Thursday, January 19, 2012

January 19 2012: Don't Be Fooled : Nothing's Priced In

National Photo Co. Bond Vault 1914
"Treasury Department, Office of Comptroller of Currency -- bond vault. Contains bonds to the value of $900 million securing government deposits and postal savings fund"

Ilargi: Double treat today: a thourough big picture interview with Nicole by KMO at C-Realm, and Ashvin doesn't think there's much priced in in equity markets at all.

Infinite Rehypothecation
An interview with Nicole Foss


KMO welcomes Nicole Foss (AKA Stoneleigh) of The Automatic Earth to the C-Realm to discuss the need for re-localization; something which central authorities will work to quash lest it interfere with the conveyance of wealth from the periphery to the center.

Nicole explains what she means when she describes cash as a pile of unmade choices and why she cannot offer her uncomplicated support for political movements like the Tea Party or Occupy Wall Street. She does voice her strong support for permaculture and for restoring soil fertility.

Ashvin Pandurangi:

Don't Be Fooled: Nothing's Priced In

I’m not a technical analyst or a fundamental analyst or any other type of equity market analyst. What I am is just a guy who likes to think he can spot completely nonsensical propaganda when he reads or hears it.

You know, the type of non-stop propaganda that attempts to manage perceptions/expectations and convince "investors" that, while things are obviously very bad in the real economy, everything is still just hunky dory in the wonderful world of equities.

Case In Point
Some mainstream market analysts chimed in after the serial S&P ratings downgrades of nine Eurozone countries, and specifically the one-notch downgrade of France from AAA to AA+ (ratings outlook still negative), to say that the market had already "priced them in" and therefore they are really no big deal. S&P had put all of these countries on negative watch back in December before the latest and unsurprisingly innocuous EU Summit, so the downgrades were no surprise.

Here are just two examples of a very pervasive and perverse logic, presented by The Telegraph:
S&P cuts ratings of nine eurozone countries: reaction
Fabrice Seiman, head of Lutetia Capital, said:

"S&P is absolutely right. France is paying the price of 30 years of irresponsibility in public finances. French politicians on the right and on the left fell short of the job by not taking measures to reduce  spending."

I think this is already priced in. There should not be any sizable reaction, but there could be a technical reaction on the Franco-German spread. It should be limited to the long-term and if there is a reduction in spending."

Bill O'Grady, chief market strategist at Confluence Investment Management, said:

"If France had been downgraded more than one level it would have precipitated a crisis. This is not good but it was anticipated, baked in. For oil it is probably a neutral event. If it raises concerns about a worsening economic environment it would be bearish."

Ashvin Pandurangi: That logic does sound appealing on the surface and many others like to parrot it, but the first question to pop into my mind was this – how can the market "price in" very significant developments in Euro sovereign credit markets by steadily increasing in valuation since they became aware those developments would occur?? Since the S&P put a bunch of EZ countries on negative watch on December 5, 2011 and the EU Summit on December 9, the S&P500 has risen almost 6%.

That’s a boat load of downgrades the market appears to have priced in over the last month while very little "positive" news has come out of Europe. Now I’m confident that the initial reaction to my question above would be, "that’s a really simple and stupid question to ask!". Fortunately, there are several great analysts out there who have reached similar conclusions about these equity markets, which have allegedly "priced in" everything under the Sun, and have provided us with slightly more nuanced arguments than my own.

The U.S. Dollar (and Treasuries) has been increasing in value alongside U.S. equities, so the pundits should find it very difficult to explain the upwards "pricing in" market action of the last month by saying it is a nominal increase of shares priced in dollars. What we have is a very significant divergence between the dollar index and equities, as Charles Hugh Smith outlines in his piece, A Useful Fiction: Everybody Loves a Melt-Up Stock Market, and one that must close in the near future. The following charts of the dollar index ($DXY) and 5-year Treasuries are from M3 Financial Analysis:


The truth is that the very notion of the market "pricing in" events as the investor collective becomes aware of them is flawed. In the comprehensive TAE classic of 2010, Fractal Adaptive Cycles in Natural and Human Systems, Nicole Foss delves into Robert Prechter's theory of "Socionomics" (among other things) and how it can explain market valuations as a function of endogenous factors, such as the collective mood of investors, rather than exogenous events relayed by "the news".

Bob Prechter's socionomics model combines Elliott's observed fractal patterns with an understanding of human herding behaviour, comprising a comprehensive challenge to prevailing notions such as the Efficient Market Hypothesis by reversing causation and recognizing the role of emotional/irrational behaviour as the prime market driver. While the real economy demonstrates negative feedback loops, finance is thoroughly grounded in positive feedback.

Ashvin Pandurangi: Mish Shedlock also touched on this concept in a post earlier this week. He illustrated that, at best, the market should be viewed as a contrarian indicator for future economic trends due to its function as a gauge of extreme sentiments, and, at worst, it shouldn't be viewed as an indicator of anything at all.

Cherry Picking Timeframes on Alleged Leading Indicators; Big Change In LEI on January 26
"The stock market is not a leading indicator of the economy. Rather, the stock market is a coincident indicator of sentiment towards equities.


Far from being a leading indicator, on an absolute basis the S&P has a perfect track record of peaking right before or just as a recession starts. This is just as one might expect from a gauge of equity sentiment which tends to peak right before a downturn in the economy (with everyone extrapolating good times forever into the future).



On a percentage change basis, the S&P 500 is not leading, not lagging, and not coincident. Instead it is completely useless mush."


Ashvin Pandurangi: It's not just the "fringe bloggers" drawing these conclusions about the market, but also such "reputable" financial institutions as UBS. Granted, the well-intentioned bankers over there also point out that the French downgrade, among others, was expected and shouldn't affect near-term credit spreads too much. Instead, they choose to focus on the effects it will have on the state of realpolitik in Europe’s core, and how that is certainly not something which is "priced in" at all. Indeed, only market shills and fools can even pretend to separate the two (finance and politics).

UBS Explains Why AAA-Loss Is Actually Relevant
"France has not only lost its AAA status. Critically, France has lost AAA status at a time when Germany has not. France also retains a negative outlook against a stable outlook for Germany, compounding the distinction. The relative decline of France’s credit rating is something that has potential political implications.

There are parallels here to the relative positions of the UK and the US in 1949, in the wake of sterling’s devaluation against the dollar. The devaluation was simply a confirmation of economic reality, but the visible confirmation of that shift in relative economic reality served as a defining moment in the shift of the bilateral relationship in political terms.

Since the foundation of the Coal and Steel Community in 1951, the history of (continental) European politics has been essentially a story of France and Germany holding each other in check. Indeed, this was the explicit aim of the ECSC’s founders. With the downgrading of France relative to Germany, there is now a de jure as well as a de facto inequality between the two states. The ability of France to act as a counterbalance to Germany in economic decision-making has been compromised.

In the wake of the downgrade of the EFSF, it is clear that the actions of S&P have elevated the role of Germany (and perhaps, to a lesser degree, the Netherlands) in any collective economic decisions within the Euro area. Any economic decision that requires money to be spent will require wholehearted German endorsement if rating agency determined credit credibility is to be maintained. The bargaining power of Germany in the economic councils of Europe has been correspondingly increased."

Ashvin Pandurangi: So if the equity markets are "pricing in" anything, it's the pure hope that all of these downgrades of countries, banks and corporations will continue to be glossed over by bond markets, that political/economic imbalances in Europe haven't been exacerbated, that the Greek government and its creditors aren't helplessly struggling to reach a "voluntary" debt reduction deal before a technical default in March becomes inevitable, that China/India aren't facing "hard landings" and that the U.S./U.K. economies will not be dragged down by their own housing markets, corporate [lack of] earnings, unemployment trends or any of the above.

Some people will tell you that the only thing the markets need to keep their manic phase intact is the inevitable QE money printing that the Fed will officially announce, which has conveniently been "just around the corner" for almost a year now. Despite those consistent predictions of QE3, I made clear that I didn’t expect the Fed to relent in 2011, and many of the same financial and political reasons underlying that expectation still stand. The primary reasons being the conundrum reflected by the fact that the S&P is still hovering around 1300 (and oil around $100/bbl), which makes the marginal benefits of QE very slim, and the politically volatile situation in the run-up to November’s elections.

On the other hand, the financial threats from the Euro crisis and a strong dollar (weak euro) have clearly intensified over the last few months, and the ECB is even more constricted from printing than it has ever been (at least for anything other than sub 3-year sovereign paper through its indirect LTRO, which still doesn’t reflect net cash entering EZ bond markets). Perhaps these developments will finally convince the Fed to "pull the trigger" on QE3, but then many questions still remain – how many trillions are needed to boost "risk appetite" for more than a few weeks and what happens when those trillions are perceived as "not enough"?

Like I said at the beginning, I'm not any sort of market analyst, but there do seem to be a whole slew of developments starting to weigh on collective investor sentiment right now, which will only get heavier in the upcoming weeks and months. No one can tell you that any of these negative and ongoing developments herald an imminent market crash or how exactly they will impact shares. What I can say with confidence, though, is that none of them are insignificant bumps in the road. They certainly did not "remove any uncertainty" from the markets and they have in no meaningful way been "priced in" by these markets either.


el gallinazo said...

The Anonymous

My objection to your analogy was not primarily based on it involving a non-false flag terraist attack. (Now that is a minimal response).

The Anonymous said...

What was the objection then?

--- said...

OK, finally - the reason I posted Fred's quote - whom I don't always endorse or even finish reading - is because the value of every form of abstract wealth you can name is predicated on the continuing military primacy of MAD and the west. One chink in that picture and all values are doomed.

Which is why I was trying to say to lay off the authors here. They are really portraying a best case scenario. This is really light reading.

Any military instability and it will all go much, much worse than anything I have ever read here.

Abstract wealth only has the value it does because the cowards that be say so. Any day now, other powers that be could surprise them.

All empires go. The value of their debt instruments goes right down with them when they do.

AllGood4All said...

I appreciate the clarity, Ash, thank you.

I have two questions and hope you and others are willing to address:

1. (i asked this a couple posts ago, but haven't found response - sorry if I missed it) This seems counter to the "flight to USD safety" phenomenon and I'm wondering what you think is happening here:

2. What is the risk to shorting equity markets (as long as shorting is allowed)? In other words, if equity markets decline precipitously, will people holding short positions profit enormously, or might they be deprived of profit (for reasons I'm hoping you'll elucidate)?

Thank you!

--- said...

I had a 45 minute rodeo with Blogger trying to make a different version of my previous comment.

Who says [Censored] is not alive and well. Blogger spat it out every time - first time I have had any trouble posting a comment.

Sorry to have put it into peacemeal over two posts.

Robert said...

I would be curious about the investment opinions of TAE cognoscente. How should a debt free individual invest $1,000, $10,000, $100,000 or $1,000,000 etc. It is a given that there will be an emphasis on T-Bills and cash. But should there be diversification? If so, what and how much?

Robert 2

Ash said...


No time to answer now, but I'll be back online later and will address your questions. In the meantime, perhaps others will as well.

Lanterne Rouge said...

The individual should invest 100% of their cash in making sure they are not individuals. Then it makes sense worry about the rest of their money.

el gallinazo said...

The Anonymous said...
What was the objection then?

You are smart and I think you know why it is so faulty. I am a slow typist (as well as thinker) and I just don't want to put in the effort elucidating with this one.

AllGood4All said...

Below, please find an invitation to a brainstorming session. Everyone's participation appreciated:

So, it's been really tense lately, feeling like "the other - bigger - shoe" may drop at any moment... It sometimes seems that "Black Swan Events/Phenomena" may happen any time, precipitating - and being reflections of - massive social, political, and economic collapse. So much of what is described to then follow involves enormous suffering for the vast majority of people (and other living beings) on Earth. I do feel it is practical and honest and useful to consider these possibilities, and I am grateful for this consideration.

At the same time it also makes me curious (and welcoming) of another focus of possibilities. How about Black Swan Phenomena that precipitate, yes the collapse of a decrepit system, but also result in enormous increase in the personal, practical, social, cultural well being and thriving of (hopefully all) living beings on Earth?

So, I'm inviting everyone who's willing, to engage in a brainstorming session. The question:

What are some Unexpected Phenomena of Large Impact (we could call them "Blue Swans") that could precipitate both the ending of the oppressive/dysfunctional economic/power systems AND simultaneously and consequently precipitate and reflect the tangible manifestation of life- ,happiness-, and well being- serving social/economic/political reality for a very large number - and hopefully eventually all - people and beings on Earth?

(Some hoped for "ground rules" for this exercise: Humor, hope, practicallity, impracticallity, realism or not innovation, and outlandish multidimensional couldn't possibly happen in the "real" world ideas are all welcome! My experience is that brainstorming is generally served by a spirit of openness to a diversity of fresh and imaginative ideas with a minimum of "filtering". The (necessary) evaluative/critical phase can come after all the brainstormed ideas are out on the table...)

Thank you!

The Anonymous said...

El G. while I appreciate your take on my smarts, in all seriousness, I have a blind spot here.

My larger point was, if you really want to do some good, and be helpful to your readership (or your friends & family or whatever), you have to be picky about where you choose to spend your "credibility capital" with them, especially if they do not share your outlook as to various risks.

Even if you have a generally gloomy long term outlook (as I do) you have to choose your spots when to speak up. If I was still in in "pound the table, screaming with my hair on fire" mode as I was a few years ago, none of my friends or family would still be listening to me or believing in me anymore.

From 05-07, as I increasingly became aware of the risks discussed here at TAE, I took them very seriously, and may have mentioned them from time to time amongst polite company, but otherwise, I didnt say much, largely holding my tounge.

During 07-08 as those risks started to show (IMO) major signs of stress, I started speaking up more and more often. Starting in early 08, I started pounding the table, telling whom I could what I thought the potential risks were, the potential consequences, and what do do about it. Since this "pound the table" screaming with my hair on fire outlook was far outside of my usual persona, alot of my peer group took heed of what I said, and generally appreciated my advice.

