What the End of QE2 Means for the Market

 The excellent adventures of Ben Bernanke, The Financial Elite, The Great American Heist, The Growing American Fascist State, The Importance of Strategic Planning, The Intrusion of UNLAWFUL Authority, Unemployment Catastrophe  No Responses »
Mar 192011
 

The Federal Reserve is scheduled to end its extraordinary program of support for the economy in June, but market participants debate whether policymakers will ultimately decide to deploy additional monetary stimulus to continue this stock market rally and, just as critically, what will happen if they do not.

What the End of QE2 Means for the Market – Josh Lipton, TheStreet

Posted by Brian Schuettler at 10:08 am  

Sometimes Moral Courage Is the Catalyst

 A Growing List Of One Term Presidents, A Moral Question - Not A Political One, A Picture Is Worth A Thousand Words, Patience is a virtue...Delusion is a vice, Political Chaos, Politicians, Prostitutes and Pimps All Rhyme, The Democrats Blew It Again, The Growing American Fascist State, The Importance of Strategic Planning, The Inherent Disorder of Empires, The Intrusion of UNLAWFUL Authority, The Judeo-Christian Political Coalition, The Obama OMG magic factory, The Oil Question, The Suffering Poor, Time For A New Third Party, Truth In Charity, Unindicted Co-Conspiritors, Unintended Consequences  No Responses »
Mar 122011
 

“Barack Obama’s policy toward the Libyan struggle for freedom is no longer a muddle. It is now a disgrace.

Here is what his administration and its allies have told the world, and the Libyan dictator, and the Libyan rebels, in recent days. The director of national intelligence declared before the Senate Armed Services Committee, in a chilling example of self-fulfilling prophecy, that “over the longer term Qaddafi will prevail.” The secretary of defense continued to insist that the imposition of a no-fly zone over Libya is too much for America to do, and to frighten the public with the warning that it would constitute a military operation, as if all military operations are like all other military operations, and therefore the prelude to the sort of wars that would require us, as he put it in an earlier outburst about Iraq and Afghanistan, to have our heads examined. ” Continue reading “Obama’s Libya Policy Isn’t a Muddle. It’s a Disgrace.”

Posted by Brian Schuettler at 10:42 am  

The Jobs Report & America’s Two Economies

 Our phony middle class, The End of American Capitalism As We Know It? - Discuss, The excellent adventures of Ben Bernanke, The Financial Elite, The Great American Heist, The Growing American Fascist State, The Habits of Hedge Funds, The Importance of Strategic Planning, The Inherent Disorder of Empires, The Intrusion of UNLAWFUL Authority, The Joy of Being A Bank, The New American Socialism, The Obama OMG magic factory, The Sorry State Of American Manufacturing, The Suffering Poor, Unemployment Catastrophe, Unindicted Co-Conspiritors, Unintended Consequences, Wage Deflation, We Are All Cooked, We Have Become Beggars To The World, Who Guarantees the Guarantor?-You Do!, Who owns Congress-Still!  No Responses »
Feb 062011
 

At a time when corporate profits are through the roof, the Dow is flirting with 12,000, Wall Street paychecks are fat again, and big corporations are sitting on more than $1 trillion in cash, you’d expect jobs be coming back. But you’d be wrong.

The U.S. economy added just 36,000 jobs in January, according to today’s report from the Bureau of Labor Statistics. Remember, 125,000 are needed just to keep up with the increase in the population of Americans wanting and needing work. And 300,000 a month are needed — continuously, for five years — if we’re to get back to anything like the employment we had before the Great Recession.

In other words, today’s employment report should be sending alarm bells all over official Washington. Granted, unusually bad weather may have accounted for some of the reluctance of employers to hire in January. But even considering the weather, the economy is still terribly sick. (Technical note: The official rate of unemployment fell to 9 percent from 9.4 percent, but that’s because more workers have left the labor market, too discouraged to continue looking for work. The official rate reflects how many people are actively looking for work.)

We have two economies. The first is in recovery. The second remains in a continuous depression.

The first is a professional, college-educated, high-wage economy centered in New York and Washington, that’s living well off of global corporate profits. Corporations continue to make money by selling abroad from their foreign operations while cutting costs (especially labor) here at home. Wall Street is making money by taking the Fed’s free money and speculating with it. The richest 10 percent of Americans, holding 90 percent of all financial assets, are riding the wave. And their upscale spending has given high-end retailers and producers a bounce.

The second is most of the rest of America, and it’s still struggling with a mountain of debt, declining home prices, and job losses. In coming months most Americans will also be contending with sharply rising prices of food and fuel.

Our representatives in Washington see and hear mostly the first economy. The business press reports mainly on the first economy. Corporate and Wall Street economists are concerned largely with the first economy.

But the second economy will determine our politics in 2012 and beyond.

And not even the first can be sustained permanently on its own. Corporate profits cannot continue to rise on the basis of foreign sales (which are slowing as Europe adopts austerity and China raises interest rates), the purchases of the richest 10 percent of Americans (which are dependent on a rising stock market), and cost-cutting measures at home (which are necessarily limited). Without a strong and broadly-based middle-class recovery, America’s big money economy will fall in on itself. A major stock market “correction” is a certainty.

