bills were replcaed with short term bank credit. It took many years but the result was the massive unemployment during the depression. But they managed to resurect the system and blow an even bigger bubble. Every year more and more workers are rendered sub marginal. Now the banking system is dependant of borrowing short to lend long, a recipe for disaster.
"There is no easier profession that that of a banker, as long as he can tell apart a bill of exchange and a mortgage"
http://www.professorfekete.com/articles/AEFInterestAndDiscount.pdf
Also see, Borrowing Short and Lending Long: Illiquidity and Credit Collapse, by A. E. Fekete, CMRE Monograph Series No. 38, 1984
Lone Ranger
Gravity
I am just curious. What was your first language?
_______________
I am leaving for Mexico and points south on Monday. I intend to take a non-job that the locals can't afford not to do.
Paleocon said...
"Sacking groceries and stocking shelves SHOULDN'T be a living wage job. It should be a teenager's job. Who says that every job should be able to support a person, or a family?
You comment actually makes today's intro picture appetizing by comparison.
Safe travels buzzard!
"Well said! It's not like these folks are criminals crossing the border to ransack the U.S. They are just poor people looking for work, wanting half as good a chance in life as we already have by the sheer LUCK of being born here--U>S or Canada! And taking a huge chance in the process."
I agree.
The Checklist
Did you see the checklist?
No!
Not the one on the table, the one on the wall of the womb.
The one that listed your choices: male or females, tall, short, skinny or wide and things such as straight or gay.
You really didn’t see it?
It was right there on the wall of the womb.
It had all your choices listed, from America, Russia, Iran or Sudan any country of the world.
You really didn’t see it? The list of choices you had before you were born.
There were things such as with all my fingers and toes, the color of eyes, the length of the nose and of course the shade of skin.
It listed such thing as rich or poor, where you would live, your level of intelligence, and who your parents were.
You really didn’t see it?
The checklists on the wall of the womb before you were born.
Well, I’m sorry my friend, I don’t know why.
But I must admit that neither did I.
AMSTERDAM, Sept 13 (Reuters) - The Netherlands is on the brink of a period of deep government budget cuts as the government aims to cut up to 20 percent in spending in some areas to cope with the global recession, Dutch media reported.
The government will unveil its 2010 budget on Tuesday, but the major figures leaked out on Friday with media reports saying flat economic growth and a budget deficit of 6.3 percent of Gross Domestic Product (GDP) are expected in 2010.
The leaks continued on Saturday, when a newspaper and a TV station said they got their hands on the budget documents, revealing the government was looking at drastic cuts to improve its finances.
"We know one thing: after the crisis we will encounter stubborn problems, particularly the labour market and government finances. Doing nothing is no option, difficult choices will be unavoidable," Finance Minister Wouter Bos was quoted saying in the budget documents by commercial broadcaster RTL 4. The Dutch cabinet believes 'fundamental political reconsiderations' are necessary and wants a broad social debate about how the Netherlands can emerge in 2020 "cleaner, smarter, stronger, more solid and with greater solidarity".
http://www.iii.co.uk/news/?type=afxnews&articleid=7520520&action=article
el gallinazo said...
I am leaving for Mexico and points south on Monday. I intend to take a non-job that the locals can't afford not to do.
We will all be waiting with anticipation to hear your stories of fascinating conversations with Mexican plumbers!
Ah, yes, those jobs that American plumbers cannot afford to take!
Perhaps, El G, you can give those Mexican plumbers a tip or two on how to manipulate a Pipe-Wrench!?!?
HA! And tell them immediately how extremely short of plumbers the American economy is and would they deign to cross the border and help fill the extreme need here up north?!?!
HA!
But wait, there's more! They would have to pass muster of the Right-Wingers massed at the border, to force the Mexican Plumbers to take an oath to foreswear joining any Unions (Commie enterprises, you know) and that they would have to work for penury wages so that American Plumbers could bask in high-paying contracts!!
HA!
El G,
Best wishes and we look forward to your further stories!
To anon at 11:11.
The biggest cause of poverty is poor people having babies they can't afford. Perhaps their parents should have read the intrauterine memorandum about how stupid it would be to foist their enduring poverty on yet another generation.
To JAL:
1. Please restate your question(s) and 2., there is no reason why the unemployed in some other country should be America's problem. Guatemala should take care of Guatemalans; America should take care of Americans.
TAE Right Winger
Just beware the fearsome Polish plumbers! They put such a scare into France in 2005 (as a represenation of wage-depressing effects from free movement of labour) that the French rejected the European Constitution because of 'em.
As the phoney-baloney FIRE economy in the U.S. bursts into flames and destroys the middle class and suburbia (thank you), there won't be too many immigrants trying to enter the equivalent of a burning building.
The 'mean' menial jobs done by the illegal immigrants will be claimed by the surviving stragglers of the former middle-class, now reduced to the class of 'peasants with college degrees', a Brand New Demographic Niche.
The debate about any kind of immigration will be moot.
Americans of many stripes will be wishing with all their might that they could simply leave the burned out hulk of a former First World Country like the USA and just survive in a 'developing country', as, you guessed it, an immigrant.
Everything is relative.
What goes around comes around.