Now since early 09 when the oft maligned can kicking starged. Remember "green shoots"? I no longer feel anywhere near as confident about the future as I used to. Sure I still see risks out there...alot of them. However, I no longer I talk much about them in polite company. TAE is my guilty pleasure and (hopefully) early warning system.

By largely shutting up and doing alot of hedging about the risks out there amongst friends and family since early 09, I have built up a very large reservoir of "credibility capital" that continues, intact til this day.

Now, if I spent all my time from early 09 til now regularly pounding the table, spilling my guts with cocksure conviction about what "WILL happen SOON", I would quickly burn through all that political capital as not much has happened that affects their lives. Had I done that, nearly all my credibility would be at stake and risk being labeled "just another permabear" not to be taken seriously.

However, if I (or really anyone) truly want to be of help to others, you have to be very very careful about where and when you spend whatever credibility you have earned.

NZSanctuary said...

Orwell would be impressed.

At the request of US authorities, New Zealand police raided a prominent home this morning and arrested people based on allegations of copyright infringement. Related raids happened in other countries, with 10s of millions in assets seized. I won't go into details, but Megaupload has been pissing off some big players in the entertainment industry. Story here. The company's proceeds are described as "criminal". Of course, similar raids have not taken place at bankers' homes around the world.

The police are quite clearly enforcers of corporate will, first and foremost.

Our armed offenders squads have recently been in the news for the increased number of operations they have been involved in over the last year or two. More violent crime? No, but that is the impression the headlines and lead paragraphs give. When you actually read the story in full it turns out they are accompanying police in more drug raids and other raids where there could "potentially" be firearms: i.e. that could be any kind of raid.

GreenWalker said...

My take on the TAE criticism.

You've got to grow or shrink, there's no in-between. No such thing as stasis.
TAE's insights about finance and the world at large grew for about a year or so, but after that they plateaued -- nothing new to add. And nothing plateaus in real life, it starts shrinking -- through endless unnecessary repetition.

The repetition diminishes you. Each new post subtracts rather than adds to the previous -- like negative GDP growth from taking on more debt.

Just reference your past writing and tell people to get to work making a new life.

Matt Savinar reached this conclusion over a year ago with his old forum. He shut it down and told people to move on -- you either got it or you didn't, but nobody got anything more at of further circular discussions.

I'm surprised TAE hasn't seen the writing that's been on the wall since around 2010 or so.

NZSanctuary said...

GreenWalker said...
My take on the TAE criticism.
You've got to grow or shrink, there's no in-between. No such thing as stasis.

That's modernity speaking.

The concept you are trying to articulate is "change". It is the one rule of life. But don't change for the sake of change alone. Also, don't think change necessarily means growth or contraction, although it may well do.

jal said...

@ AllGood4All

I find out my info from ZH, MT and pass it on here for others to evaluate.

@ The Anonymous


nothing has changed in my immediate region.

I also keep an eye on
Vancouver Real Estate Anecdote Archive

since this blog is probably going to see a down turn first.

Ash said...


As mentioned in the article, we are seeing a lot divergences in this market over the last month or two. ZH itself points this out in its initial "treasury dump" article at year's end.

Foreigners Dump Record Amount Of US Treasurys In Past Month

"With year end fund flows making absolutely no sense for the most part, thank you global central planning, as the euro plunges and the market refuses to follow, with risk assets rising on speculation the ECB (and/or Fed) are about to restart printing yet gold collapsing (on one or two hedge funds liquidating, yet econ PhDs already rewriting their theses on why the "gold bubble has popped"), and finally with Treasurys soaring to near all time highs (10 Year under 1.9% yesterday even as stocks surged on data from the National Advertisers of Realtors, aka NAR, of all fraudulent and corrupt entities), here is the latest observation to make the confusion complete. As the Fed's critical H.4.1 weekly update shows (which is leaps and bounds more accurate than the Treasury's TIC international fund flow data), in the week ended December 28, foreign investors sold the second highest amount of US bonds in history, or $23 billion, bringing total UST custodial holdings to $2.67 trillion, a level first crossed to the upside back in April."

After a few more outflows from "treasury securities held in custody" to total $85bn, ZH unsurprisingly asked whether "it was time to get concerned", presumably about a very big spike in treasury yields. What the data doesn't tell us is who exactly is selling the paper, what maturities they are selling and, of course, where the money is going. Most people probably automatically assume its foreign governments dumping treasuries, but that's not certain at all. It could be private banks selling their best performing securities to raise cash or re-allocate. It's also possible that China/Russia have reduced their exposure for a variety of reasons, such as "sending a message" in light of rising geopolitical tensions. Frankly, we can't really know until more time passes and the TIC data is published. But none of this would lead me to believe that "it is time to get concerned" about U.S. Treasuries, and most certainly not about short-dated paper. If the Euro credit markets remain weak or worsen as well as global equity markets, I think we all know exactly where much of that capital is headed, and I bet there are more than a few vultures out there waiting to make a handsome profit on the dollar squeeze.

Ash said...


There are a lot of risks to "shorting" stocks, especially if you are short selling (shorting "naked" or borrowing shares to sell them). The safest is way is through purchasing puts on specific stocks or indexes, because that limits the amount you can lose to a small fraction of the position's value. You have to set aside the maximum amount you are willing to lose, and then have the discipline to stick to that cap no matter what. I'd say there is some significant risk of your funds being frozen/stolen in the event your broker/counter-party goes bust, so that should be considered too. Frankly, I think it's a mistake to get into short-term speculation unless you know exactly what you're doing, i.e. how all of the various investment products work and what all the risks are.

Gravity said...

The Critique of Practical Treason.
"H.R. 3166
To add engaging in or supporting hostilities against the United States to the list of acts for which United States nationals would lose their nationality."

What is described here is the crime of treason, it can only be treason as constitutionally defined in article III section 3.
No other crime comes close to this description. If it is not specifically named as treason, what is described here cannot be a crime or criminal fact.

It is a description identical to that used for the NDAA indefinite detention clause and extralegal killing procedures.

The vital difference between actual treason and this description is that treason is a criminal fact which must be proven by conclusive evidence.
This description deliberately avoids the specification of any actual crime, since crime entails due process, the process to establish guilt of treason is specified in the constitution.

"Section 349 of the Immigration and Nationality Act (8 U.S.C. 1481) is amended— by adding at the end the following:
'engaging in, or purposefully and materially supporting, hostilities against the United States.’; the term ‘hostilities’ means any conflict subject to the laws of war."

This difference becomes evident upon inspection of the existing laws to be altered:

"(7) committing any act of treason against, or attempting by force to overthrow, or bearing arms against, the United States,...or to levy war against them, if and when he is convicted thereof by a court martial or by a court of competent jurisdiction."

Section 349 of the Immigration and Nationality Act (8 U.S.C. 1481) already specifies the precise crime of treason and conviction thereof as grounds for expatriation. As one might expect, only a select few political crimes or evident military or representative disloyalties may suffice as grounds for the severe penalty of expatriation.

Treason is therefore already specified in the immigration and nationality act, the intent of HR3166 is now to add to the list of expatriatory acts, the following description:
"engaging in, or purposefully and materially supporting, any conflict subject to the laws of war against the United States."

This is structurally equivalent to treason, except that this is a semantically misdirecting description of a noncrime, which happens to be identical to treason. Because the crime is not named, the description does not refer to any existing crime itself, but to a secret suspicion of crime the expatriation panel might entertain towards any citizen.

It is therefore not a crime which is to be listed there as novel grounds for expatriation, because the crime as described is already listed. The mere secret suspicion of such a crime without any legal process may now suffice as grounds for the arbitrary destruction of the citizenry in the following ways:
A citizen may be stripped of all enumerated rights inherent to citizenry;
a citizen may be banished to the void beyond the stars until the end of hostilities;
and a citizen may be murdered in secret, for nothing, without any accusation of acts specified in legal concepts, without criminal definitions of any kind.

This short piece of legislation HR 3166, because of its singular intent to destroy the legal concepts of protected citizenship and due process, is clearly seditious in nature, and besides it being maximally unconstitutional, destroying all civil rights at once, the legislation itself is conclusive evidence of intent to commit sedition on the part of its sponsors.
The type of sedition which would be committed by politically enacting HR3166 may actually suffice as grounds for expatriation.

The Q said...


The past few weeks I have had a few interesting conversations with a very intelligent 20-something with an interesting mixture of ideas, some moderately on the "left" and some moderately "right" (some attitudes a bit surprising given the military and law enforcement connections she has always had in her family alliances)

I mention it to you because she brought up the issue of her "house-poor" (her words)friends in Vancouver buried in debt with no money to enjoy anything in life other than their house. She is well aware that real-estate is overvalued and saw some of her relatives in the military lose money when forced to sell at bad times. (And incidently, others that lost a small fortune after the meltdown 10 years ago[NORTEL])

She also has many of the bourgeoise expectations of her boomer parents' generation, but has been working contract jobs with no benefits, and doesn't see how she can achieve the stability to obtain all this and raise a family, despite her husband's rock solid job in a prestigious[or formerly so;)] organization.

There seems to be a growing awareness among (some of) even the mainstream youth that they are not likely to be able to ape the lifestyle of the aristocarcy the way their parents have (and are determined to continue to do so at any cost.)

Ash said...

Robert 2,

"But should there be diversification? If so, what and how much?"

If one has enough excess liquid savings (cash, cash equivalents) and expected income (which should be considered very carefully) to cover expenses (including physical preps) for quite some time, then I would certainly allocate a modest % of savings towards physical PMs, which means nothing but the metal in your direct possession. People with a certain degree of maneuverability across borders may have a few more options to diversify (into other "safe haven" currencies, for example), but most people are not in such a position. Land is also an option for those who can pay cash, secure it and hold onto it for awhile without needing to sell, perhaps using it productively during that time.

Ash said...

S&P 500 Profit Season Has Worst Start in Years: Chart of the Day

"U.S. companies that beat analysts’ earnings estimates are an exception, rather than the rule, for the fourth-quarter reporting season getting under way.

Only 47.1 percent of companies in the Standard & Poor’s 500 Index that posted quarterly results between Dec. 1 and yesterday exceeded the average projection, according to data compiled by Bloomberg. Citigroup Inc. and JPMorgan Chase & Co. are among those that trailed estimates.

As the CHART OF THE DAY illustrates, so-called positive surprises have surpassed 50 percent at a comparable point in every other quarterly reporting period for the past four years. The previous low was 51.5 percent in the third quarter of 2008, when a global financial crisis was taking hold.

“Early reporters’ results” are one of two reasons to expect the current earnings season to be disappointing, Thomas M. Doerflinger, a strategist at UBS AG, wrote yesterday in a report. The other is that many companies are likely to cut estimates for this year.

Doerflinger, based in New York, drew the latter conclusion from a survey of 406 UBS analysts worldwide. The results, which were published last week, showed only 7 percent of the analysts predict companies will raise their projections. Forty-six percent were expecting reductions.

Earnings estimates for S&P 500 companies “should fall substantially” in the next month as they provide more precise guidance about their prospects, the report said. Doerflinger is anticipating a combined $99 a share for 2012. That’s the lowest projection among 11 strategists in a Bloomberg survey."

Erin Winthrope said...

Prsented without comment:

TAE # of posts--updates/year

2008 = 397
2009 = 324
2010 = 152
2011 = 135
2012 = 6, extrapolated to 108

Anyone want to plot these and do some Elliot Wave analysis?

jal said...

@ The Q

Your anecdotal story is true and yet most still want the upper middle class lifestyle with incomes that cannot support that lifestyle.

As I've said before, parents of boomers only needed the income of the one parent to get a house etc.

Boomers needed both of them working to achieve the same lifestyle. That's what 2% inflation did to them.
In vancouver, you need the income of 4 people to be able to buy a house. Its called a mortgage helper.

Those 20 something still want better but the inflation, (bubble), in housing does make everyone "house-poor".

My advise is to look at

and to pay less than assessment price for a house and you will help to break the bubble.


Blackbird said...

@ Erin

Ouch! Actions do indeed speak louder than words.

Patrick said...

yesterday el gall said:
I think the most interesting aspect to this charade [energy hype/fraking] is **why TPTB are pushing it. Like the pension fund fiasco, it is one way of extracting some serious dumb money, but that doesn't explain the entire disinformation campaign.

Here's what I think using the tar sands as an example: the tar sands net a negligible amount of net energy mostly converting NG to oil. Add in things like the investment in equipment and infrastructure and it might even be negative net. So, why do it. I think it is directly analogous to the way the Japanese whalers and other fishing fleets worked. They knew the resource would run out if they used their enormous technology to fish but they didn't care. Their plundering version of capitalism says, "make as much as you can as fast as you can--deplete it--then move on to the next." Same with the tar sands and fraking.

But people are suspicious and fearful of the damage from the tar sands and fraking so it has to be sold to the masses.

Re: the tar sands I keep hearing about all the long term benefits. They know damn well it's not long term. And how much do you bet they'll actually clean it up afterwards? No, that's another one for the dumb citizen/taxpayers.

mike said...


agreed, now will you go over and tell that to turner at greaterfooldotcom, after 4 years of being wrong he still believes hes right.

Stoneleigh said...

Erin Winthrope,

Our posts have grown in complexity and therefore in the amount of work they require. In the first year, Ilargi used to work 12 hours a day, 7 days a week, 365 days a year on TAE. Are you surprised that was not sustainable? There are only 3 of us, we are covering more big picture ground than anyone else out there and we do other things besides write and research (like travel and lecture). We never have days off. Would you be prepared to work on that basis?

I think you're being more than a little uncharitable in your comment. We provide a public service that no one has ever had to pay for. It's not like we are paid to do what we do. We do this to help people, because we care, and we provide content you wouldn't find anywhere else on the net. If you don't find it valuable, no one is making you read it.

Patrick said...

The Anonymous

Actually TA I don't think it much matters what you can or can't tell people. It's pretty clear by now that only a minuscule percentage of people are even aware of what's over the horizon and for sure the body politic is doing nothing by way of mitigation.

Thinking one can prepare for the calamities ahead is, I think, a delusion. Seeking to profit from it is distastefully delusional.

gogoog - said...

