Monday, November 29, 2010
Luck of the Irish?
Gimme yer whiskey and gimme yer scotch. And throw in yer pensions while you're at it, lad. Apparently, investing in corporate bonds has become a risk free endeavor, as evidenced by the EU/IMF bailout of Ireland. No haircuts for bondholders of banks who imploded the system. But Irish pensioners get to devote 20% of their balance to protecting these banking bastards. Take to the streets, Ireland. First and foremost, do it for yourselves and your grandchildren. Secondly, do it for the rest of us. You see the global elites are performing a whole handful of litmus tests on the world's billions of serfs. And Ireland is one of them. They want to to see just how much sheeple can be pushed before they do something violent, something unpredictable, something that truly scares the living feces out of politicians. If all the Irish do is hold a few demonstrations, and then go back to their bleak way of life, then the elites can move on to Portugal, Spain, and then the mother of them all, our beloved U.S., and continue enslaving the populace. Pensions seized, coupled with austerity-led mass unemployment, and bingo: you have millions of slaves, and countless others who will view their own predicament as futile, and gladly follow suit, while glued to iphones, DWTS, and Jersey Shore.
Tuesday, November 16, 2010
The Fed vs Europe (and then China)
It's always here and now my friend, it ain't once upon a time
It's all over but the shouting, I come to take what's mine
We're searchin' for the latest thing, a break in this routine
Talkin' some new kicks, ones like you ain't never seen
This is home, (Ooh) this is Mean Street
(This is) Yes-ah home, only one I know
(This is home) See, a gun is real easy
(This is Mean Street) in this desperate part of town
(This is home) Turned to from hunted into hunter (Yeah)
(This is Mean Street) You go an' hunt somebody down
(This is home) Somebody said "Fair warning",
Lord(This is Mean Street) Lord, strike that poor boy down!
Van Halen - Mean Streets 1981
It's all over but the shouting, I come to take what's mine
We're searchin' for the latest thing, a break in this routine
Talkin' some new kicks, ones like you ain't never seen
This is home, (Ooh) this is Mean Street
(This is) Yes-ah home, only one I know
(This is home) See, a gun is real easy
(This is Mean Street) in this desperate part of town
(This is home) Turned to from hunted into hunter (Yeah)
(This is Mean Street) You go an' hunt somebody down
(This is home) Somebody said "Fair warning",
Lord(This is Mean Street) Lord, strike that poor boy down!
Van Halen - Mean Streets 1981
Muni Market Collapsing
This is what happens when city managers at little podunk ghost towns make $300k per year. Or Asst Finance mgrs pulling in $399k. Hey would you like to make $225,000/ yr with full benefits? Come be a firefighter 4 days a week in ShitholeVille. Rest of the week, just hang out at Hooters and/or work another job. Requirements when there are no fires: Watch a lot of porn and play the NFL spreads.
Gold: What if We're Wrong
So the Monex guy tells me to buy some gold and silver and store it with Monex. "If you keep it in the banks, the govt could seize it." I responded that he was nuts if he thought the long arm of the feds would consume only banks and not metals dealers like Monex.
But I got to thinking: What if I did everything right in trying to stay one step ahead of the Fed Reserve. I bought gold and silver just before our currency collapse, stored it safely, and now watched it surge 50 fold in a few days. "I'm rich!" "I've outsmarted Ben Bernanke!"
Then I see the headline during an Obama press conference: US Govt to Confiscate All Gold and Silver. To be Converted into New Bancor World Currency.
For those of you who think I'm ingesting Peyote (I actually am, but thats besides the point here), Roosevelt confiscated gold in the 1930s and its owners got a devastating exchange rate into dollars. Failure to comply resulted in 20 years in prison or sex with Babe Ruth. Most opted for prison time.
Lets say I agree to the exchange. WOW! The govt didnt even give a reach-around while they converted my gold/silver into a tenth of their value. Here's how I know. One bar of gold pre-confiscation got me about 16 barrels of oil. These new Bancors would only get me about a barrel and a half, if I had to estimate.