Be careful old bird
or be good
snuffy
Conceptually, somewhere along the line there reaches a tipping point where government intrusions no longer act as a stabilizing force. They become invariably destabilizing, as the quantity of government monetary inflation becomes massive and uncontrollable. This is the nature of inflationism, although this dynamic is nowhere to be found in Keynesian doctrine. It is my view that this tipping point was reached some time back. It is with this analysis in mind that I fear the emerging Government Finance Bubble risks destroying the creditworthiness of our entire economy.
http://www.prudentbear.com/index.php/creditbubblebulletinview?art_id=10271
Yup
Your argument seems to be that without illegals, everything would cost more. My response: bring it on. I'd rather have my costlier groceries picked by an American citizen, and I'd rather not get a cheaply-assembled Chinese television if it means in the future there won't be jobs for my kids.
As much as I hate to agree with a right-winger, I have to say "Right on!" In the coming age of scarcity, we need LESS stuff, not more cheap crap. It's probably too late to manage a controlled descent of the consumerist society, but if we could do with our possessions like the French do with their food -- small amounts of quality ingredients instead of heaping mounds of sub-par produce -- we wouldn't be wasting the planet so fast. "Less stuff, but good stuff" should become the new paradigm.
"... Americans of many stripes will be wishing with all their might that they could simply leave the burned out hulk of a former First World Country like the USA and just survive in a 'developing country', as, you guessed it, an immigrant..."
WHAT!!!
Do you really think that the Americanos would be allowed to work in the Mexican factories? To take away jobs from the "locals"?
jal
Right Winger wrote:
"The biggest cause of poverty is poor people having babies they can't afford."
Congratulations, you now know as much about social, economic, and political stratification as Rush Limbaugh and Sean Hannity.
Aesthete
@Dr. J.
Ok, so you're on record that it's right to steal when it suits your needs. Now, instead of from the rich, how about when poor people steal from each other?
Because that's exactly what Illegal immigration is all about. It's about poor vs the poor, with the rich making lots of money off of it.
First, the Illegals wiped out the farm worker jobs from citizens. Yes, 20 years ago, full citizens were indeed working the fields. Trouble is, they wanted a dollar or two too much. So their jobs were wiped out.
Now, the Illegals have taken over more jobs, this time from the middle class. Construction and others. Farmworkers are about 1% of the Illegal population now.
Oh,and costing the taxpayer tens of billions in the process, just to support them.
So where, Dr. J., do you draw the line at stealing, with your warped morality?
@Jal: Nice try, but you still haven't made any rational or logical points to dispute the simple fact that it's all about wages and profit at the expense of society. Rather, you've devolved into deflect and distract.
I can understand why you'd rather avoid the issue; because you simply can't come up with any reasonable justification.
That's called living in fantasy land, JAL.
'Illegal immigrants' provided America with subsidised labour, infact most of the stuff that America runs on and uses comes from the subsidies that result from the exploitation of people and the environment right across the planet. America with 5% of the world's population uses up 25-28% of the world's resources and sucks up around 75% of the world's capital.
If America wants to be left alone by these 'immigrants' maybe they should stop meddling in the affairs of the world, their wars for oil and their bases all over the world projecting power. Maybe they should stop meddling and destabilizing countries in Latin and South America for their interests as well.
As for the rich getting richer and the poor and middle class getting exploited by them, I call bull on that. For too long the American middle class has simply ignored the issues, they continue to VOTE the same people into power who screw them over. Americans have had decent third party candidates such as Ralph Nader for a long, long time. A man with a distinguished track record who has fought for them, yet people want to vote in the sale BS liars and cheats.
The American people are guilty of negligence and wilful ignorance too happy with American Idol and extra large McFries and McIdiot politicos. The ignorance can be clearly seen with the healthcare debate, where people fear evil, bad socialism. Gee whizzz, the Germans can implement a system with half the cost and twice the output in less then 5 years.
The truth is out there for those who seek it, mankind has never been more informed. If the masses decide to waive their political rights and decide to believe MSM propaganda without disseminating fact from fiction then that is their choice and their blindness.
VK, you argue that it's the fault of the American people for voting for the wrong peeps.
Yet almost all of the candidates are vetted for us.
If a corporation laid out a spread of dog turds for you to eat, which would you like best? Which would you vote for? Which one can we say, VK likes to eat the most?
Probably none, I would guess. But if you don't vote for one, others will. And though there were no other choices, you'd still blame them for choosing one of the turds for you. But there was nothing else to choose from and one had to win.
Yet almost all of the candidates are vetted for us.
Excuse me?
Ralph Nader has been fighting for the American people for four decades plus. Check out his recent article
http://tinyurl.com/ovdtd9
The Wall Street gang is at it again! It’s been one year since Wall Street’s collapse and bailout took trillions from taxpayers and the sinking economy. The speculative instruments that pulled down the economy were those super-risky sub-prime mortgages, credit default swaps, collaterized debt obligations—you know—Las Vegas East, using other peoples’ savings.
As if to elaborate their gigantic con job, the investment banks, guaranteed by you the taxpayers, are now packaging life insurances policies in what sane, on the ground businesses would consider deranged exotic money plays.
His Nader Raiders helped publish the following reports and exposed malpractice and corruption in the system.
Nader's Raiders (Federal Trade Commission)
Vanishing Air (National Air Pollution Control Administration)
The Chemical Feast (Food and Drug Administration)
The Interstate Commerce Omission (Interstate Commerce Commission)
Old Age (nursing homes)
The Water Lords (water pollution)
Who Runs Congress? (Congress)
Whistle Blowing (punishment of whistle blowers)
The Big Boys (corporate executives)
Collision Course (Federal Aviation Administration)
No Contest (corporate lawyers)
Destroy the Forest (Destruction of ecosystems worldwide)
Operation: Nuclear (Making of a nuclear missile)
Check out his video on the road to corporate fascism
http://video.google.com/videoplay?docid=-4897059404976553130
To say that the American people have not had a choice is irresponsible and shifting the blame. One must look in the mirror, the people voted for the crooks in charge because they promised them security or hope but not the truth. No sir, the truth is feared. And it must be tossed, hidden, shunned, discarded, anything but the truth.