Who or what generates any pressure to "make bond agreements" work?

Little is said about the influence that drive these charades.....

Josh said...

@ Stoneleigh,

"we do other things besides write and research (like travel and lecture)."

Sounds like a sweet gig to me. I'm out of work, can I join? I promise to work hard.

Josh said...

@ Stoneleigh:

"Ilargi used to work 12 hours a day, 7 days a week, 365 days a year on TAE."

The operative verb here is: "used"

Isn't it amazing what you can do when you've got fire in your belly and you truly believe in your cause.

Patrick said...


Absolutely right on! We are rarely grateful, so let me take this opportunity to thank you, Ilargi and Ashvin (number 3?).

Far from being repetitive I find that TAE always has a well thought out, often unique and/or original, take on issues while maintaining a consistency of perspective.

Having done considerable research myself over the years I do know how much work goes into it. So please be assured that your efforts are seriously appreciated. And cheers!

Asmita said...

It's time to call a spade a spade. Stoneleigh has been freeloading on the hard work of Ilargi and Ash for far too long. How does this deal work? Ash and Ilargi write and keep the faith while you travel to Asia and Australia? Ash, with a law degree and many other opportunities is stock moderating comments on a blogspot?

Ash said...


"TAE's insights about finance and the world at large grew for about a year or so, but after that they plateaued -- nothing new to add."

We can argue all day about how much new insight into our current predicaments is generated by TAE (and we'd both lose - you the argument, me the time!), but what's more important is how many new people are exposed to the same insights here, plateau or no plateau. There's nothing to argue there, it's just a fact. Judging from your profile, you're pretty new here yourself. Welcome!

Lynford1933 said...

Is this what this essay is about?

"Markets can remain irrational a lot longer than you and I can remain solvent." attributed to John Maynard Keynes (c ~1934).

And above your broker’s door reads the sign:

'All hope abandon ye who enter here'.

Obvious solution, stay out of equities unless you are a front running high speed computer. The epitome of insider trading created to guarantee liquidity while making our congress critters look like insider wimps. If you still want to play in the Wall Street casino, Good Luck!

Damn, there I go condescending again. Sorry.

Ash said...


Calm down, take a deep breath, relax. Stoneleigh has done more for this community than anyone else, without a doubt. If either her or I were under the delusion that a law degree granted us some special privileges in this world, we wouldn't be here. And if I was really "stock moderating" comments, yours wouldn't be up any longer.

Asmita said...

You should be glad I'm speaking up for your ambitions. A young man of your age and breeding should have ambition.

Ash said...


I think that 80 years on, we can finally change the quote:

"Markets can't remain irrational much longer, because nary a living soul is solvent anymore, and you and I need to eat!"

Glennda said...

@Stoneleigh, Ilargi and Ash
Many thanks for being my morning read. I can always find good informative info here and at ZH. And during the day the commitariat often adds more than 2 centavos worth too.

@ El G
Thanks for putting into words why JMG is so difficult for me to read. I came from that blog here, when someone mentioned TAE and find that this is the real political and financial analysis that I'd been looking for, rather than only the message to "drop out", go back to the land, caulk your windows and contemplate your belly button. (Mind you I'm getting chickens this spring, here in the city.)

So putting my money where my mouth is, I have just donated to this valuable site. Thanks to all the silly criticism.

Lynford1933 said...

While I was looking up the lines from Dante I found this jewel.

Lynford1933 said...

Roger that Ash, if you get out this way we can eat fresh leaf lettus and some dried stuff from last harvest. Since the apple crop failed, we won't have any cider (sorry bout that) but we have good well water and tea.

Lynford1933 said...

Change above link.

Ant Whisperer said...

YARRRR... Tharr be a Great White Troll. Man the Harpoons!!

Nassim said...


Thank you for that.

BTW, your expectations of the UK match mine. I remember well when I walked from school to Buckingham as a kid to buy condoms - God only knows what for - from the town's only barber and then getting a few things from Tesco's. Tesco was the half the size of this Tesco Express. For American readers, Tesco is the UK's answer to Walmart.

Back in the early 70's while I still had my Triumph running, one of my closer friends and neighbours had a BSA (pronounced Beezer) vintage 1950, 500cc one lunger. It vibrated quite a bit, which is one good reason not to have a single cylinder bike that big.

el G,

I had an old BSA Goldstar in 1970. Wikipedia mentions it having 500cc but I believe mine was 650cc. I guess I must be wrong. It cost me £50 ($120 at the time). I note that the cylinder head of this beast now costs £975 on eBay.

Anyway, I rode it around London for a while. My last time on it, I came off in Piccadilly Circus on a sunny afternoon in June. I had hit an oily patch and was twisting the accelerator to show off to the ladies. Luckily, the bike didn't fall on top of me. No one except the police wore helmets back then. I got up on to my elbows and looked around to see lots of tourists taking pictures. Someone jumped over the barrier and helped me push the twisted bike around the corner to park it. No cops showed up. I had been drinking at the University College Hospital Union Bar with some student-doctor friends. Next day, I had to leave for Athens so I asked a jewish guy who I thought was a good friend to look after it. When I came back, he had vanished. Six years later, I ran into him in Notting Hill Gate and he told me that it was only fit for scrap and that was why he vanished. :)

snuffy said...

Ant Whisperer

You nailed it...

I too have had a "experience"with a triumph,a tr-6 650

I paid out 10$for every hour riding time.

Trying to be a cool fool in my youth...

I always bad mouthed rice-grinders...till I owned one.That '86 650 Honda Nighthawk took me all over the USA, several times...and never failed to fire up...[unlike the POS Kawasaki 350cc's I also owned.]

For the record,I find all the confirmations of the correctness of my impressions and feelings concerning S&I's writings every day,I look in the paper.The specific type of evaluation and analysis I want, and need,for my planning,and prep work are here.

There is as well, a whole crew of interesting and creative minds who chew over the events presented,giving their take on the presented info...all for free.

I usually don't respond to trolls,or other lowlife,But the B.S has seemed to be a bit deep lately,and I tire of it...

Please build in a "Ignore"or kill switch into the new site S&I

If one needed proof of a understanding of the elites of the crisis we face you only have to look at the legislation being shat out by congress.What else could have such of a incredible effect... Jupiter-scale force that captures or twists anything in its grip/path.

I think we are now seeing the most concentrated ,powerful efforts possible of our .gov to keep the status quo going just pasted the next election cycle.That is when I expect all hell to break loose...if not before,when the conventions have a lot of surprise guests in the form of OWS in force.

Please turn off the computer and go tell your father and mother you have been a bad kid,and need your ass whupt....Good.

Bee good,or
Bee careful


Alexander Ac said...

For those interested, there is an actual state of military affairs around Hormuz...

Ash said...

Sentiment Slipping As Greek Debt "Deal" Elusive For Third Day

"Remember that Greek bondholder PSI agreement that was "imminent", and which we said ain't coming any time soon, probably never? Well, the latest bout of the IIF's overpromising and never delivering, something the Charles Dallara agency has been so good at in the past, is starting to creep into market sentiment, precisely as predicted by the Einhorn diagram that explains market trading patterns, and newsflow excrement, better than anything in the past year. Below Bloomberg summarizes just how the latest revulsion at leadership betrayal is starting to hurt the market which may be about to lose all its recent gains driven purely by optimism.

From Bloomberg:

First Word Cross Asset Dashboard shows sentiment slipping with FX, commodities, equities lower as markets pare risk ahead of expected Greek debt swap agreement by week’s end, writes Bloomberg analyst TJ Marta in following note:

* Initial Greek debt agreement announced according to Greek newspaper Proto Thema; IIF MD Dallara says may have something to announce on Greek talks today

* Asian equities, yields reflected generally positive sentiment; equities up moderately to significantly, led by TOPIX +2.0%

* EU equity indexes mostly down moderately, led by Euro Stoxx 50 -0.6%; U.S. futures mixed in moderate ranges

* US$ modestly to moderately higher vs all major FX; European currencies, which rallied strongly earlier this week, are underperforming; euro down vs all except krone, krona

* Commodities mostly modestly to moderately lower with US$ strength

* Treasury yields mixed in modest ranges, with curve steeper

* Bund yields moderately higher; EU sovereign yield to bund spreads mostly tighter; exception is Spanish spreads extremely wider with 2yr +30bps, 2.0 std. devs. to 325bps; Spain seeks 20% cut in bank branches, jobs

Ash said...


I have become quite the tea junkie in recent months. The whites and greens at the local tea shop are hard to resist, many of them grown at VA family farms. But at $4.50/oz for the cheapest teas, I imagine it will get difficult to retain a true junkie status. Fortunately, my father is bringing back some much cheaper and better leaves from Kochi (India), but I doubt those will last very long either! And, of course, it's never a good idea to rely on long-distance supply for necessities (i.e. TEA). Do you have any good resources on properly growing/processing various shades of tea?


scandia said...

As a Cdn I am happy the decision to build the Keystone pipeline has been delayed. I do wish the reasoning was other than election strategy.
As a Cdn I don't feel the win, just relocation from US energy bitch to China's energy bitch. Canadians themselves won't get a drop, we'll have to order in " unethical " oil for ME.

How's that for good governance?

Lynford1933 said...


The high desert does not grow anything except sage brush and tumble weeds naturally. All else we coerce out of the ground with manures and hard work. Tea is one luxury that we presently have a couple year supply but later we will be happy with sassafras or dandelion tea. I will look into what it takes to grow some other (real) teas and maybe coerce a couple plants to produce. Good idea … thanks.

DW said...

@ Virginia Tea -

Any links to growers/distributers for US grown tea?

I'm quite the tea-head myself, but being out in the PacNW I just get mine from across the Pacific Pond.

More curious than anything else.


AllGood4All said...

@Ash, thanks for the info.

@Ash, VirginiaTea, DW, et al.:

FYI, The tea plant, Camellia Sinensis, is actually easy to grow yourself - indoors or out. Then you can harvest leaves right off your own plant! :-)

Grow it in your yard if your temps stay above zero degrees F and below hot/dry (we have a thriving 13 year old plant). Or grow it in a pot on your porch and bring it indoors during the winter. Or just grow it in a pot indoors. As long as it has acidic soil and at least part-time sunlight it should do well.

Commonly sold through nurseries, here's a Pacific NW nursery, for example (and there should be plenty on the East Coast too):

el gallinazo said...

If I were a betting man and God would supply the result in a sealed envelope via a bonded messenger like at the Academy Awards, I would take some serious adverse odds that the rash of amazingly inane criticisms of our editors this week is coming from one "entity." This entity may be a coordinated group following orders or just one individual who is adept at gaming Blogger, which does not require any great genius. I just caught up with a day's comments and it does smell a lot like Butthead of the million dollar watch. As the name implies, he does have a very specific scent.

I am back visiting my dear old friends in the US Virgin Islands, perhaps for the last time now that the entire USA is under martial law. It was just announced yesterday that the huge Hovensa oil refinery on St. Croix will shut down shortly. It is by far the most important business in the territory. Last I checked the USVI population was a bit over 100,000. There will be 1200 direct employees laid off, but of course the spill over will be much larger. The loss to the government coffers is estimated at $100 million per year, which works out to about $1000 per capita. Obviously a total catastrophe. Fortunately the 1% tourists are still whooping it up, buying champagne and caviar. I could eat better in my town in Mexico for a month than what the food cost me at the local market in four days. No shit - not an exaggeration. A pretty TAE lurker is buying me supper at a restaurant tonight so I can escape from my own cuisine for a few hours :-)

The Anonymous said...

"Snuffy said...For the record,I find all the confirmations of the correctness of my impressions and feelings concerning S&I's writings every day,I look in the paper.The specific type of evaluation and analysis I want, and need,for my planning,and prep work are here."

Snuffy, FYI, if you care, I left a response for you on the last thread this AM.

To all - If I may, I think part of the problem here is TAE has 2 groups of readers. On the one hand we have the more or less "off the grid" types, Snuffy, El G., etc. These guys, many of whom I suspect on the risk vs. reward spectrum have a very low risk tolerance (i.e. willing to minimize all risk, even if it means missing on some potential "reward"). They see no problem in waiting because they have already made their choices and went off grid to prepare. As such, they are pretty much ready for whatever calamity may come, be it now or 100 years from now. They are willing to wait as long as necessary because it wont affect them nearly as much when the great "WOOSH" collapse may come.

On the other hand, there are herd members like myself, trimorph, Jal, etc, who, while we are perhaps not as risk tolerant as our fellow herd members, we do have a greater risk tolerance versus the "off the grid" types on TAE. I think Stoneleigh referred to us as having "one foot in both worlds" which is probably correct.

Unfortnuately, timing will be important for determing if/when/if ever we decide to firmly jump into one camp and out of the other.

For example, I (and I suspect some other readers) still have a mortgage. If we took Stoneleigh's deflation is truly imminent message to heart, then it would be wise to sell, rent, and wait til the remaining portion of the (Ilargi says -80% Stoneleigh says -90%) price drop that they say will happen "soon".

Well, as it stands, in large portions of the US (no, not all, but large portions), home prices havent really done much since the early 09 can kicking started. In fact, after the 31%-32% drop from 06 til early 09, the total drop from early 09-now is about -1% nationwide.

For me, the -1% drop in equity is far less than the near 75K in rent I would have paid in the past 3 years. In fact, if the can kicking continues for an extended period of time, and the home price drops are agonizingly slow, there is a chance many of us (especially where rental parity is close) will pay off our mortgages and be debt free, putting us in an even better position than our renting bretheren were waiting for the bottom then deciding to pay cash. Of course, YMMV.

Clearly these decisions about "when" to make the jump will have a large impact over what our financial situation would look like when we do go off grid.

For example, one of the principal advangages that Stoneleigh had, is she was able to sell her UK home, and engage in price arbitrage from high to low cost area, paying for her doomstead in cash. Clearly an enviable position.

Yet there is a certain irony in that had Stoneleigh listened to Prechter in 1987 and heeded his "sell now, deflation is imminent" message, she very well would not have even owned the UK home in the year 2000 that she used to finance her ideal situation today.