Fuck it. I'm keeping my metals, I say to myself. OK. So now I need some shit: Burritos, gas, Table dances. You can't exactly stick a bar of silver in a G-string. She might get a broken toe. All the metals dealers/banks are in compliance. Can't go there. The Mexican Cartels will give me 2x what the feds will, but they also need to use my garage to make some viagra-laced crystal meth. And no, they won't give me any free shit.
So I'm fried. I did everything right. Stayed one step ahead of Ben and Tiny Tim, invested wisely, got rich on paper if only for an instant. In the end it didnt matter. Oh and all the other metal bugs are in my shoes too. They're all looking to cash out for something of value. So black markets aint much better. Now all you Bernanke-loving assholes see why sound money policy is something not to be fucked with.
But I got to thinking: What if I did everything right in trying to stay one step ahead of the Fed Reserve. I bought gold and silver just before our currency collapse, stored it safely, and now watched it surge 50 fold in a few days. "I'm rich!" "I've outsmarted Ben Bernanke!"
Then I see the headline during an Obama press conference: US Govt to Confiscate All Gold and Silver. To be Converted into New Bancor World Currency.
For those of you who think I'm ingesting Peyote (I actually am, but thats besides the point here), Roosevelt confiscated gold in the 1930s and its owners got a devastating exchange rate into dollars. Failure to comply resulted in 20 years in prison or sex with Babe Ruth. Most opted for prison time.
Lets say I agree to the exchange. WOW! The govt didnt even give a reach-around while they converted my gold/silver into a tenth of their value. Here's how I know. One bar of gold pre-confiscation got me about 16 barrels of oil. These new Bancors would only get me about a barrel and a half, if I had to estimate.
Fuck it. I'm keeping my metals, I say to myself. OK. So now I need some shit: Burritos, gas, Table dances. You can't exactly stick a bar of silver in a G-string. She might get a broken toe. All the metals dealers/banks are in compliance. Can't go there. The Mexican Cartels will give me 2x what the feds will, but they also need to use my garage to make some viagra-laced crystal meth. And no, they won't give me any free shit.
So I'm fried. I did everything right. Stayed one step ahead of Ben and Tiny Tim, invested wisely, got rich on paper if only for an instant. In the end it didnt matter. Oh and all the other metal bugs are in my shoes too. They're all looking to cash out for something of value. So black markets aint much better. Now all you Bernanke-loving assholes see why sound money policy is something not to be fucked with.
It Can't Happen Here, Part I
By the time you have started reading this, it is already too late. It already was too late long ago. But they won't tell you that. Think I exaggerate? Then indulge me.
The current collapse was presaged long ago in the prior collapse. The revoking of the Glass Steagall Act of 1934 by the Gramm Leach Bliley Act of 1999 brought the big banks back into the financial markets for the first time in 60 years. How easily forget why the banks were kept out of financial speculating. How easily we forget why they were regulated (such an abhorrent word these days) and the disaster that precipitated their being essential. How easily forget that American Capitalism is not and never was Laissez Faire Capitalism. It has always operated with regulated markets. To the Glass Steagall Act of 1934, add the Securities Exchange Acts of 1933 and 1934 and antitrust law. Because once the banks began speculating in the markets, it was only a matter of time before they lost their asses, and this collapsed the commercial lending system that fuels the Main Street economy. Instead of passbook savings and secured lending, the banks were trading in new, complex fraud schemes with fancy names. "Collateralized Debt Obligations," "Credit Default Swaps," "Mortgage-Backed Securities," and "Derivatives," each a house of cards resting ultimately upon very little, or nothing. As the Ancient Greek described the foundation of the world, he explained. The Earth as we know it is held on the shoulders of Atlas, who stands upon the backs of giant elephants, who, in turn, stand on the backs of even larger turtles. When asked, as would be expected, what the turtles are standing on, the Ancient Greek quipped, "Oh, yes, after that, it is turtles all the way down."