VK, I wholeheartedly subscribed to Ralph Nader's message that "there's not a dime's worth of difference" between the two main American political parties. I voted for Ralph Nader in 2000 -- and I was living in Florida at the time. Mate, am I ever sorry I did that! Jeb Bush and Katherine Harris would have probably found a way to steal the electoral votes there anyhow, but I made it easier for them. That's why I always choose the less-stinky dog turd now, even when I have to do it by absentee ballot. Sometimes, even Americanos who think have to choose "the lesser of two weasels."
Bukko,
The problem is not that too many people voted for Nader in Florida, the real problem is that too few voted for him across the country. This man should getting 50-60 million votes if not more.
For Americans to say that they have no choice in elections is disingenuous at best. They have always had a choice, to vote this man into office, to make him President. To give back to the people what belongs to them - their country. The corporatocracy has taken over only because people that they steal and loot from are too apathetic and ignorant.
The I don't care and I don't know and is Paula Abdul coming back to Idol slogan has replaced liberty and equality for all. The corporation has become a legal entity that is allowed to steal from the public commons for private benefit and then pollute those commons.
Let's see now...
* We're involved in two tragic and violent wars.
* The debt is astronomical and growing exponentially.
* We are importing about half a trillion$ worth of oil annually.
* Medicare and health care costs are also expanding astronomically.
* Our infrastructure including transportation, city utilities and the energy grid are deteriorating.
* Etc.
So what is wrong, who is to blame, and what is our topic of discussion?
Some folks called "illegal aliens" (who are very much like most of our ancestors). If this wasn't so absurd and very sad I would be laughing out loud.
VK - You're right IMO, Nader does make a lot of sense but the system was, is... too rigged.
For example, in several states he was not even able to get on the ballot--midwest etc.
VK, you're absolutely right. Nader has always been an alternative to the Republocrats. I've voted for him in the past, but he's never gone beyond a percentage or two in any given election. The system, unfortunately, is thoroughly controlled by the corporate parties, and not just the elections, but also the media and the country's schools and their curricula. Still, with the present economic (and political, as Ilargi would say:-))crisis this system won't last forever.
Thanks all for the good wishes. I am probably going to teach the locals how to cut a pressurized sewer pipe with a sawzall. Actually, my NGO friend in Oaxaca wants me to teach plumbing to the local indigenous women. We will see.
Of course, I have no intension or desire to work for earnings in Latin America. My only income now is $1250 per month from social security. Right now I could live a modest but comfortable existence with that in the mountains of Peru but I give that two years tops.
I will just try to follow Stoneleigh's advice and try to hold onto some marbles that i saved as long as I can.
I never watched Desperate Housewives but I read the following story down under. One of these housewives was married to a plumber and lived in a sumptuous McMansion. When they franchised the show to Argentina, the audience found this hilarious and the entire show lost "credibility." They had to change the profession of the husband.
In Peru, I always revert back to having been a chemistry teacher, a poor but highly respectable profession. Being a plumber is a notch above being a grave robber.
Thanks for all the gun advice. My life lately has been like trying to prepare for an Apollo launch. I even packed a roll of duct tape in my luggage. I only had a couple of hours to shop and there were no Ruger 22/10 stainless in stock in the area. But I managed to find one in excellent shape on a consignment rack, complete with a Bushnell 3-9x scope and sling. I bought an extra 25 round banana clip and a 1000 rounds. It was about half the price I would have paid new, and it is now in my storage area which is about five minutes by car from the airport I would use to come back to the USA. Hopefully, it will just sit their forever. The Glock was out of the question with a three day waiting period, but I would probably have passed on it anyway.
On another topic, I vote for Nader in 1996 which was the last year I could vote for President as residents in the USVI have no standing in the electoral college. If I could have voted, I would have voted for Nader in 2008 as well. I think we would have been better off with McInsane than Obama as the coming anger would be focused against the right and the remaining sane people could have mobilized sentiment against him faster than Slick Barry from Chicago. In this, I disagree with Bukko. Holding our nose and choosing a turd has not done well for us. Part of the problem is the US Constitution, which probably inadvertently locks in a two party system.
Dr. J
I had to leave my Gary Taubes paperback at home because it just weighed to damn much. But I just downloaded the Kindle e-version to my iTouch, for $10 from Amazon which reads just fine.
Also have my P90X DVD set and resistance bands packed away.
(Currently) fat old bird
El Galileo - If this ole dog was a bit younger I would volunteer to help with the "training" of the local gals. Alas and alack, and woe is me.
I had not voted major party since 1980 but got optimistic and plunked one down for the big "O". (excuse me Mr. Robertson)
Wishing you luck as you venture forth. BTW, how does the Ruger get transported from place to place?
Coy Ote
Coy Ote
"BTW, how does the Ruger get transported from place to place?"
It doesn't. It is just an option in my storage area near to my airport of potential re-entry, if I must return to a Mad Max USA. Also, for putting small game on the table for my Gary Taubes high protein diet while I am dodging Humongous. :-)
Dr. J has now changed from diet in humans to diet in mice. Don't know if I should laugh or cry for this guy.