IMO, therein lies the timing dichotomy. Had Stoneleigh heeded the deflationist warnings in 87, it very much would have put her at a financial disadvangage versus when she finally did make the leap a full 13 years later. If she did hear Prechters "deflation is imminent" message in 87, she was wise to ignore it for as long as she did.

Thus given how the timing of when Stoneleigh made her leap made a huge impact on where she is now (financially) is it really that un reasonable for some of us who have yet to make the leap ask for the same?

AllGood4All said...

@ TheAnonymous

I agree on the timing thing. I've made decisions that cost me later because I thought collapse was truly imminent - that was starting two years ago.

I appreciate so much of what is shared on this site. I would appreciate it even more if "mistakes" in predicting timing were acknowledged. To me it would enhance, not detract, from the credibility of contributors.

Small example: back in November my take on Illargi's writing was that he was pretty darn confident that the EuroZone would have a profound, outwardly noticeable collapse by Christmas. That there were too many things that could go wrong for something major not to go wrong and trigger a major disintegration. Reasonable prediction, reasonable to be prepared. But it didn't pan out that way. Not at that time.

I would have appreciated it if that simple piece was acknowledged. And it would not detract from the benefit i get from Illargi's observations and underlying framework. Nor would it detract from the respect and appreciation I have. It would actually increase, becuase of the honesty.

I myself have been repeatedly dumfounded and proven wrong - timing wise - by how long and how much the status quo illusions and manipulations continue. In a post a while back I wondered out loud if perhaps this relative "quiet before the storm" actually has a graceful quality to it. That instead of having it all "get over with and just collapse already", we are somehow in an open space, a mysterious time in which we can learn, grow, connect, and make positive changes. Perhaps...

That is why I solicited "Blue Swan" brainstorming in my post above...

snuffy said...


My take on your response...

You get what you pay for...S&I have stated repeatedly they DO NOT give "Investment" advice.

The advise folks of what they see and what they feel may come of it.
You say
[I/we could have made quite a bit of money if I had not done this this and this]
I say

Look,This site has never been for investment...its primary goal/function is to advise folks to look with a critical eye at their life,and to see where it might be adversely affected by the shenanigans going on in the investment community,as well as political.

The formula that I use for my life,my income streams,plans for retirement ect.others might find unattractive.The same way I might find another persons unattractive.

You,and everyone else,will make the bed you will lay in,and do so based on decisions that YOU make.Do not try and put anothers decision to act in a certain way off on S&I.Their actions are their Karma.
S&I put out information and Ideas that are not "mainstream". Some of us feel they are valuable,and thus incorporate them into what each of us choose as a way to live our lives.

Do not blame them for "missed opportunities",.If you feel the advice they give is wrong,tell you what,why don't you go fire up a blog and show us what you got.....


Alexander Ac

Interesting link.I did not know there was 3 carrier groups off the straits..The chance of serious fireworks is quite high now I think.Thanks

Bee good,or
Bee careful


Asmita said...

Last night I watched Diane Sawyer interview a rifle wielding white supremecist at his off the grid compound in the hills of Idaho.

Her message to the audience: Here, for your viewing pleasure, is a real and true unhinged wingnut -- a veritable spokesman for the extreme black helicopter phobic TEOTWAWKI market bears. No need to investigate further on your own, we've summarized the message for you sans hyperbole.

It's kind of like being called a troll when you point out TAE's flaws.

jal said...

@ AllGood4All

Your frustration on why things have not collapsed yet is nothing compared to the frustration and outrage displayed by the marker ticker.

Remember, THEY made the rules and THEY can change and interpret the rules if the rules are an impediment to their objectives.

Changes will be something that you will be able to see as they are reported by the blogs doing the watching.

Count yourself lucky to be among those that are concerned and worried enough to look for the reported signs of trouble by the bloggers.


Stoneleigh said...


It is not wrong to point out high risk junctures for trend changes. Indeed it would be remiss not to do so. This does not amount to a 'timing mistake'. All market timing is inherently probabilistic, so all forecasts are made on the balance of probabilities. Consider the consequences of being wrong under the scenarios of assuming a crash when one does not in fact happen right then, or assuming BAU when we in fact see a crash. In the first instance you remain safe and incur a relatively minor opportunity cost. In the second case you experience a catastrophe. Minimize the consequences of being wrong.

AllGood4All said...


although i didn't say so in my post, i have sometimes had a kind of periodic frustration that the dysfunctional (ie: harmful) aspects of the system don't collapse faster... but i am NOT frustrated that the painful sequelae aren't occurring - i'm glad that there is still some - relative - breathing room... that is what the last two paragraphs of my post above are about.

Instead of just the death of dysfunction taking everyone with it to more suffering for all for a long time, i am open to the possibilities for the dysfunction to die even as positive function is (re) born....
and my hope that this occur with the least harm/pain possible

one small aspect of that is a hope for men to find the strength/healing in being honest/vulnerable about their mistakes....

in the context of mutual respect and appreciation...

Anonymous said...

@ all who are commenting about "timing"

We started in on Stoneleigh's
lifeboat building precepts even prior to being aware of TAE.
For us, this lessening of dependence on the global economy, and the need to "keep up" has resulted in a debt free, and far more healthy life. Grow and trade our food, keep bees, learned or enlarged upon many varied skills, a few diverse and very small businesses provide cash. All have provided a much more free and balanced life and the good health to enjoy it all. No we are not ready for "anything", but are much more flexible and adaptable now to the inevitable changes.
We could have stayed more engaged with the "system" and had far more $$, though this different life suits quite regrets.
Forget is always NOW.

Stoneleigh said...

For those interested in the whole diet debate this is a Must Watch:

Dr Terry Wahls on paleodiet and her own MS

It would be difficult to come across a more persuasive case. It's a TED talk, so fairly short and to the point.

Blackbird said...

@ Stoneleigh

You are correct:
"It is not wrong to point out high risk junctures for trend changes"

Also correct here:
"All market timing is inherently probabilistic, so all forecasts are made on the balance of probabilities"

Here you are wrong:
"you ....incur a relatively minor opportunity cost."

Three years of lost company matching funds are not relatively small.
Three years of 0% interest vs. 3% interest is not small.
Three years of lost dividends is not small.

You do your argument a huge disservice by incorrectly minimizing the magnitude of the costs your readers and listeners have borne at this point (after 3years) by taking your advice.

Stoneleigh said...


Three years of lost company matching funds are not relatively small.
Three years of 0% interest vs. 3% interest is not small.
Three years of lost dividends is not small.

You do your argument a huge disservice by incorrectly minimizing the magnitude of the costs your readers and listeners have borne at this point (after 3years) by taking your advice.

Impacts will naturally vary between people, but the impact is still very, very small compared to the prospects of assuming BAU and losing everything as a result. Losses on that scale are almost unimaginable, and that's what most people will be facing. Much better to be sitting safely on the sidelines in cash.

IMO pension contributions and company matching funds won't matter much, because most pension funds are going to disappear anyway. They're sitting ducks, and they've been sold some of the worst toxic assets going.

Interest rates on the safest debt are also a minor concern. The point of the safest debt is the return OF capital not the return ON capital. The interest rate reflects the low risk premium. Seeking out low risk premiums is a very good thing.

In any case, during deflation, the expanding purchasing power of capital preserved as liquidity means that the real interest rate will be high and positive. The nominal rate is largely irrelevant.

AllGood4All said...

Hi Stoneleigh,
Yes, "pointing out high risk junctures for trend changes" is valuable and very much part of what I appreciate about your work and the work on this site. Thank you many times over! I have tried to be consistent in conveying this appreciation in all my posts... It is sincere.

At the same time, there is a fine point here, not an earthshaking one, just a fine point. That it is valuable (at least, I find it valuable) to acknowledge when those high risk junctures are passed (time-wise) without the events occurring at the intensity predicted (at that moment of time). Because my read from Illargi was not just "thing are getting hot and a really big one MIGHT happen", but "It's getting hot and there's no way a big won't happen by Christmas".

So all i would appreciate reading after Christmas passes is something like: "well, it really seemed to me that things were going to profoundly collapse by Christmas, and - in my integrity and intent for service - I shared that with you, but turns out that didn't happen in that way right then". That's all, simple. To me, that kind of thing enhances rather than diminishes credibility. It's an honest kind of vulnerability about being wrong sometimes that I haven't much seen from Illargi's posts.

Your overall work is so strong you can afford to be wrong about something once and a while without it shaking the basic message.

This is NOT a request to stop alerting us when you think junctures are at hand - I value your views! This is just to let you know that this reader values honesty regarding imperfections.

Blackbird said...

@ Stoneleigh

"IMO pension contributions and company matching funds won't matter much, because most pension funds are going to disappear anyway."

Company matching funds are not pension contributions. You are mixing two totally separate things into one idea.

TAE Summary said...

* The other massive shoe may drop at any time; Expect the unexpected; Contractions speak louder than words; Sentiments eventually yield to reality

- TAE is a guilty pleasure
- TAE has real political and financial analysis
- TAE is unique and original
- TAE has never been about investment strategies
- TAE has two groups of readers: off gridders and fence sitters
- TAE's value is exposing new people to the same old TEOTWAWKI
- TAE posts are declining and may be linked to housing starts
- TAE posts are fewer but more complex
- ZH is the source, TAE the sink

* Abstract wealth depends on military power; The police primarily defend the rich; Public service doesn't pay; TPTB use TPTB to remain TPTB

* Most people don't see what's coming; Be careful how you spend your credibility capital; Preparation is delusional; Eat, drink and be merry for tomorrow we collapse

* Crisis acceleration is more interesting than crisis velocity; Repetition is the mother of diminution; Lead, follow or close your blog; Mene, mene, tekel, shut-upsharin

* The market is diverging; S&P is off to a Mayan start; Markets remain irraitional longer than you can remain solvent; Equity investing requires deep thought, deep pockets and deep breathing

* House poor used to require one income but now requries four; The young cannot ape the lifestyle of their parents; A degree in law won't grant you special priveleges; Young men with breeding and ambition should have breeding ambitions

* The keystone pipeline is an election strategy; Tar sands have only short term benefits; Use it up, wear it out, make your pile then do without

* There is only one TAE Troll; His mother was Medusa and his father was Santa Claus; His handle is 'legion' for he is many

Blackbird said...

Let's take a simple case:

$100K in 30 Year treasury bonds in 2009 vs. $100K in 13 week T-Bills.

In 2012:
The 13 week T-Bill guy has about $100010 in his pocket.

The 30 Year Treasury bonds guy has about $111000 in his pocket

I'm sorry, but $11K is not a minor opportunity cost. $11K is serious money. That's what your advice cost, even a very conservative investor. 30 year treasury bonds are not wild and crazy guy investments. And the notion that: Well, you'll never be able to sell those.? Evidence? It's pure speculation on your part. And it cost $11K

Stoneleigh said...

This is the Reddit link to my interview with KMO. He's hoping it will reach a wider audience this way. You can vote for if it you agree.

Blackbird said...

Lumping 30 year T-bonds in the same category as MF Global is silly.

scandia said...

Opportunity costs my ass!
What I have learned from Ilargi, Stoneleigh,Ash VK,Greenpa,Snuffy, I.M.Nobody,El G. Lautturi,Jal,Bigelow and others is PRICELESS.

Stoneleigh said...


It's not that you won't be able to sell 30 years bonds, but that they will not be a wealth preservation strategy over the long term because yields will increase on longer term debt, and yield movements are the inverse of price movements. That means as longer term risks become more appreciated, the price of the bonds in the secondary market will decline, and you will lose capital. Of course we're not there yet. We have some flight-to-safety time to go first that will benefit even longer term US debt. The shorter term is simply safer, and therefore a better wealth preservation strategy, because you are not dependent on the secondary market.

People will entirely redefine 'conservative investor' over the next few years. If you think we are at the top of a massive global ponzi scheme you seek security and capital preservation. If you do not, then you do something else. I simply suggest that you minimize the consequences of being wrong. Do you think we are wrong about the global ponzi scheme, and the inevitable consequence of the extinguishing of excess claims to underlying real wealth? If you think we are right about that, then whatever opportunity cost you can point to right now won't seem very important in comparison.

Why cling to a system that is so clearly failing? The credit collapse began in 2007, so we were not wrong in warning of it in 2005/06. It is a very long way from being over, so we are not wrong to continue to warn of it, especially since it is about to pick up speed again. Far better to move as securely as possible towards something that has a chance of working, when the prevailing paradigm offers no prospect of security whatsoever.

Nassim said...

re: tea


I really like a good Darjeeling. Sadly, the best stuff seems to either stay in India or gets sent to places like the Persian Gulf. In the UK, I used to buy good stuff from Germany on eBay - the English have totally lost their interest in good tea.

Australian teas are crap (but the coffee in Melbourne is fantastic) - I guess it is because they are grown at the wrong elevation or climate. I tossed away every packet I bought after sampling it as it was that bad. I suspect that there is more to it than just having a plant. Currently, I get tea from an Indian shop which sells Brook Bond tea - drinkable, but not the same. You prompted me to do some research and it seems that the US might be a good place to buy some.

I think that there will always be international trade in things like tea, coffee, sugar, marijuana and tobacco. Perhaps that is a good survivalist strategy. It certainly beats growing potatoes and cabbage. :)

Stoneleigh said...


When did I ever do that? Please do not put words in my mouth.

Blackbird said...

You're painting in black and white: canoes on niagra falls, millimeters from the landmine, and seconds from Trinity.

And there's a benefit and there's a cost. And you still don't acknowledge the cost, or the fact that your palette lacks the color gray.

Anonymous said...

Blackbird wrote:

"The 13 week T-Bill guy has about $100010 in his pocket.

The 30 Year Treasury bonds guy has about $111000 in his pocket"

How and when did the money get into their pockets?

Anonymous said...

"Three years of lost company matching funds are not relatively small.
Three years of 0% interest vs. 3% interest is not small.
Three years of lost dividends is not small."

It's only money.......lots more to lift than $$$......just a part, not by far the most important consideration.