So they deregulated the securities industry, exempting these new-found fraud schemes from oversight. In this holy "free market," they could trade and re-trade the instruments over and over, to their hearts' content. When the music stopped, and everyone had to find a chair, there weren't enough to go around. In the 60 Minutes interview, when the bank executive was asked how many derivatives there were issued out there, he responded in the range of $12 trillion worth. In the aftermath of the collapse of the value of the derivatives, however, it was exceedling hard to gauge the fallout. However, when asked how many of the instruments were held by his bank, his answer was an astonishing, "I don't know."
You see, when you trade a stock, a regulated security, the Securities Exchange Commission tracks the sale, the price, and who eventually holds the stock. The Commission issues rules seeking to ensure that trading is as efficient and fair as possible. However, without regulation, no one knows who sold what, for what it was sold, or even in whose hands it now rests. With the collapse of the value of these "toxic assets," it became a fool's wager to loan to a bank that may have such assets somewhere in its vaults, if not on its books. With no one knowing who had the toxic assets, no one was willing to extend credit. Indeed, the balance sheet was fundamentally flawed because it omitted the "toxic assets." And so it began. The collapse of the commercial lending market, all starting with the de-regulation of the banks and the securities markets.
Then, just two weeks ago, the political hucksters and snake oil salesmen came calling. Seeing that average Joe Americans had been suckered, their 401K's collapsed in the house of cards, their small businesses unable to get financing for inventory and operations, and their cost of living increasing, these hucksters began preaching austerity. "How quaint, you see," they charmed, "the real problem here is spending." Just like you, we need to stop government stimulus spending. And what had been a stall began to develop into a irreversible, headlong dive.
And they said it couldn't happen here.
The current collapse was presaged long ago in the prior collapse. The revoking of the Glass Steagall Act of 1934 by the Gramm Leach Bliley Act of 1999 brought the big banks back into the financial markets for the first time in 60 years. How easily forget why the banks were kept out of financial speculating. How easily we forget why they were regulated (such an abhorrent word these days) and the disaster that precipitated their being essential. How easily forget that American Capitalism is not and never was Laissez Faire Capitalism. It has always operated with regulated markets. To the Glass Steagall Act of 1934, add the Securities Exchange Acts of 1933 and 1934 and antitrust law. Because once the banks began speculating in the markets, it was only a matter of time before they lost their asses, and this collapsed the commercial lending system that fuels the Main Street economy. Instead of passbook savings and secured lending, the banks were trading in new, complex fraud schemes with fancy names. "Collateralized Debt Obligations," "Credit Default Swaps," "Mortgage-Backed Securities," and "Derivatives," each a house of cards resting ultimately upon very little, or nothing. As the Ancient Greek described the foundation of the world, he explained. The Earth as we know it is held on the shoulders of Atlas, who stands upon the backs of giant elephants, who, in turn, stand on the backs of even larger turtles. When asked, as would be expected, what the turtles are standing on, the Ancient Greek quipped, "Oh, yes, after that, it is turtles all the way down."
So they deregulated the securities industry, exempting these new-found fraud schemes from oversight. In this holy "free market," they could trade and re-trade the instruments over and over, to their hearts' content. When the music stopped, and everyone had to find a chair, there weren't enough to go around. In the 60 Minutes interview, when the bank executive was asked how many derivatives there were issued out there, he responded in the range of $12 trillion worth. In the aftermath of the collapse of the value of the derivatives, however, it was exceedling hard to gauge the fallout. However, when asked how many of the instruments were held by his bank, his answer was an astonishing, "I don't know."
You see, when you trade a stock, a regulated security, the Securities Exchange Commission tracks the sale, the price, and who eventually holds the stock. The Commission issues rules seeking to ensure that trading is as efficient and fair as possible. However, without regulation, no one knows who sold what, for what it was sold, or even in whose hands it now rests. With the collapse of the value of these "toxic assets," it became a fool's wager to loan to a bank that may have such assets somewhere in its vaults, if not on its books. With no one knowing who had the toxic assets, no one was willing to extend credit. Indeed, the balance sheet was fundamentally flawed because it omitted the "toxic assets." And so it began. The collapse of the commercial lending market, all starting with the de-regulation of the banks and the securities markets.