Dr. J - you are missing something. It's called a brain. And actually fyi, doctors are so busy being doctors they hardly have time to be constantly blogging on the internet like you.
So stop trying to impress us under the false guise of being a doctor. Time to get real or maybe time to get off the internet and start focusing on your patients a little bit more. Poor patient!
el g - if you cut carbs you will eventually have to increase your fat intake, not protein.
Go long on plump guinea pigs and short on potatos!
BTW - back in my construction days, when I worked in the tar sands, actually, I met a Chilean pipefitter (fancy name for plumber) and he told me that when he traveled, as soon as he got south of the Mexican/US border he would acquire and carry a revolver.
I struggle with "values, right and wrong, the poor / rich etc" and have firmly based my views on what I think is right, then act accordingly.
We IMO are clearly headed for "problems" and yet those that understand, realise that chaos is not the way to go, yet it always seems to point in that direction.
What I see here today is how views from people can be seen from 180 deg to each other. These are one line statements and they cause people to be on opposite sides, yet even in this forum we ? are supposed to have a common interest?
What chance do we have of solving this through dialogue?
This site being mainly America's from outside we tend to feel as if we are looking in.
However we now are seeing the same behaviour in my country all-be-it just starting but no doubt the scandals will keep coming.
I offer some really good reading from a person who I think was a great man - Garret Hardin.
http://www.garretthardinsociety.org/articles/art_living_on_a_lifeboat.html
http://www.garretthardinsociety.org/articles/art_ecolate_view_human_predicament.html
http://dieoff.org/page96.htm The Ethical Implications of Carrying Capacity.
http://www.garretthardinsociety.org/articles/art_limited_world_limited_rights.html
There are others.
I apologise for not making it "clickable" could not get it to work.
China announced a probe into the alleged dumping of American auto and chicken products, two days after U.S. President Barack Obama imposed tariffs on imports of tires from the Asian nation.
http://www.bloomberg.com/apps/news?pid=20601110&sid=a7nGNZzouDOM
Tit for tat protectionism, the must have pulled out the 30's great depression script out of a vault somewhere
It doesn't matter how much the economy grows. What matters is the distribution of that wealth. Why should 1% of the people control the wealth of the country.
Why are billionaires paying 15% tax on clipping dividend coupons while the man working in the factory, on the front lines are taxed at a 33% rate?
Are the CEO's of the Fortune 500 really worth 500 times+ the average salary? Walmart's CEO gets paid 11,000 dollars an hour for doing what? Stripping the towns and cities of family run stores and community life and building gigantic box stores of Chinese made trinkets?
For Europe you can substitute in Tesco, Safeways, Carrefour and Aldi. It's a joke, the corporations in the name of profit will strip mine the people of their souls in the name of profit.
VK said...
It's a joke, the corporations in the name of profit will strip mine the people of their souls in the name of profit.
And their co-conspirators in congress, parliament, et al, will grease the skids for whatever legislation is needed to carry out their giant vacuuming operations.
My fear is that the BAU will continue until the country is utterly destroyed before the people wake up to what is going on. And then when the scapegoating begins, there will be far more collateral damage to innocents, versus actual perpetrators, being exposed and squashed.
The actual perpetrators will have long since vanished to their hideouts, much as many high-level Nazis did by fleeing to South America following WWII.
Norman Borlaug has passed away.
You may find my comments relevant.
http://littlebloginthebigwoods.blogspot.com/2009/09/norman-borlaug.html
While I will occasionally read anonymice comments, I have made it a practice never to respond to one. In my opinion, they are the high fructose corn syrup of the comment section and Ilargi only always them because blogspot gives him few options.
The reason chlorophyl is green is that it can absorb both blue and red photons and utilize them for photosynthesis while it reflects photons in the green energy range. It has occurred to me recently that this may also prove true in the Dr. J / Ahimsa debate, where Ahimsa recommends a Dean Ornish type diet. Both diets seem to have a lot (alot) of success in curbing chronic diseases. There seems to be little debate between these two diets and the traditional American McDonald's diet. Everyone with an ounce of sense knows that the corporate diet is poison (both alimentarily and politically).
I suspect that just as plants can utilize red and blue light but "spit out" the green, the human body is very successful with the Taubes and Ornish diets and does very poorly with traditional American diet. It does not logically have to be an either / or thing. Of course Ahimsa would throw in the ethical implications of the vegetarian diet, but that would be a whole other issue. Or as the Firesign Theatre would have put it, "It's not nice to eat a friend, my friend."
@El Gall,
re: retiring to the hills of Peru...
Andean snow pack is disappearing faster than credit thanks to climate change, so that is going to be an extremely water stressed region. Cue Starcade to explain the consequences, but I would not make long term plans there.
Re.: TIME LINE
Karl D. Would like to see it done quickly and get it over. (Massive bankruptcies)
Tim Geithner is doing everything he can to delay massive bankruptcies.
The speed of bankruptcies will determine the amount of chaos.
So far, Tim Geithner has won every round and extended the time line.
Some people have the ability of being good at expressing themselves.
Rather than doing a paraphrase ...
Here is one ...
Nothing, absolutely NOTHING can be done here to stop the conflagration that is to come. The timing remains a bit mysterious, but it is quite clear that this particular mathematical model is about DONE.