"Opportunity costs my ass!
What I have learned from Ilargi, Stoneleigh,Ash VK,Greenpa,Snuffy, I.M.Nobody,El G. Lautturi,Jal,Bigelow and others is PRICELESS."

IMHO, Scandia, you are completely correct

YesMaybe said...

The Anonymous

Thus given how the timing of when Stoneleigh made her leap made a huge impact on where she is now (financially) is it really that un reasonable for some of us who have yet to make the leap ask for the same?

Yes. Stoneleigh may have been fortunate, clever, whatever. But it is unreasonable to ask for things which are not possible. The TAE writers can't tell you when shit will hit the fan, how much the housing market will fall and when, which bank will go bankrupt or steal your funds, etc. It's not like they have some secret timing information which they're withholding and secretly using to make their fortunes. They just don't have a crystal ball and don't pretend they do. Even folks like Reggie Middleton who are offering investment advice limit themselves to things like "this investment will tank" etc., rather than (to my knowledge at least, I'm not a subscriber to his site) "this will tank exactly 6-10 weeks from now". Same goes for people like Hugh Hendry: they set up bets which they expect will make them money, but they know it can go differently and try to plan for that contingency as well. The bottom line is anyone who would tell you "the optimal time to sell your house is ______" or "selling your house now and renting is guaranteed to save you money" is full of it.

Stoneleigh said...


Everything I do - EVERYTHING - is about balance and shades of gray. It's about weaving an intricate tapestry with thousands of threads of thought, and then trying to communicate the work. Of course it's still developing all the time as more information and more factors are integrated. There's never a big enough big picture, but I humbly suggest that you'd be hard-pressed to find a bigger one than you find here at TAE.

No one will ever be able to give you perfect timing advice at all times. Timing is about navigating shifting waters all the time, probabilistically. We are heading for the defining event in our lives with the collapse of the global financial ponzi scheme. We do our best to time it as well as we can, but the fact remains that the safest place for anyone not prepared to watch the markets practically 24 hours a day, and be prepared to take major risks, is on the sidelines in cash. There are so many opportunities out there to lose your shirt, even for the big players, and very few opportunities to win.

To be as safe as possible, we need to stop trying to game the ponzi scheme in the guise of generating investment income. The markets are predatory, especially at times like these when they don't even try to hide that anymore. If you remain in that system, you are playing against people with information and connections that you don't have. They are going to win. Whatever you have in the system is at greater risk that whatever you have control over. It is important to understand though, that there are no no-risk solutions. Every choice we make has its associated risks, and almost everyone loses something in a deflation. He who loses the least is the winner (with perhaps certain well-connected and ruthless exceptions).

Nassim said...

Company matching funds are not pension contributions. You are mixing two totally separate things into one idea.


I think you are engrossed in the details of your pension scheme rather than trying to understand that if your scheme (like all others) has been buying rubbish and paying its administrators and consultants substantial fees then there will be nothing left there after 20 years. The "financial services industry" is a massive Ponzi scheme and they will all support one another with ever more complexity in their justifications for their schemes losing value year after year.

Can you name a single scheme that has been heavily involved in buying gold or silver over the past twenty years? They don't do that because they make their money from churning portfolios - something you cannot do with PM's. I am not here suggesting that you buy, or don't buy, PM's - I am simply pointing out that their mechanisms and world-view is wrong.

Blackbird said...

If you're truly as confident in your arguments as you say, then you would be more honest and forward about what your recommendations have cost now, at this point in time. Right now. You always focus purely on what they'll get you tomorrow or the next day, or the next year. Not what they've been costing you for 3-5yyears.

If you're arguments are really that strong and that transparently obvious, then they wouldn't be harmed by the truth of their costs.

Your timing argument is one giant flaming Staw Man. And that's putting words in my mouth.

Blackbird said...

I don't want and I've never asked for Timing.

I want the costs.

snuffy said...


Thank you for the link.We were advised by our doc to go see "Knives over forks",and "King Corn" a while back...and our diets have not been the same.I still eat too much dairy,but I have cut out the majority of processed meat...and my favorite drink now is pure blueberry juice[expensive]I was warned by my wife that this year is "the year of the carrot"and I will be expected to try and grow enough veggies to support her juice habit


That is a LOT of carrots.I have a personal interest in this ladies story,as good friends wife has MS,and [I pay close attention to diet/Nero-physical problems for personal reasons.]

Oh well,If Mrs snuffy will give me some time with the sailboats,and fishing,I will see just how large of a garden I can grow.The local horsewoman[50+nags]has offered me as much of the green gold as I will take,sooo,between that and re-mineralizing my garden space,and a wheelbarrow of manure in each tree in the orchard...I might grow enough to keep her dream of me growing most of the chicken food this year.

Stoneleigh,please ignore all the quack,quack,quacking here.You and Ilargis gift of sound,erudite analysis and evaluation of current events,provides many with a window to a credible line of thought,outside the lines set by the mainstream.Blessings on your house.

Bee good,or
Bee careful


Stoneleigh said...


I have always been completely up front about choices having costs and benefits. Every choice is speculation. We form our worldview, we act on it and in doing so we accept the corresponding risks and benefits. No one can insulate you from this. Opportunity costs are part of the equation for everyone. Whatever you do means that you did not do something else that would have had a different risk calculus. We exist to help inform people ask to the risks in orer that they might be able to make more informed choices, but those are still their own choices. We do not tell people what to do. Act on the situation as you see it and accept the consequences of those actions, for good and ill. All the rest of us must do the same.

Blackbird said...

@ Stoneleigh:

You said:
"I have always been completely up front about choices having costs and benefits."

That statement right there is the extent of your cost enumeration.

Plain, Vanilla, Puff.
Why not delve into some #'s. You do the numbers very clearly and thoroughly when you discuss the Pros of your strategy.
Why not, for once, bring the same thoroughness and care with the #'s to the cost (the con) side of the equation.

If only for the sake of honesty and openness.

The Anonymous said...

Stoneleigh, imagine if you will, in a vacuum someone looks at certain data sets, and declares:


This is a very high impact decision, made with a very high degree of certainty. In a vacuum, A comparative layman would be well served to heed the warning every time.

The problem however, is what is the overall accuracy of the person making that high impact call made with such clarion certainty?

SITUATION I...If we know the person making that call has a history of being right, even 1/2 of the time, its probably best for everyone to listen, all of the time. In this hypothetical, the good the person has done by saving 1 of the people, 80% of what they have, outweighs the 1 who was harmed to the tune of -10%. Clearly making that call was indeed the responsible thing to do!

SITUATION II...However, what if instead, the person has a history of being right only 1 of the last 20 times. If thats the case and 20 people have listened to the person in 20 separate instances while the individual harm to each of the 19 was small, (-10% each) in the aggregate the harm caused to the 19 outweighs the good caused to the 1 who saved 80% of what they had.
In this case, I think its fair to say that it was irresponsible, for the person to ever make that call.

Now, clearly this is a hypothetical, and I really have no idea where you fall on that spectrum. The problem however, is I really dont think you do either.

I have asked you this (or a similar line of question) before, and you have IMO never really provided much in the way of a response... often speaking of the risks, your primers, etc. Still, I have to ask, do you ever plan on doing some sort of review of some of what you have said, and how well it lined up versus what actually hapened? Also, for the ones where you were surprised, do you ever plan to analize why what you stated did not happen?

I very much appreciate your patience, but I really would love to get something along the lines of a yes or no type response. I really think it would do alot of us (yourself included) a fair degree of good. Cheers...

bosuncookie said...

I first started reading TAE in 2008, when I & S left “The Oil Drum.” I lurked for about a year, making my first comment (of very few) in September of 2009. I invited Stoneleigh to my town to make a talk. She agreed, and she stayed at my house in 2010 when she gave a talk at our community center. I read here every day… I read critically!

I live hand-to-mouth. I’m a retiree, living on SS and a state pension as a retired teacher. I supplement my income doing handyman work and slinging coffee. I’m in the shadows.

What has this site done for me? Mostly, it woke me up. Like many other Americans, I used my nearly-paid-for-house as an ATM machine in the early 2000s. I had credit cards; I had debt. I didn’t care, because… a) I was ignorant, and b) I had a good income from a decent job. I could meet the payments.

As I learned more—from TAE and other sites—I wised up. Over a period of time, I surveyed my situation, looked inward, examined my goals in light of my self-understanding, and I made these choices:

1. I got out of debt other than mortgage on my suburban home.
2. For all kind of reasons that make sense to me, I decided to stay in my suburban house and deal with the mortgage. (This is perhaps contrary to Stoneleigh’s advice, but it seems best to me, all things considering. Actually, I believe she has said that each person will have to figure this out for themselves. I did.)
3. I got healthy, eschewing carbs, losing 50 lbs, and moving from a good diet to a better diet.
4. I continued my practice of meditation and being grounded, maintaining good mental health, eschewing blame, embracing resilience and responsibility.
5. I amped up my involvement in gardening, community-building, and establishing relationships with like-minded people.
6. I raised consciousness about ongoing contraction via a soft-sell to friends and acquaintances. (This is why I invited Stoneleigh to NC.)
7. I partitioned my home to allow boarders and tenants, securing an alternative income. I sold what tiny amounts of physical silver I had to help pay for this partitioning.

Would I have done all this without TAE? Don’t know, but my guess is probably not.

Finally, timing doesn’t matter to me. Everything I’ve done makes sense in and of itself, regardless of contraction, collapse, Armageddon, or winning a lottery. I’m happy; I continue to read here, and I’m completely befuddled by those who want to undermine the mission of the selfless people who toil at providing readers with an independent point-of-view in a world gone mad.

Best wishes to all, to the selfless and selfish. We’re all going to need it.

Lynford1933 said...

If Stoneleigh is happy with her decision, I am happy for her. If Blackbird is unhappy with his decision, I am sad for him. I would guess Blackbird is taking a lot of heat from somewhere other than TAE for lost opportunity and has to blame someone for his poor monetary decision. I have never known anyone to hold a gun to anyone’s head to make them invest or not invest. My advice to anyone who lost opportunity to “suck it up, take the blame and get on with your life.” There I go again. Sorry.

One time the California Lottery got up to $125,000,000 so my wife and I drove over to California (about 20 miles) and invested $10 each. The payoff was $10,000/day after taxes for some 20 years. We speculated all week about what we were going to do with all the money. As it turned out, all 60 employees of a small company pooled their money and won the lottery … about 2 million each. Even the janitor was a millionaire; the company folded. My friend goes to California once every four weeks and invests $40 in tickets for the four weeks. He calls it “My Port Folio”. I don’t know for sure if his port folio is any better or worse than my bank. We’re not done yet.

AllGood4All: Thanks for the tea link but I already have four plants coming from Amazon for about the same price each. We are in USDA Zone 5b so they will be planted in the high tunnel (aka Hoop House) with additional protection on cold nights.

bosuncookie said...

PS: Any extra funds I have I convert to cash in The Bank of Bosuncookie.

Asmita said...

As a woman and a mother, I don't think Stoneleigh truly is able to discuss the details of the drawbacks.
As a mother, you take your greatest responsibility to be your children. And Stoneleigh has advised her children about their future according to her worldview - no college without debt - therefore no really good schools. To delve into the potential costs of being wrong would be too much for her maternal instinct. She would need to admit that she has done unrepairable harm to the future of her children. NO mother could do this. This is too much to ask.

ian said...

An article I read on reuters from Europe was saying how the banks are realizing we are in for another collapse but this time it will be different. Banks are hoarding assets to comply with the new stricter regulations. To follow the new rules they must deduce debt to comply with the new debt to asset ratios.

The only solution I see is small relief of pain by not needing the system. Check permaculture and aquaculture.

Further, since the rising of mankind, mankind has always thrived in groups not individually - although if what we are looking at is the peak of resources than some control of the group size compared to available resources will be necessary.

The engagement of government will also be a game changer. A policy of appearing boring towards the government.

Finally I would suggest the importance of using all tools available. Some seem closed to the idea of using technology but it is one of the tools available.

good luck

mike said...

"Much better to be sitting safely on the sidelines in cash."

For how long? your message has been going on for years, anyone who listened to it missed out on huge gains. I agree with Blackbird, at this stage you have been singing the same song for years, but the final product has not improved.

You gotto love the Lynfords of the site, "nobody put a gun to your head" not the point, having the gull to admit wrong is huge...I've yet to see it on TAE.

The 'regulars' on this site are die hard and will make every excuse for TAE and their hosts, its a pointless endeavour even arguing it, Blackbird.

bosuncookie said...


I'm not a diehard; I'm a reader.

The only excuse I make is for thinking; that excuse is necessary, perhaps, in a world of parrots. No one makes you click on TAE.

A thinking person reads a site, processes the conversation and information, and folds the insights or delusions in to their own experience.

If it doesn't jibe after doing that, a thinking person would merely leave. To persist in finding fault bespeaks of different motives. Self-righteous indignation is seldom attractive. Not that one must always be attractive, but what is the point of self-righteous indignation?

Asmita said...
This comment has been removed by the author.
Asmita said...

"self-righteous indignation"

See projection and Jung.

The Anonymous said...

To all the other critics of TAE:

If I may, you might have noticed, that I have asked a specific poigniant question of Stoneleigh which I sincerely hope she answers in a straightforward manner. If she did, I suspect it would be of interest of many of you as well.

At the same time however, considering the normal ebb and flow of TAE comments, this frankly looks like alot of piling on. If any of us were in Stoneleigh shoes, and wanted to answer my question, would you really want to enter into the hornets nest this thread has become?

Since I feel partly responsible for causing this disrupton, may I respectfully ask all of you to please lay off for the time being? Thank you.

Skip Breakfast said...


Regarding TAE advice that it is better to stay safely on the sidelines in cash, you state "For how long? [TAE's] message has been going on for years, anyone who listened to it missed out on huge gains."