Then, just two weeks ago, the political hucksters and snake oil salesmen came calling. Seeing that average Joe Americans had been suckered, their 401K's collapsed in the house of cards, their small businesses unable to get financing for inventory and operations, and their cost of living increasing, these hucksters began preaching austerity. "How quaint, you see," they charmed, "the real problem here is spending." Just like you, we need to stop government stimulus spending. And what had been a stall began to develop into a irreversible, headlong dive.
And they said it couldn't happen here.
The System Must Fail
Its funny how a seemingly meaningless moment can bring clarity to one's thought process. Corruption is flowing throught the heroin needle-puntured veins of society, and no amount of politcal will or anger (assuming it existed) can alter its course. The only way out is failure. That will require a re-building of the system. The question is: Who will do the re-building? The Bilderbergs, or Joe 6-Pack (J6P)?
Upon learning that my sister was suffering from mysterious body spasms that involved no diarrhea or vomiting or fever, and apparently resulted from her ingesting Gulf shrimp, I raised the possibility that BP's dispersant called Corexit (which is so toxic it is banned everywhere but here) could be the culprit. That remark sent my MSM father into an emotional tailspin. And that was the moment it dawned on me. You see, my father is a normal, generally fair-minded person. Hard-working, successful and not an extremist in any particular direction. So I asked myself, why would a man who is not on the lunatic fringe, be so upset over the mere possibility that the illness was caused by Corexit?
a) He owns a shitload of BP stock
b) He thinks I'm a dumbass
c) He hadn't heard it on Fox
d) It violates his belief system that our gov't would never let that happen
So I've concluded that if reasonable everyday people like my Da have no interest in hearing non-MSM theories/news, our system and way of life have no chance of survival. Catastrophe itself, not the possibility or foresight of catastrophe, is the only way the vast majority of Iphone/DWTS junkies will be convinced the system sucked/sucks.
Upon learning that my sister was suffering from mysterious body spasms that involved no diarrhea or vomiting or fever, and apparently resulted from her ingesting Gulf shrimp, I raised the possibility that BP's dispersant called Corexit (which is so toxic it is banned everywhere but here) could be the culprit. That remark sent my MSM father into an emotional tailspin. And that was the moment it dawned on me. You see, my father is a normal, generally fair-minded person. Hard-working, successful and not an extremist in any particular direction. So I asked myself, why would a man who is not on the lunatic fringe, be so upset over the mere possibility that the illness was caused by Corexit?
a) He owns a shitload of BP stock
b) He thinks I'm a dumbass
c) He hadn't heard it on Fox
d) It violates his belief system that our gov't would never let that happen
So I've concluded that if reasonable everyday people like my Da have no interest in hearing non-MSM theories/news, our system and way of life have no chance of survival. Catastrophe itself, not the possibility or foresight of catastrophe, is the only way the vast majority of Iphone/DWTS junkies will be convinced the system sucked/sucks.
Europe is Falling Apart
If Adolph were alive, he'd surely be revving up the tanks to march across the Rhine. Europe has a case of financial herpes, and they'll need to pump a lot of valtrex into this bitch to stop the burning. Ireland needs a rescue, and Portugal has indicated they'd like one also. Greece is also getting back in line for more since their accounting methods rivals that of a Mexican drug cartel moving funds through a Juarez used car dealership. After that, Spain could line up in what would likely be the most memorable Running of the Bulls, only it won't be red tomatoes we'll see in the streets.
All this means weaker Euro, stronger dollar, falling commodities/equities. And maybe the taco joint I frequent can rescind the 33% price increase instituted last week in response to Benny's Quantitative Easing-induced inflation.
All this means weaker Euro, stronger dollar, falling commodities/equities. And maybe the taco joint I frequent can rescind the 33% price increase instituted last week in response to Benny's Quantitative Easing-induced inflation.
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