All the individual can do is to make a few preps, and as I have said before, get the hell OUT of any large city before TSHTF. Beyond that, forget about holing up in some Bunker or Doomstead somewhere and waiting it out. There is absolutely no place on earth you could really live and not have others who want what you got. Not even here where I live, and believe you me its sparsely populated. You'll never make it through without FRIENDS and a connection to your community.
Make your physical preps as best you can, but above all steel your MIND for what is to come. You will have CHOICES to make, and making the right ones can be the difference between life and death in a scenario like this one. Don't be afraid, be BRAVE. Have COURAGE. Your children depend on you. The Big Show is COMING to a Theatre Near You. Be READY for it.
When PEOPLE overtax the capacity of the environment to support them, they become a LIABILITY to the planet as a whole, and to each other really since they compete for the resources. On a biomass level, the planet can support only so many at one time, and that includes ALL living species. The more homo sapiens you drop on the planet, the fewer of any other species can occupy the same sapace at the same time. The decreasing biodiversity on the planet is directly correlated to the increasing amount of human biomass, that to me is pretty obvious. Pave Paradise, put up a Parking Lot. Clearly, every time you put up a Mall somewhere and knock down trees and an ecosytem to do that, you remove some other biomass from the planet.
Too many people IS a LIABILITY. I frankly see no NEED for so many people to live on one small planet as we have now, all it is doing is sucking the life out of the planet itself. WTF do we NEED 7B people living on this Blue Marble? They are ALL doing such wonderful things? Most of them are just taking up space and consuming resouces. I am pretty sure we could do quite well with under 1B people tooling around the planet. In fact, after Toba went Super Volcanic some 60,000 years ago, humanity shrunk to just about 10,000 human souls, or 1000 breeding pairs, depending on what analysis you read. In a world where resources were plentiful, those 1000 breeding pairs managed to copulate and bring us up to near 7B today. Is that a benefit or a liability in your opinion?
Not much left these days in terms of good resources, and which is the better outcome, a large population living in squalor and poverty, or a small population living in concert with the rest of the community of animals and plants that populate this earth? I'll go with a reduction in the human population here, and moreover I will VOLUNTEER to be among the first to go, if others my age and older will walk that path with me. I'll give myself up to the Bear to give a better chance for the children I care for to LIVE, and live with DIGNITY. Anybody with me here?
RE (from The Market ticker 2009-09-13)
====
Here is the shocking solution “... I will VOLUNTEER to be among the first to go, ...”
It’s not going to happen that way ... instinct prevents it.
I do not think that there is much doubt as to the final outcome, everyone is choosing a solution to avoid it.
Unfortunately, the option of leaving the planet is not one of them.
jal
El G,
I also emphasize the importance of eating organic and local.
"Organic is Healthier and More Nutritious According to a New Study"
http://www.organicconsumers.org/articles/article_19023.cfm
* * *
Wishing you a safe and joyous journey ...
Paz!
Ahimsa
VK,
Awesome posts!!!
Gracias!
@Dr. J;
"Yes - I think you could make a case that when the wealthy steal from the poor, that would be larceny, and when the poor steal from the wealthy, it is social justice."
This idea is stunningly wrong-headed. Plain daft bunkum.
By this metric, anyone who saves a penny, finds a nugget, or plants a row of beans on their own account is somehow guilty of immoral acquisition of wealth and ergo, fair game for the first hungry cricket who happens along to steal it.
How does that work?, once the poor man steals everything from the rich man and their roles are reversed, do they just swap the black hat and the white hat and go at it again?
Many people come here to TAE not to make a buck, but to try to keep food on the table and a roof over their heads. Mere prudence may save many of us from losing everything.
What is your opinion of those making provision for an uncertain future by forgoing today things they may need tomorrow? If any of them succeed, will 'social justice' be served by stealing from them?
Shame.
Marcus
Marcus
Are you intentionally conflating the issue about "stealing" from the rich? Dr. J, VK and others, are not referring to lower and middle class people who manage to save a few bucks and acquire a few survival items. They are referring to the oligarchs and oligarch wannabes with net worth of $5MM and up.
Did you help Karl Rove write his speeches? He didn't give you due credit.
"What is your opinion of those making provision for an uncertain future by forgoing today things they may need tomorrow? If any of them succeed, will 'social justice' be served by stealing from them?"
This is a different question than the one about illegal immigration and theft of medical care that sparked the initial discussion.
You do, however, raise again an ethical dilemma that has been touched on here in the past. If one makes provisions to survive the coming hardships, how does one deal with those nearby who didn't and are consequently suffering? I don't think there has been any consensus on that. I suppose if one had excess provisions, ie more than you need to survive, one would be morally obligated to share.
Conversely, if you found yourself unequipped and starving, for whatever reason, would it be morally reprehensible to try to take what you need from somebody who is better provisioned and not willing to share?
I am afraid I don't have a simple answer to these questions. I do, however, fear that in our lifetimes we may find out what are the practical answers.
“Hi. My name is Al Gore. I used to be the next president of the United States."
The view that lazy ignorant voters got what they deserved or are responsible for jack rubs me the wrong way. Go ahead. Vote in a U.S. election and feel empowered.
Really all the same in one key respect, national political parties need huge amounts of campaign contributions. For the first time ever in U.S. history, the candidates for president raised more than $1 billion.Democratic and Republican presidential candidates account for 95% those funds. “Mainstream” politics is pre- vetted by what is acceptable to large contributors. Campaign finance reform is a perennial go-nowhere issue.