You're only right about one thing really: TAE has been sending out this message for years. And for those who listened prior to 2008, they would have saved themselves gargantuan losses. I only yesterday spoke to an ordinary investor who says he has lost so much in the markets (100s of thousands) that he can't even think about it without being ill. Similarly, since the "recovery" post-2008, many more have been caught in preciptious drops from the market highs in real estate, stocks and commodities. In fact, there are very very few people who have consistently come out ahead. So when you say "anyone who listened" to TAE advice missed out, it's simply not true. Unless you were Goldman Sachs, you stood very high odds of getting caught in tremendous volatility. And those folks who have bought real estate thinking the worst is over may yet find their investments go down further still. You'd have to show me some really solid statistic to demonstrate that "anyone" who was NOT in cash and was all-in on real estate, stocks and commodities since 2005 had done better than those in cash (and cash equivalents like short-term bonds). And please keep in mind that TAE's position is that, while many investors have already lost their shirts (by NOT being in cash), the worst is yet to come!

bosuncookie said...


Meaning Stoneleigh is the therapist and I'm the patient? Jeez...

Stoneleigh wasn't the only person, thing, or eventthat helped me wake up: Fallujah, Bush, corporate liars, Congressional fucktards... all of these are sources of my awakening. It is thinking, questioning, investigation, etc. that lead to awakening. At heart, it is a willingness to entertain this question: "What is the truth of what seems to be going on?"

I work at this question routinely, Big Picture and little picture, global and local, other and personal. Do I see clearly? Not always. But what I see at this moment--or, the provisional story I see at the moment--is that you have an axe to grind. Please don't grind on me. You don't know me well enough.

Having said that, come on down to Wilmington, NC. Call me, e-mail me, visit. You won't find a brainwashed robot; you'll find an independent thinker.

Transference... sheesh.

jal said...

Re.: cost benefit analysis

A survival predatory animal has a hunting ground/trail that (s)he patrols regularly. Changing their patterns are mainly due to lack of food/prey.

Humans are no different. Humans have set up more complex patterns of finding preys. Humans also prey upon each other.

Since you are still alive, (wether you think you are a predator or a prey), it means that you have not exhausted your complex territory and have avoided being a meal by a better, bigger, successful predator.

Tonight I’m going to give thanks, while eating a good meal of romano beans that I grew in my garden, for having my eyes opened by I&S.

I have changed my survival patterns. As things change, I will hope that the changes will continue to improve the survivability of my circle of life.

Be glad that your past ill-informed decisions have not resulted in your demise.
Life is not in the matrix.
You are your memories. Go and make pleasant memories.

snuffy said...


You have a way with words.

I really hope they figure a way to put a "Ignore" switch, on however they rig the new site.After awhile,conversation with some folks becomes pointless,and boring.

Once again,If this place is not your cuppa tea...Nets a very big place.Unless disruption and "name calling",and nasty insinuation is your thing...In which case I will not be polite,and just say GTFO chump.

Bee good,or
Bee careful


Herbal Floyd said...

Don't bee crude. Bee a good little boy and mind your manners.

Nassim said...

A generation of young workers face retiring in poverty because of the collapse of private pension schemes, a report warns today.

The figures highlight the grim future for employees in their 20s and show how they will be worse off than their parents and retirement will begin later.

The data, from pension experts Barnett Waddingham, looks at an individual who starts saving into a pension at 20 and stops work at 60.

It predicts a pensioner’s income will fall from £21,000 a year today to only £6,440 despite earning the same salary and paying into the pension for 40 years.

Malcolm McLean, a consultant at the firm, said the report exposed ‘the stark reality of the pension divide between past and future generations’.

For a person retiring today at the age of 60, who has a ‘defined benefit’ pension, such as a final salary scheme, they would enjoy an income from their pension of £21,000 a year based on a final salary of around £31,600.

But these types of pensions are virtually extinct in the private sector.

Generation of youngsters face retiring 'in poverty' because of pensions collapse

And this report is based on business-as-usual continuing for the next 40 years.

bosuncookie said...

Snuffy, thank you.

Asmita, metta to you: may you be well; may you not suffer; may you experience joy; and may you have wisdom

ben said...

"Don't bee crude. Bee a good little boy and mind your manners."

herbal floyd channeling cheryl.

i may have posted this song before i can't recall. joe pug channeling stoneleigh.

hymn 101

omega1alpha said...

"If you remain in that system, you are playing against people with information and connections that you don't have. They are going to win." -Nicole

She's right. Most that have headed the warning are the salt of the earth types. Karma is a wonderful thing. The rest are still hypnotized by making an extra dime. It's unfortunate that my associates can't milk you for all you have. I'd enjoy watching your wives and children spit in your face when you fall on your face.

Glennda said...

Thought I'd change the subject here. The current finger pointing is getting very old. Points made; enough said.

I don't often listen to pod-casts, but I made an exception for this blog. (Hate to put on the hearing aids in the tranquility of my home.) I admit to doing some work while listening to it and rather enjoyed the company as I plowed through some spread sheets etc.

My ears perked up when Nicole was talking about OwS and the Tea Party. Now I understand that both of these phenomenon are examples of populist discontent with the current BAU of ever deepening erosion of our "buying" power for basic necessities, not just consumerism.

At the very end of your talk you mention that you thought that there was some kind of possibility that a populist demagogue might be able to subvert those groups. I suppose the structure of the Tea Party may cause people to join it due to influence from religious leaders.

The structure of OWS is very different. It is horizontal with many spontaneous pile-ons by very different groups, not surprising in a movement that claims to represent the 99%. It is the horizontal structure of it that baffles MSM and politicians who want to know "who to talk to" aka "who to bribe". The thing is there is no leader, that is it's strength.

I think I've noticed some who want to sway a local Occupy action, but my guess is that people will vote with their feet and show up at what they support and disappear when an action has less support. Then the news may say that the movement is dying, but rather it may be showing its preferences. I just don't see OWS following any kind of demagogue. That goes against all the fine training in the methods of General Assemblies where anyone can speak on a subject.

Okay I know it can get tedious listening to people, but it is empowering when you can report back what your break-out group has been discussing. Not all discussions are interesting, but we know about that reading blogs. General Assemblies like blogs are very empowering.

Even the Economist magazine has had articles that more variety of thought about economics is coming out of blogs. Likewise more variety of thought is coming out of OWS. We see all sorts of ages and political leanings in the Occupy movement.

To let you know I'm not just an armchair viewer of OWS, we occupied Wall Street West today. It was very well handled by the SF police who just herded people away while they made arrests of those chained to the doors of BOA. I complimented their sergeant that they did not beat people (or pepper spray) like the Oakland police.

I think that I'm beginning to form a network with other like minded people I recognize at the gatherings. Many of the young people ride bikes and are part of the urban farm movement with permaculture etc. We are building a trust in each other that we don't have in the current political structure. Maybe I'm an eternal optimist, but this seems deeper than previous anti-war and civil right actions. There is not just one message, with not just one problem. With so many problems this may help alert the powers that be that they just can't slash away at the bottom of the pyramid without any response.

Sorry if this rambles, but seeing so many involved people has my head awash with ideas and images. These are all people that know that BAU has had it, whole streets full of them know.

Stoneleigh said...

For anyone who might be confused about my choices involved in sending my children to college/university, I would like to point out that this isn't the US. My kids go to a perfectly good local school, worked hard enough to get a scholarship, are learning practical skills and have taken on no debt in doing so. Under these circumstances, it costs about $2000 per year for them to achieve a good education. No really hard choices need be made at this point. My son would probably like more beer money, but the lack of it is no real hardship. My protective maternal instincts are not triggered by this situation - LOL

When I am in the US my advice to young people would be that unless one has a very wealthy family or gets a huge scholarship, don't go to college. It isn't worth it. The piece of paper you may eventually get probably won't get you a job, but it will probably land you in a debt hole you may never be able to get out of. Then someone else owns you. Don't sell your freedom so cheaply.

The whole idea of 'good' and 'bad' schools is a bit of a fiction, certainly in terms of the quality of the education. There are certainly more and less expensive schools with more or less of a social 'cache', and undoubtedly jumping through the expensive hoops can vault one into a privileged position if Mummy and Daddy can afford it. The social strata are solidifying, and this is a reflection of it.

If it's an actual education you're after, rather than a box-ticking, point-scoring exercise, then your education is what you make of it, whatever school you went to. If you have enough intellectual curiosity, then you can learn almost whatever you want by yourself. If you don't have that characteristic, then spending several years paying ridiculous amounts of borrowed money to sit in a classroom isn't going to help you anyway. For now letters after your name matter, but in the future, demonstrable practical skills will matter much more.

Greenwood said...

Anyone even seriously thinking their pension will be there when they retire is delusional.

Put a crack pipe down and slowly step away from the table, or you will be indefinitely detained.

No, really.

A certain vib of hysteria is evident in the admonitions and chanting and wailing about the BAU of 'retirement' and such.

It's gone Baby, gone with the Wind.

Your pension was sucked into the Void several years ago.

It rocketed by so fast it didn't even stop long enough to blow you a farewell Kiss darling.

Elvis has left the building sweetheart.


ogardener said...

Blogger bosuncookie said...


Meaning Stoneleigh is the therapist and I'm the patient? Jeez...

Stoneleigh wasn't the only person, thing, or eventthat helped me wake up: Fallujah, Bush, corporate liars, Congressional fucktards... all of these are sources of my awakening.

Richard M. Nixon did it for me. My goodness has it been that long? LOL

Stoneleigh said...


There are indeed many interesting things going on in the Occupy movement and good things may come of them. I fervently hope so.

My worry, however, is that what may start as a search for justice could morph into a hunt for revenge. Mass movements in times when the pie is shrinking tend to become more and more negative over time, and eventually become open to being manipulated by opportunistic charismatics. being in a negative emotional frame of mind can be an effective barrier to rationality. Think of George Orwell's Two-Minute Hate. That was about control.

Despite my worries, I wish the Occupy movement well, and I will continue to do so if they remain in their current form. I don't offer anyone unconditional support though.

Stoneleigh said...


If I get back to Wilmington I would love to drop in again. I had a wonderful time last time. Great to hear that you're doing so well :)

Herbal Floyd said...

@ ogardner -- Nixon did it for me....

And Johnson was more principled?

Have you listened to the Johnson White House recordings with McNamara?

How about Kennedy?
Roosevelt? and the 1943 decision to initiate aerial bombing campaigns specifically targeting civilians.

There is such selective memory at work here.
"My window on history, which just so happens to overlap with more formative years, was uniquely corrupt."
Given that every generation believes it lives in the most corrupt, the most greedy, the most destined to fail generation -- it's really rather quaint to hear it expressed with such heartfelt belief once more.

Play it again Sam. And burn the history books.

Candace said...

I'm perplexed as to how the advice to get out of debt cost me money. If the interest rates on credit cards and mortgage loans are greater than the return on interest on a 401k. then how did you lose money by paying them off instead of putting money in an investment account?


trojanhorse said...

snuffy said...


My take on your response...

" You get what you pay for...S&I have stated repeatedly they DO NOT give "Investment" advice."

Okay that has been stated, but what is the advice to hold (i presume US$)cash through all its volitility while to avoid gold through it's volitility, other than investment advice?

Stoneleigh said...

The comment section is closed for the night due to spam activity by our resident troll.

Ash said...

The Anon,

You were trying to make some legitimate points, as usual, and the troll chorus set in, as usual. I know you're not responsible for any one elses' thoughts/actions, but I'm sure you also better appreciate the delicate balance one must strike when warning of upcoming risks, and the need to ward off mindless criticism that does nothing but induce confusion and complacency in a world with way too much of all three. Allow me to quote Stoneleigh from up thread:

Everything I do - EVERYTHING - is about balance and shades of gray. It's about weaving an intricate tapestry with thousands of threads of thought, and then trying to communicate the work. Of course it's still developing all the time as more information and more factors are integrated. There's never a big enough big picture, but I humbly suggest that you'd be hard-pressed to find a bigger one than you find here at TAE.

Nothing about TAE's big picture is a simple equation to memorize and parrot. It is a cooperative effort to document, understand and avoid the numerous risks confronting modern society to the best of our abilities. I view the comment forum as a critical extension of TAE, so informed criticism/discussion is a big part of that effort as well. You will find no other site that hesitates so little to quote from other intelligent and informed analysts, regardless of how much their core message/advice is different from that of TAE's.

Now, all that being said:

"Still, I have to ask, do you ever plan on doing some sort of review of some of what you have said, and how well it lined up versus what actually hapened?"

I myself have had to go through the archives on more than one occasion for various purposes. There is precious little in the way of the concrete predictions that you seem to be so critical of, and there is a wealth of analysis that conforms exactly to the broad trends that have been developing around the world over the last few years, and especially the last 9 months. I encourage you to go back through and pick out specific parts that you are critical of or that you feel need to be "reviewed", because, between the archives and the comments, there is very little ground that hasn't been covered in detail and with nuanced perspective.

Ash said...


"Okay that has been stated, but what is the advice to hold (i presume US$)cash through all its volitility while to avoid gold through it's volitility, other than investment advice?"

Come on, man, we've been over this before. I have no problem with you labeling general prescriptions from TAE "investment advice", but at least get them right before you do. Find me the place where anyone tells anyone else to "avoid gold".

bluebird said...

Agree that pensions are filled with toxic investments and eventually will be voided. However, wouldn't the Pension
Benefit Guaranty Corp (PBGC) take over the pensions temporarily and remit the pensioneers a reduced pension for a time, before the pensions were deemed worthless?

Or would the PBGC be eliminated too?

bluebird said...

Could it be that all the trolls recently (and there are several), indicate something big and evil might sooneth be coming.

The Anonymous said...

"Ash said...I'm sure you also better appreciate the delicate balance one must strike when warning of upcoming risks, and the need to ward off mindless criticism that does nothing but induce confusion and complacency in a world with way too much of all three."

Agreed - its tough balance as people want certainty in an uncertain world. You warn too much you invite criticism like mine, you warn too little, and people chime in "why didnt you say anything"!!!

"Ash said...I encourage you to go back through and pick out specific parts that you are critical of or that you feel need to be "reviewed", because, between the archives and the comments, there is very little ground that hasn't been covered in detail and with nuanced perspective."

I am running around a bit for a few days , but will do. I appreciate your candor.

YesMaybe said...

Since there's a thanksgiving wagon in this thread, I want to say I concur that this blog is of immense value, both the articles and the commentariat. And perhaps the biggest reason is one Stoneleigh mentioned above: the fact that it incorporates many different, but interdependent, fields of knowledge to form an overall picture. If one contrasts TAE with columns by folks like Stiglitz, it's quite clear who has reality on their side.

So, thanks, I&S&A, and y'all!

Greenwood said...

The big three 'rating' agencies, S&P, Moody's and Fitch, are constantly being quoted, both here at TAE, and in the MSM as some sort of honest measure of economic health indicators, when in fact, these very entities were instrumental in giving massive almost unbelievable amounts of toxic pus-filled gangrene 'assets' (packaged by known criminal banking syndicates) triple A 'ratings' , allowing them to be shoveled into investment portfolios worldwide (pensions, foundations, 401k….) like concentration camp victims into the crematorium.

S&P, Moody's and Fitch are whores plain and simple, the cheapest sleaziest type imaginable. Their pimps are the banks, and they work'em hard and slap them stupid if they don't tow the official party line.

The distortions to the 'market' that S&P, Moody's and Fitch have perpetrated reminds me of the Harlan Ellison quote:

"'The Mad Dogs have kneed us in the groin, they've rubbed dirt in our eyes and rabbit-punched their way to a first-round decision." ~from Psychotic 15, 1953~

This is too late to matter but the Euroland wimp-meisters have finally reacted.

European rating agency to rival S&P, Moody's in 2012: report


Chas said...

I'm a research scientist in a dying industry. I'm 51 and have started thinking about a second career which will be viable post crash and will give me some geographic freedom.

I'm think teaching science might be the best option.


Hombre said...

Blackbird singing in the dead of night
Take these broken wings and learn to fly
All your life You were only waiting for this moment to arise

Black bird singing in the dead of night
Take these sunken eyes and learn to see
all your life you were only waiting for this moment to be free

Take the open hand of everyone at TAE!

seychelles said...

Ash...Yes, it's all about awareness of risks.

Bluebird...Trollarama, yes, good contrarian thinking.

Trolls...The vast majority of "investors" lose money. Only surefire way to increase your assets is to do something that another person finds useful, then pay the taxes on your net, if you get paid. Holding cash in a deflationary environment, in which purchasing power of cash increases tax-free even with zero interest is not bad advice. Even though there has been no massive (obvious) deflation yet, the realities that prompted a deflationary call are stronger than ever. The longer it is delayed, the greater it will be.

TAE, yes, thank you for being an equal opportunity blog site. Cheryl=Blackbird=the lovely Asmita=Herbal Floyd etc

el gallinazo said...

The Anonymous

We have been over this ground quite a bit. Your problem is that you are trying to hedge yourself between two incredible fat tails. Either the system will continue as BAU which might include a moderate inflation tax, or the entire system will crash by defaulting on its debt. The latter could occur via a straight deflationary default or a de facto hyperinflationary default. The former would be the natural outcome. The latter would be a political choice by the banking cartel as passed down to its political hookers. I&S maintain that the global banking cartel (though they often refuse to recognize its existence) does not have the firepower to throw the USD, the current world reserve currency, into hyperinflation. Actually, when defined as the sum of the world's money and credit, they have been unsuccessful so far in reversing the contraction of the shadow banking system credit.

But back to the topic sentence as the English teachers of yore would put it. As Michael Hudson put it, "debts that cannot be repaid, will not be repaid." I don't see the possibility of BAU as usual as debts have become unsupportable, and the only solution that the elite have come upon is to keep the Ponzi going with one last bubble, namely sovereign debt. But now that is collapsing as well, most rapidly in the EZ, but Japan is not far behind. The USA will probably be the last to go. When dealing with these extremes of outcome, it is really impossible to hedge anymore than one can ride two horses going in opposite directions. In short, your quest is shit out of luck. Time to pick your nag and let the horse chips fall where they may.

For my money, what little I have of it, I go along at the moment with TAE position of a deflationary depression for two reasons. The first is that I&S may be correct that the central bankers will not be able to precipitate a hyperinflationary default even if they should choose to attempt it. The second, and for me the stronger reason, is that they would regard hyperinflation of the USD as contrary to their interest, at least until they could institute a replacement global currency through the IMF, and they are not ready for that yet at this point in history, though it is certainly part of their agenda.

One of our arch hyperinflationistas, John Williams, was interview by Jim Puplava Friday, and it reminded me of their arguments. When push comes to shove, they say that the Fed will hyperinflate to keep their unfunded mandates nominally functional. This will be a political decision. What he and many others refuse to realize is that there is a far more likely scenario. Which is that the government will cancel these mandates such as Social Security, Medicare, Food Stamps, Unemployments insurance, FDIC - in short the entire social safety net. And they will deal with the social unrest with bullets from the military and paramilitary, not to mention some far more exotic weapons kept pretty much under wraps until now. The global elite has seen this coming for well over a decade and it has instituted and systematically executed a plan to turn the country which it delegated as the global "enforcer," the USA, into a total police state. With the revocation of most of the Bill of Rights including habeas corpus, and the country now under de facto martial law, we are entering the end game. Once again, the point that I am making is this: the hyperinflationistas admit that the "natural" course of events would be hyperdeflation, but the politicians will shift it to HI order to meet unfunded mandates. I maintain that they are dead wrong. The social safety net will be destroyed virtually overnight, and former eaters who do not like it can choose to be massacred as an alternative.

el gallinazo said...


Regarding any statement that Nicole is "anti-gold:" As someone who has read 98%+ of all lead articles and comments of TAE, this is ridiculous. Nicole simply states that gold is not the panacea that many envision it to deal with the apocalypse for a variety of reasons, and not the least of which is that it will be confiscated by the government thugs or thugs from the private sector. If you have the cash and are willing to sit on it for 20 years, she does recommend it as an adjunct to preserving individual wealth.

While Nicole and I agree on most things, in my opinion, for whatever reason, she has a very poor understanding of the goals, strategy, and tactics of how the global banking elite / security state controls and intends to continue their control of the 99.9999% of the world's useless eaters. She sees the elite as essentially individual and competitive feudal lords and takes a thermodynamic overview of how things will develop. While in the very long run, I also say that the globe will push toward a constant equilibrium balance of energy, the path that it will do so will be strongly influenced by the conscious and coordinated strategies and tactics of the global banking elites, though in the end they will lose all control. IMO, Nicole's unwillingness to properly integrate this factor into her "biggest picture," is the primary reason that her probability assessments of timing have been off. To make proper probability assessments, one must have access to and use all the data available. I may write on this topic in further detail.

Ash said...


Although the motives of large ratings agencies have been and probably still are wicked, they do provide good analysis of our society's teetering credit situation from time to time. So goes Goldman Sachs and the other zombie vampires, for that matter. A lot of the blow back against the agencies in Europe (specifically S&P), usually involving harsh criticism/accusations, but sometimes involving police raids and proposals to make the ratings actions irrelevant (!?), is clearly reflecting an inability of politicians to confront the reality of the massive debt situation over there; to accept the fact that BAU is dead and gone, and a few Summits here and there ain't gonna bring it back.

Ash said...

btw, this is the worst proposed model for a ratings agency I have ever read (not that I have read many)...

"The proposed model is of an agency where the service is paid by the clients, who have an interest in having reliable and objective results," Berger said.

Roland Berger partner Markus Krall, who is largely tasked with setting up the agency, told Germany's Euro am Sonntag weekly that it would differentiate itself from competitors by accepting liability for its analysis.

This would mean customers could potentially claim damages from the agency, which Krall said provides a "strong incentive" to provide accurate analysis.

"Currently ratings are legally speaking purely opinion and are not subject to any product liability (laws)," Krall told the paper in comments published on Saturday."

el gallinazo said...


I think it is a wonderful model for a credit rating agency with the exception that it would probably go bankrupt within three months.

seychelles said...

RPrechter in his January Elliott Wave Theorist: wave 3 (personality: I finally get it) to activate (watch out below) by end of Q1 2012 to satisfy Fibonacci symmetry. Reasoned socionomic argument against HI outcome also detailed in this excellent issue (paid sub.).

sumacarol said...

I think that there are significant challenges for some of us in the “risk” evaluation exercise ( assuming one is going about it honestly). One challenge is the simple intellectual ability to maintain perspective on the monumental size of the downside risk, even if one could say that “collapse” isn’t going to happen with certainty within x years. I think that it is simply very hard to keep the proper perspective on this and, to the extent that we have difficulty, we complain about the costs of avoiding the risk. (Kind of like complaining about how far you have to move to avoid the tsunami…) Added to this challenge is the fact that, for many of us, we are on a day to day basis going about our lives surrounded by people and a society that desperately wants BAU, adding some serious “counter herd” social discomfort to the intellectual challenge. My mind jumps back and forth on this on a daily basis. I am “acting as if” it is real because the data are simply too compelling to ignore. At the same time I would be dishonest if I were to deny that there are times when I feel quite uncomfortable.
Setting this risk assessment aside, it strikes me that the decisions I have made, based on the information here, have brought me to a better place in my life on many levels. Living within our means and avoiding debt and scams like the stock market seems to be fundamentally good and appropriately limiting, no matter what comes. Learning basic skills, which I am slowly doing, is also a healthy grounding endeavour, as is trying to grow some of our food and building community. Seriously, even if life goes on and someone moves Niagara Falls down the river past my best before date, I can’t see anything wrong with this way of living.

Ash said...

El G,

Sounds to me like it would end up being just another impotent rubber stamping agency, as the threat of costly and complex litigation lingers over every single downgrade decision made (and those downgrades should be pervasive in upcoming years).

el gallinazo said...


If the big three credit rating agencies had liability for their miracle alchemy converting dogshit mortgages to AAA MBS, even the Fed's alphabet soup program couldn't have saved them.

--- said...

TAE Summary

"Mene, mene, tekel, shut-upsharin"

You ever outdo yourself. Love it.

Ash said...

El G,

Perhaps I misunderstood the article. I thought it was talking about creating an agency that has liability for the direct effects of ratings actions on credit valuations, presumably if the actions are deemed by a court to be unjustified for whatever reason. That would massively skew the incentives of the agency towards not taking negative actions when they otherwise should in this macro-environment, which of course is exactly what the Eurocrats want right now. But maybe that's not what it meant.

ogardener said...

Blogger Herbal Floyd said...

@ ogardner -- Nixon did it for me....

And Johnson was more principled?

Have you listened to the Johnson White House recordings with McNamara?

How about Kennedy?
Roosevelt? and the 1943 decision to initiate aerial bombing campaigns specifically targeting civilians.

Those dudes were before my time man. Although I think Gee W. Shrub topped Nixon in war crimes and crimes against humanity. That is not to say that O'bummer and Ilse Koch Clinton do not have blood on their hands. Besides it's not about Democrats and Republicans now. It's about the fascist corportocracy.

Ruben said...

Sumacarol +1

--- said...

Hombre touché,

I was scrolling down precisely to see if anyone else had recalled those lyrics.

You beat me it.

Lynford1933 said...

Ash: Just a bit of history. It used to be that if I wanted to invest in XYZ I could contact a rating agency and pay them to evaluate XYZ in detail and I could use their expert opinion to better invest. There were many agencies and some were better and more expensive than others. A while back the rating agencies changed their mode of operation so that XYZ could "buy" a rating which was supposed to be unbiased. As we know, the banks bought AAA ratings on the toxic sub prime mortgages and thus sold them to anyone who needed a AAA rating to invest.

This "new" rating agency is going back to the old mode of operation which IMHO is much better than the present bubble making rating machines. Adding liability to the "new" rating is something new and I don't know how that may work out.

The old model was that if the rating agency gave bad information, there were multiple rating agencies available so they soon went out of business.

Another factor was that the government got into the certification of rating agencies and will only certify reliable agencies; whatever that means since S&P and Moody's did not lose their certification for their sub prime AAA rating fiasco. All the other rating agencies went TU without government certification which was probably bought and paid for through re-election contributions as so much of our "The Best Government Money Can Buy" is and has been for a long time.

It is difficult to believe the badness created by these Alpha Hotels.

Lynford1933 said...

Another point worth mentioning. S&P and the other rating agencies are paid up front for a rating. I don't know who is paying for the recent sovereign downgrades but whether they are valid or not is not so important as someone is paying for the rating.

Again, enlightenment can be gained from "Follow the Money". But that may be several levels deep so as to make it hard to find.

BTW: To the extent of my "here and now" awarness all this is not too important, just interesting, and does not change the sign on the corner which went up 3 cents to $3.45.9 a couple days ago.

Asmita said...

@ El G:
See Born Rich

El G said:
"[Nicole] has a very poor understanding of the goals, strategy, and tactics of how the global banking elite / security state controls ....She sees the elite as essentially individual and competitive feudal lords"

See Jamie Johnson and heir to J&J fortune:

Born Rich 1

More Born Rich

Alexander Ac said...

From Tim Garrett's latest paper:

If civilization does not collapse quickly this century, then CO2 levels will likely end up exceeding 1000 ppmv; but, if CO2 levels rise by this much, then the risk is that civilization will gradually tend towards collapse.


Frank said...


For whatever reason, the ratings agencies do their sovereign ratings pro bono.

el G. The 'customer pays' model was used by rating agencies for decades. While messing up was not punished as quickly or as severely as you advocate, it did much better than the current system. The agency did have an incentive to be right, or it would not get repeat business.

Nassim said...

MUTUAL mistrust and contempt bordering on hatred between local and foreign forces are among the chief reasons Afghan troops turn their guns on their NATO comrades, according to a report for the US army.

Research by Jeffrey Bordin, a behavioural scientist commissioned by the US military, found American soldiers enraged their Afghan colleagues with extreme arrogance, bullying and ''crude behaviour''.

It criticised as ''profoundly intellectually dishonest'' NATO claims that the killing of alliance troops by Afghan soldiers was rare.
For their part, the Afghans have been provoked into fights, and even attempts to kill, by American behaviour. This includes urinating in public, cursing at, insulting and being rude and vulgar to Afghan members, and ''unnecessarily shooting animals''.