Often voters view their choice thru the lens of television, radio, print or direct mail media. Much of the $1.17 billion in campaign spending flows there. The media is decidedly white, male and rightist; the whole complex often called a corporate “echo chamber”. AND THEN THERE WERE 8 25 years of media mergers (pdf) maps ownership concentration as of 2006.
For more candidate exposure, citizens could take in Presidential debates organized and sponsored by the League of Women Voters. A 1992 the Reform Party’s H. Ross Perot was allowed national television access thru debates. Thereafter, Perot garnered over 8% of the popular vote. The League of Women Voters yielded control to the Commission on Presidential Debates. The corporately sponsored Commission’s leadership is provided by Democratic and Republican party Chairmen. The new commission candidate selection criteria present formidable barriers-to-entry for third party debate participation and national media exposure of non-mainstream ideas.
U.S. voting is winner-take-all process. Old fashioned voting fraud involved preventing voters from reaching the polling place or loosing ballots. In 2000 the State of Florida prevented many ordinary citizens from voting, often in disputed or traditionally Democratic districts, using questionably compiled felon voter purge lists.
Candidates have won on popular votes but lost on the next Electoral College level. The Supreme Court has also chosen a recent President.
Hand counting of ballots was a local and state publicly controlled process. The way votes are counted has changed and is now generally a secret of the vote counting software. To assist handicapped persons, paperless touch screen voting machines, privately manufactured and using proprietary software, have spread nationwide. An electronic voting machine “industry” formed but it may soon merge into one privately held manufacturer. Public elections have been disconnected from publicly controlled tabulation.
Every step of the way election results have been managed. Go ahead, conclude your vote counts.
Greenpa, thanks for the good words on Norman Borlaug.
RE: "He knew a simple thing that an astonishing number of humans never learn; people do not exist in the abstract. Each one is real, with pains, hopes, fears, despairs- exactly like your own."
A man of the soil. Humble, from the root humus.
All the best, Wyote
Dr. J @ 1:19
Nuanced response to a one-dimensional argument--well done.
Happy Surfer:
While I would disagree politically with 95% of the posters here, I agree that the credit bubble (and, a bit later, Peak Oil) pose huge problems that will lead to an economic depression and a profound change in the way of life in developed countries, and a semi-Malthusian existence in any non-developed country which is dependent on a developed country.
You ask how can we agree on a solution if we have different notions of societal norms. But this is not really a relevant question. The reality is that the economic problems predicted by Stoneleigh and others are inevitable in kind (although we could argue about degree). We are too far down the exponential curve of debt as weighed against the linear growth of GDP, and all democracies lack the political will necessary to make the hard choices necessary to even attempt to prevent it.
So, use the time to prepare. Don't go overboard or freak out, but with each paycheck pay down debt, save money, and buy some things "whose value doesn't go to zero" as Karl Denninger would say.
TAE Right Winger
jal,
I admire KD's passionate oratory and I agree with his POV, but I don't understand why he's so sloppy with critical details that the most cursory googling would correct.
A few days ago I mentioned that his Y=1/X equation isn't parabolic, it's hyperbolic, and I was dissed for saying so, as if it were inconsequential. But a hyperbola has an asymptote, and a parabola doesn't - the parabola can indeed keep on going forever, while the hyperbola hits a wall. And that's what KD's argument is all about - The Wall.
Now he blithely tosses off a wrong date for the eruption of Toba - you too can in ten seconds determine that it happened 72-74kyr BP, not 60kyr. If I can't believe that easily verified detail, why would I believe any other quantitative claims that Karl makes?
All I'm saying is that I don't understand the inaccuracy - IMO it evinces a disregard for his responsibility toward his readers.
Hi Nelson!
I quoted "RE" to demonstrate that we all see the coming disaster, (anyway those on the blogs), but we all have different ideas of what the problem happens to be and what should be the plans to get us through those terrible times that are coming.
In my opinion, we will RESET and our preparations will not have been the right ones.
Wrong problem ... wrong solution
The longer that the present "gridlock" remains the more time that individuals have to prepare.
In the longer time line, 10-20 yrs, there will be a slow resetting. In that case, everyone can have hope that they will be the lucky winners, ( the 1 out of 7 survivor) and then they can hope that they will be positioned for a new kind of social and cultural reality.
It is probably impossible for the US "lawmakers", (and other democracies), to get out of "gridlock" and impose dictatorial directives to put society on a path of sustainability.
I would therefore, expect that there will be social structures similar to Haiti and others to be more like Cuba and other like the extreme of N. Korea.
The world need the soft touch of "The Architect"
jal
There's something peculiar about constructing a global reserve currency.
By the time it is fully established,
it would not imply global governance, it would demand it.
WASHINGTON, Sept 13 (Reuters) - President Barack Obama's new special interest rules are having unexpected consequences with some lobbyists giving up their formal registrations and finding other ways to influence policy as they try to maintain access to key agencies or hope for future government jobs. Congressional aides, industry executives and watchdog groups say the rules have also slowed Obama's ability to fill key government jobs, eliminated some highly qualified candidates and kept away some others who worry tougher "revolving door" rules could tie their hands in the future.
"The president's executive order isn't working the way they planned," said one top Washington industry lobbyist, who asked not to be identified, given the sensitivity of the subject.
He said he personally knew of several companies and non-profit groups who had filed papers with Congress terminating the lobbyist status of people on their payrolls after realizing that they were being shut out.