'Mistrust, contempt' divide NATO mission

Quite obvious stuff really. I wonder why it took so many years to work it out.

el gallinazo said...


Let me be very clear. First, I find you to be one of the most objectionable commenter on this web site ever, even more vicious than Cheryl Butthead, though you are likely a man and the same individual. Second, I have the highest respect for Nicole. She is one of the most ethical people I have ever known and also one of the most intelligent. We have basically one difference in our entire outlook. This centers around what the MSM chooses to call "conspiracy theories" and what I choose to call "the global security state disinformation campaign," with which the security state chooses to cover up its various mass and individual murders and atrocities with bogus bullshit. Her recent interview with KMO brought this one difference in our outlook to the fore, and I wished to express my contrary views on this specific area. Other than that, we see eye to eye on pretty much everything.

Asmita said...
This comment has been removed by the author.
Ash said...


I believe the root of the problem is the fact that ratings agencies are private corporations that provide "a service" or "sell a product", especially in our current world where "customers" are both investors in and issuers of securities. It would be much better if they were non-profit public agencies through which all debt securities must pass. Anyway, Lynford is saying the new agency would only allow potential investors to "buy ratings/analysis" on third party securities, which could be a marginal improvement?

Lynford and El G may be correct that the products liability aspect is theoretically a positive modification, since agencies would be more careful in rating everything as a high-grade investment (but, as El G noted, it wouldn't help them attract the major banks). The problem I'm having is that this seems to be a response to the downgrade actions by the US agencies, i.e. create a new agency for Europe that won't be so quick to pull the trigger.

Will the standing to sue extend to any investor that was materially affected by the credit analysis and ratings action, or only the "customer" who requested the service? If it's true products liability, then probably the latter, but if its more along the lines of "false advertising" liability, then perhaps the former as well.

Stoneleigh said...

Further comments by Asmita will be automatically spammed.

Ash said...

After re-reading the article, I see that it calls the new agency a "private, non-profit organization" and that "customers" could claim damages under products liability law. So perhaps it is a significantly better model after all. Still don't get the connection to this, though:

"European policymakers have criticised agencies Standard & Poor's (MHP.N), Moody's (MCO.N) and Fitch (LBCP.PA) during the euro zone debt crisis, saying they have been too quick to downgrade the credit ratings of indebted EU states despite bailouts and austerity programmes."

Maybe, as a quasi-ward of the EU "state", they figure it will go very easy on the sovereign downgrades.

Chas said...

I've never heard the term "preppers" before.

el gallinazo said...


Do you really think that the readership of this blog is going to fall for your stupidity as presented as Asmita or Winthrope. It is time to consult your handlers and your psychiatrist. Do you also like to cross dress in the meat world?

Stoneleigh said...

Comments are temporarily closed due to persistent spamming. If you would like to make a comment, feel free to email it to us and we will post it for you. We are sorry that reasonable discussion is being disrupted by one deranged individual (with many nominal identities).

Stoneleigh said...

From George:

Thoughts on the Crisis of Capitalism

Ashvin said...

comments open

Greenwood said...

Max and Warren Pollack in a gab-fest on bank holidays being the next shoe to drop.

Polllock says we are officially into a new phase of complete financial lawlessness.

Max says, this is nothing new, since Reagan got in, the First Phase of Financial Rape&Pillage in financial lawlessness was actually a template from the get-go, the S&L armageddon was the conclusion of this the first phase of wholesale global robbery.

After the actual prosecutions by Bill Black et al of the culprits responsible for the S&L looting, the 1% criminal class realized they had to change the laws, just before they wanted to break them, to make what ever they did 'legal'.

The Second Phase of Financial Rape&Pillage had begun.

Part II was the corruption of the political class to the point of systemic non enforcement of regulation and deregulation of Glass-Steagall.

Reagan/Bush had kicked the legs out from various parts of Glass-Steagall, Clinton et al sawed off the remaining support columns.

I think of 911 as the beginning of the Third Phase of Financial Rape&Pillage

The poster child was Dumbass W telling all patriotic Americans, to paraphrase; go out and 'shop' like there was no tomorrow cause 'this sucker (the economy/ponzi) could blow any minute' if you didn't.

A priceless Kodak moment that was.

MF Global is the Fourth Phase of Financial Rape&Pillage.

Max and Warren Pollock outline the total lawlessness of this phase as just outright thievery in broad daylight, no need to skulk around the back alleys after dark, let it all hang out.

Reminds me of this sound bite:

"The more we do to you, the less you seem to believe we are doing it." ~Joseph Mengele~

Pollack then goes on to say that the MF Global court proceedings are setting up the legal precedent for a massive Bank Holiday by codifying the superior claims of the banks Uber Alles others, period.

Once this Brave New World 'legal' frame-up-work is carved in stone, a bank holiday scenario can proceed with all account holders, of any type, being completely stripped of all assets.

Pensions, trusts, bonds, savings accounts, checking accounts, the Full Monty.


g-minor said...

If Warren Pollock is correct and all asset accounts will soon be stripped, the move into hard goods should be soon.

Is that right?

Franny said...

IMO the problem with the big rating agencies is government interference with normal market forces. By putting a government blessing on some agencies but not others, the government created a cartel of agencies that was not subject to free competition and they have behaved badly as a result of this power. Independent rating agencies are a much better system. I find the ratings issued by Weiss Ratings, e.g., to be very useful.

Greenwood said...

In the Warren interview, Max laughs out loud that countries like Ireland, collectively clueless to a breathtaking extent, were told a couple years back they had to impose 'austerity measures' or risks having their 'ratings' lowered, only to do the austerity thing and irony of ironies have their ratings lowered because, as the sacred 'rating agencies' put it, your 'austerity measures' have cratered your economy's ability to service the interest payments on the bankers debts that WE, the sacred 'rating agencies', were instrumental in creating by labeling toxic garbage as AAA.

Pretty funny stuff. Luck of the Irish, aye?

Will all asset classes be stripped soon?

It will probably take at least a year or so to really step up the 'legal' precedents to put banks in front of all other parties in any and all bankruptcy proceedings and asset class claims.

Like the Nazi's, the 1% this time around the carosel of broken record history, want to make sure it's all 'legal' first before going to the Final Financial Solution.

Remember the Telco/phone companies wiretapping without a warrant clusterphuck?

The Telco/phone companies broke the law so Congress RETROACTIVELY made a law saying that what they did, breaking the law, was not in fact breaking the law.

This is not the same principle as giving a pardon to someone. A pardon assumes a crime was committed that is being forgiven.

Retroactivity in Law is an oxymoron. If I can make something that was patently illegal legal, I can do the reverse. Make something you did years ago that was legal, illegal, and hunt you down and prosecute you for it.

That extremely dangerous precedent will be used in a bank holiday scenario.

Since the Supreme Clowns never heard or ruled on a challenge to this retroactive law making, it stands as is.

So even if the banks steal your assets, what ever they do can be protected, RETROACTIVELY, by a law from Congress and signed the Executive Clown in Chief.

They have all the bases covered :>)

Any questions?


Greenwood said...

Will anybody save us from the 1% Zombie Clowns before they devour us?

Time to Nut-up or Shutup


Stoneleigh said...


If Warren Pollock is correct and all asset accounts will soon be stripped, the move into hard goods should be soon. Is that right?

I would say what needs to be soon is getting assets out of the grip of the system, whether it's to hold them as cash or as hard goods. I do see short term treasuries as an exception to this, albeit not a long term one at all.

Stoneleigh said...


Agreed on your view of law. The powerful don't even try to hide it anymore. No one can expect legal niceties to protect them.

jal said...


"If Warren Pollock is correct and all asset accounts will soon be stripped, ..."

Cough cough!

Savings have already been stripped.

The losses have not been recognized.

The printing of money has only been to try to give liquidity to the "strippers".

It not that hard to see when you look at Greece and ask if there is anything that can be put back into the investors accounts.


Supergravity said...
This comment has been removed by the author.
Supergravity said...

The Critique of Practical Treason;
Burden of Proof.

Im calling seditious conspiracy against the sponsors of HR 3166 and s.1698, the Extralegal [Enemy] Expatriation Act, this legislation having the singular intent to destroy protected citizenship by facilitating forced expatriation on the basis of secret suspicions of treason as entertained by the executive expatriation/detention/execution panel, without criminal conviction, judiciary oversight or possibility of legal appeal.

These sponsors, mr Dent, mr Altmire, mr Lieberman and mr Brown, by attacking the constitutional vitality of the citizenry in a final assault on protected citizenship and all legal guarantees thereof, thus stand accused of seditious conspiracy to throw down constitutional government and the entire bill of rights by executive coercion and force of law, seditious conspiracy is an expatriatory crime if so convicted.

The applicable definition of terrorism:
"Domestic terrorism means activities that— (A) involve acts dangerous to human life that are a violation of the criminal laws of the United States or of any State;
(B) appear to be intended—
(i) to intimidate or coerce a civilian population;
(ii) to influence the policy of a government by intimidation or coercion; or
(iii) to affect the conduct of a government by mass destruction, assassination, or kidnapping; and
(C) occur primarily within the territorial jurisdiction of the United States."

The description of a crime, without qualification of conviction, in HR 3166 and s 1698:
"engaging in, or purposefully and materially supporting, any conflict subject to the laws of war, against the US."

The description of this crime which they're passing off as terrorism is the worst description of terrorism I've ever read, it doesn't resemble the legal definition and contains none of the usual qualifiers. This description is equivalent to the definition of treason, but the current law which they're changing already lists properly defined treason as an expatriatory act upon conviction.

This new description of a crime to be listed as expatriatory act does not require criminal conviction or legal process of any kind, but may be used indiscriminantly as grounds for forced expatriation by the POTUS' purge panel.

Here's Mr Dent, a principal suspect of this seditious conspiracy, explaining his intentions. Does this man look to be consciously engaged in seditious conspiracy?
He cannot plead ignorance or incompetence, he admids to knowing that treason is already listed as an expatriatory act, yet he sponsors a bill which describes the exact crime of treason, and not terrorism, as expatriatory act, but without the condition of proven guilt of this crime.

Only the purge panel presumes the authority to pass judgment on superficial appearances and secret suspicions of crime without evidence. The extralegal expatriation act however, is sufficient evidence to indict its sponsors, and agents of government engaged in its further enactment and implementation, of seditious conspiracy to subvert all judiciary protection of citizenship by force of the purge panel, with the intent to throw down and destroy the constitutional republic and its citizens.

This is the final protection to be lost, all enumerated rights only apply to citizens, there's nothing left to take away if people can be stripped of citizenship for no particular proven act without legal appeal, no veil between the citizenry and the tempest of tyranny.

Greenwood said...

A nice tip of the hat to TAE and Stoneleigh from the Kunstlercast as Jim K give credit and picks up on 'the Trust Horizon' meme originating here.

The MF Global supernova is the deal that, IMHO, has broken the 'trust buck'.

It's a bridge too far.

You'd have to be truly developmentally challenged not to wakeup and smell the burning rubber on this one.

I'm actually, finally, detecting hints of genuine fear in the voices of otherwise cornucopian wishful dreaming Jiminy Cricketers on this baby.

I think the herd is reluctantly, subliminally beginning to process one crack too many in their reality cocoons.

The top of the 99.99%ers who always assumed they were 'players' are seeing that they are, in reality, just chopped liver like the rest of the 'little people'.

They can not process this openly yet because, like extend and pretend accounting, they could not consciously admit they are Greater Fools.


Stoneleigh said...



ben said...

LG said,

"I also say that the globe will push toward a constant equilibrium balance of energy, the path that it will do so will be strongly influenced by the conscious and coordinated strategies and tactics of the global banking elites, though in the end they will lose all control. IMO, Nicole's unwillingness to properly integrate this factor into her "biggest picture," is the primary reason that her probability assessments of timing have been off. To make proper probability assessments, one must have access to and use all the data available."

is this unwillingness also yours to a lesser extent since you too raised the warning flag this past fall? earnest question.

i love it that, rather than timing, stoneleigh's primary goal is to get the most wherewhithal as possible out of The Corruption That Is The System (TCTITS) and into transitional structures because it seems to me too that this is what constitutes proper probability assessment for J6P.

scandia said...

@Greenwood, speaking of lawlessness,rape and pillage see Canada's version of MF Global...
Barret Capital Management has been trading with customer money....
Looks like Barret have scored a month to hide the evidence:)

Franny said...

Stoneleigh, curious if you would consider precious metals stored in a vault/depository (not a bank) to be out of the grip of the system as well? Or would you limit it to stuff in your possession?

Nassim said...

The 50 U.S. states are holding more than $32 billion worth of unclaimed property that they're supposed to safeguard for their citizens. But a "Good Morning America" investigation found some states aggressively seize property that isn't really unclaimed and then use the money -- your money -- to balance their budgets.

Unclaimed property consists of things like forgotten apartment security deposits, uncashed dividend checks and safe-deposit boxes abandoned when an elderly relative dies.

Banks and other businesses are required to turn that property over to the state for safekeeping. The problem is that the states return less than a quarter of unclaimed property to the rightful owners.

Not-So-Safe-Deposit Boxes: States Seize Citizens' Property to Balance Their Budgets


I hope this answers your question.

Nassim said...

According to in-house memos now circulating, the DHS has issued orders to banks across America which announce to them that “under the Patriot Act” the DHS has the absolute right to seize, without any warrant whatsoever, any and all customer bank accounts, to make “periodic and unannounced” visits to any bank to open and inspect the contents of “selected safe deposit boxes.”

Further, the DHS “shall, at the discretion of the agent supervising the search, remove, photograph or seize as evidence” any of the following items “bar gold, gold coins, firearms of any kind unless manufactured prior to 1878, documents such as passports or foreign bank account records, pornography or any material that, in the opinion of the agent, shall be deemed of to be of a contraband nature.”


Lynford1933 said...

Yess Nassim, yet another cut. I lst count a couple years ago.

Ilargi said...

New post up.

The End is the Beginning is the End