Reading the rules narrowly, even he could deregister and leave the actual "lobbying" to others on his staff, said the lobbyist, but quickly added he had no intention to do that.
http://www.iii.co.uk/news/?type=afxnews&articleid=7520599&action=article
The roots of the fascist state.
Gravity said...
There's something peculiar about constructing a global reserve currency.
By the time it is fully established,
it would not imply global governance, it would demand it.
We are already there.
The central banks (and their masters, the big banking institutions) of each major industrialized nation dominate their respective governments. Thus, the G20 central banks, acting in concert with duplicative responses, effectively now rule the world's economy.
@Dr J:
No, the issue of making a lifeboat isn't different from the original discussion. On the contrary, it is very much the same.
The U.S. has built it's own lifeboat. Other countries haven't. Your proposal, and that of many here, is to simply toss the poor in the U.S. overboard in order to justify a fake and false ideology which somehow crafts a higher sense of humanity in order to justify throwing the poor and middle class to the sharks. And signifcantly benefiting the rich in the process.
The trouble is, with your approach, the current lifeboat is going to sink. It's already taking on serious water.
Sorry, but I object to tossing our poor and middle class overboard in order to satisfy a fake, false and deadly ideal of noblesse oblige, which mostly benefits the rich.
And that's what the liberals here are advocating, no matter how they desperately try to avoid it.
@Gravity
One Global Reserve Currency to rule them all, One Global Reserve Currency to find them, Global Reserve Currency to bring them all and in the darkness bind them.
Apologies to Mr. Tolkien
anon 4:11 What is a liberal?
@ buzzard,
You've revealed to me a new way of describing credit-flows, in terms of pressurized sewage pipes.
Best of wishes, may you carrion prosperously in your new habitat.
My native language is dutch, btw.
Thought-provoking piece by Sharon Astyk:
"Start by Asking the Right Questions -- Thinking About the Terms for the Debate on Local and Organic Food"
http://sharonastyk.com/2009/09/11/start-by-asking-the-right-questions-setting-the-terms-for-the-debate-on-local-and-organic-food/
anon 4:11
What exactly do you mean by "The U.S. has built its own lifeboat." ?
What "lifeboat" are you talking about? Agricultural capacity within CONUS borders? A military that can seize overseas energy resources by force? And by "U.S.", do you mean the elites/plutocrats/oligarchs that control federal government agencies and private industry?
Greetings, jal:
I think I agree with every single point you make except one -
Who are the lucky ones? We all end up the same way, so beyond getting your 'three score and ten years,' what else is there to wish for?
The longest-lived have always had to witness all their old friends dying off, and for what? To add onto the Depends-wearing, mush-gumming, constantly aching days at the lonely end of life?
In the context of global dieoff, the coming horrors are of such an unprecedented magnitude that I can honestly wonder whether I'd want to be the last man standing, triumphant atop my pile of Spam and ammo, surrounded by the remains of what were once the very flower of humanity.
Meanwhile, I continue to reflexively carry out the survival prerogative, willfully blind to the fact that one man's preparations are another man's hoarding. Every cup of rice that I pack is one meal denied to someone who can't compete for it in the marketplace.
"You've revealed to me a new way of describing credit-flows, in terms of pressurized sewage pipes."
Oh Jeez, I feel simple.
But of course.... All that sawing and wrenching, it was all a metaphor all along!! Now you tell me!
Migratory habits are a necessary part of adaptive fitness in human populations.
There are no longer any places to migrate to which have not yet been colonized by sedentary populations.
National boundaries and land-based property concepts are recent inventions from an evolutionary perspective, which are maladapted to ingrained migratory behaviours.
This could be amplified by some kind of shifting optimism-bias, so certain subsets of population will consider it more safe to stay put, while others would naturally seek out resources and opportunities elsewhere.
But we should consider what (il)legal immigration costs the U.S, and what it saves Mexico, for instance.
It could be argued that certain countries can only remain stable and economically viable if they send the surplus masses to richer lands.
Although this could promote higher population growth in the home countries, by alleviating pressure on the local resource-base,
the actual immigrants might reproduce more slowly in a richer country, leaving a net benefit to immigration under certain conditions, if measured with a wider socio-economic boundary.
Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman
Sept. 14 (Bloomberg) -- Joseph Stiglitz, the Nobel Prize- winning economist, said the U.S. has failed to fix the underlying problems of its banking system after the credit crunch and the collapse of Lehman Brothers Holdings Inc.
“In the U.S. and many other countries, the too-big-to-fail banks have become even bigger,” Stiglitz said in an interview yesterday in Paris. “The problems are worse than they were in 2007 before the crisis.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=a7UTn7JFw1qk
Gee, what a surprise.
Had Bloomberg's readers been reading TAE since the banking crisis, they would already know that.
However, since neither Illargi or Stoneleigh have a faux-Nobel in Economics to their credit, they wouldn't have listened anyway.
anon 4:11:
"The U.S. has built it's own lifeboat. Other countries haven't."
Okay, if you want to talk about this in those terms, consider that, if this is indeed what has happened, it was done at the expense of the rest of the world. Using a ponzi fiat currency to rob the world of its resources the US has been able to consume at five times the global per capita rate and squander this universal birthright on Hummers, McMansions and cheese-doodles. Now that those not on board the US lifeboat are going to experience dire hardships as a result of this wanton larceny why should they not try to reclaim some of that wealth to improve their odds of survival? Do you think it is ethical that Americans should be able to grab the wealth of the world and then shut the door when the consequence of that profligacy begins to manifest as a humanitarian disaster? It would seem to me that, under those circumstances, those outside the US would have every right to try to climb into the lifeboat that was built at their expense.
"How does that work?, once the poor man steals everything from the rich man and their roles are reversed, do they just swap the black hat and the white hat and go at it again?"
Hand over all of your lupins!
Gravity
It is always good for one's humility to find someone who learned English as a second or third language and speaks and writes it better than oneself.
The pressurized sewer pipe analogy to macroeconomics is best view as a dual connection between the major banks and the Fed where sewage is uploaded to the Fed and treasuries downloaded to the banks. I would love to take a supersawzall to it, but once again I would have to go running to the shower.
David; I think "Fauxbel Prize" could work nicely.
Greenpa said...
David; I think "Fauxbel Prize" could work nicely.
HaHaHa Greenpa,
Excellent choice of juxtaposition!
You have many talents!
Eagle Inazzo - "I would love to take a supersawzall to it, but once again I would have to go running to the shower."
I reckon we'll all be covered with it soon enough. Or, it may just happen as a long nasty trickle.
Geez... it took me all this time to figure out what "trickle down" economics was all about!
Gravity - "National boundaries and land-based property concepts are recent inventions from an evolutionary perspective"
Interesting. I once read a book written by a motorcyclist who rode his BMW bike, "Ganesh" around the world--ferried of course to each continent. As I recall he made a persuasive case for the nomadistic life.
Maybe the collapse, if it is as severe as most are envisioning it, will render a new era--start the cycle over again with a scattered remnant of natural nomads.
Jal,
What is:
RE (from The Market ticker 2009-09-13) supposed to refer to? I see absolutely nothing on today's Ticker that relates to your posting.
Merrywhether
http://www.tickerforum.org/cgi-ticker/akcs-www?post=110509&page=3
post by Reverseengineer
jal
@Dr. J:
"it was done at the expense of the rest of the world."
And you're overlooking that the rest of the world was pretty much a very active and eager participant in the scheme. And generally received tons of aid to boot.
But you haven't addressed the simple fact that your solution will swamp the lifeboat, in the process of trying to save others. Solve that problem, and you might be on to something. But you can't.
Dr. J
"BTW - back in my construction days, when I worked in the tar sands, actually, I met a Chilean pipefitter (fancy name for plumber) and he told me that when he traveled, as soon as he got south of the Mexican/US border he would acquire and carry a revolver."
Carrying a gun in urban settings in a country in which you are not a citizen is a very dangerous business vis-a-vis the law.
Anonymouse 10:38
"And generally received tons of aid to boot."
I would rather take a ton of arsenic up the wazoo than a ton of that aid. How naively conventional!
anon 10:38 - I don't know what you mean when you refer to "my solution". Frankly, at this point I don't think there is a solution. My point is that extracting vital resources from the rest of the world in support of wanton frivolity and then shutting everyone out when times get tough is not a moral high ground position.
el g:
"Carrying a gun in urban settings in a country in which you are not a citizen is a very dangerous business vis-a-vis the law."
Well, he was a pipe=fitter after all.
The U.S. government is borrowing money to help debt-laden consumers borrow money to purchase an asset they likely don't need. The sheer stupidity behind such a government program is literally mindboggling. Meanwhile, in return for their generous bailout money, the bankers continue to jam taxpayers with higher credit card rates and more stringent lending standards
http://www.zerohedge.com/article/guest-post-boom-bust
LMAO
"The U.S. has built it's own lifeboat."
hahaha
WTF?
The U.S. has built a puny faux imperialist 'empire' by historic standards.
That's it.
200 years of exploiting a virgin continent and murdering it's natives to enrich the top (1% of population) of bloodsucking financial Mafia?
That's an accomplishment?
hahaha
The Romans would have laughed at the very notion of the U.S oligarchs fancying themselves as an empire.
More like a colon spasm in historic time scales.
The U.S. will shortly be a slumdog gulag of formerly middle class paper pushers trying to grow potatoes in 2" deep, played-out suburban 'topsoil', with sticks no less (all the cheap Chinese shovels will have stop coming into the country by then.)
I would hardly call that pitiful portrait of the Suburbian Wasteland a 'lifeboat'. Maybe a Death Ship.
As far as I can tell, the US economy is going for the 'Viking Funeral" option.
In the context of Elliott Wave Theory, one didn't see these protests during the Primary wave 1 decline from October 2007 to March 2009. But now near the peak of a Primary wave 2 we see social mood starting to erupt. This will not be the last march on Washington. That you can count on. And they will grow bigger. And one can easily predict that the government and big media (they will ignore reporting them as much as possible) will not be accommodating to the concerns of these protests. In fact one can easily predict that the government will dismiss or push back at these protests and cause even greater backlashes.
How can I confidently say this? EW theory wave structure predicts that Primary wave 3 down will be even greater in force than Primary wave 1 as wave 3's are usually the strongest wave in any structure. So EW theory is predicting that negative social mood will get much worse.
Its safe to say that the general political makeup of the protest crowd was a Republican/conservative/independent leaning mixture. But I also think its safe to say that the opposite side of the political spectrum is seething underneath too in social mood. Maybe not at the same types of things this crowd was mad at, but do you know any truly happy Progressives/Democrats at the moment even though all three branches of government are controlled by one party?
So the country as a whole is in the opening stages of a greater display of negative social mood. Against each other, against the government. Yet again this display is near the peak of a great rally in equities. Social mood turns first - markets will follow.
http://danericselliottwaves.blogspot.com/
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