Robert Reich is the author of Aftershock: The Next Economy and America’s Future, now in bookstores. This post originally appeared at RobertReich.org.

The Jobs Report & America’s Two Economies – Robert Reich, Huffington Post

Posted by Brian Schuettler at 2:25 pm  

The Elites – The Intrusion of UNLAWFUL Authority

 A Moral Question - Not A Political One, The Financial Elite, The Inherent Disorder of Empires, The Intrusion of UNLAWFUL Authority, The Suffering Poor, Unindicted Co-Conspiritors  No Responses »
Feb 022011
 

“It was possible, no doubt, to imagine a society in which wealth, in the sense of personal possessions and luxuries, should be evenly distributed, while power remained in the hands of a small privileged caste.

But in practice such a society could not remain stable. For if leisure and security were enjoyed by all alike, the great mass of human beings who are normally stupified by poverty would become literate and would learn to think for themselves; and when once they had done this, they would sooner or later realise that the privileged minority had no function, and they would sweep it away. In the long run, a hierarchical society was only possible on a basis of poverty and ignorance.”

George Orwell, 1984

Posted by Brian Schuettler at 9:03 pm  

Can Europe Be Saved?

 Analysis & Commentary, Collateral Damage, Coming Social Unrest, European Union?, PIIGS Default?, Political Chaos, Secularized Lending, Sub-Prime anytime, The Big Fat Greek Question, The Consequences of Greed, The Financial Elite, The Importance of Strategic Planning, The Inherent Disorder of Empires, The Intrusion of UNLAWFUL Authority, The Suffering Poor, Truth In Charity, Unemployment Catastrophe, Unindicted Co-Conspiritors, Unintended Consequences, We Need Open Derivative Models  No Responses »
Jan 172011
 

Paul Krugman does an excellent job of summarizing the genesis of the current crisis:

THERE’S SOMETHING peculiarly apt about the fact that the current European crisis began in Greece. For Europe’s woes have all the aspects of a classical Greek tragedy, in which a man of noble character is undone by the fatal flaw of hubris.

Enlarge This Image

Alfredo Falvo/Contrasto/Redux

ROME Students protested planned changes in the university system on Dec. 22 in Italy, where youth unemployment is about 25 percent.

Not long ago Europeans could, with considerable justification, say that the current economic crisis was actually demonstrating the advantages of their economic and social model. Like the United States, Europe suffered a severe slump in the wake of the global financial meltdown; but the human costs of that slump seemed far less in Europe than in America. In much of Europe, rules governing worker firing helped limit job loss, while strong social-welfare programs ensured that even the jobless retained their health care and received a basic income. Europe’s gross domestic product might have fallen as much as ours, but the Europeans weren’t suffering anything like the same amount of misery. And the truth is that they still aren’t.

Yet Europe is in deep crisis — because its proudest achievement, the single currency adopted by most European nations, is now in danger. More than that, it’s looking increasingly like a trap. Ireland, hailed as the Celtic Tiger not so long ago, is now struggling to avoid bankruptcy. Spain, a booming economy until recent years, now has 20 percent unemployment and faces the prospect of years of painful, grinding deflation.

The tragedy of the Euromess is that the creation of the euro was supposed to be the finest moment in a grand and noble undertaking: the generations-long effort to bring peace, democracy and shared prosperity to a once and frequently war-torn continent. But the architects of the euro, caught up in their project’s sweep and romance, chose to ignore the mundane difficulties a shared currency would predictably encounter — to ignore warnings, which were issued right from the beginning, that Europe lacked the institutions needed to make a common currency workable. Instead, they engaged in magical thinking, acting as if the nobility of their mission transcended such concerns.

The result is a tragedy not only for Europe but also for the world, for which Europe is a crucial role model. The Europeans have shown us that peace and unity can be brought to a region with a history of violence, and in the process they have created perhaps the most decent societies in human history, combining democracy and human rights with a level of individual economic security that America comes nowhere close to matching. These achievements are now in the process of being tarnished, as the European dream turns into a nightmare for all too many people. How did that happen?

THE ROAD TO THE EURO
It all began with coal and steel. On May 9, 1950 — a date whose anniversary is now celebrated as Europe Day — Robert Schuman, the French foreign minister, proposed that his nation and West Germany pool their coal and steel production. That may sound prosaic, but Schuman declared that it was much more than just a business deal.

For one thing, the new Coal and Steel Community would make any future war between Germany and France “not merely unthinkable, but materially impossible.” And it would be a first step on the road to a “federation of Europe,” to be achieved step by step via “concrete achievements which first create a de facto solidarity.” That is, economic measures would both serve mundane ends and promote political unity.

The Coal and Steel Community eventually evolved into a customs union within which all goods were freely traded. Then, as democracy spread within Europe, so did Europe’s unifying economic institutions. Greece, Spain and Portugal were brought in after the fall of their dictatorships; Eastern Europe after the fall of Communism.

In the 1980s and ’90s this “widening” was accompanied by “deepening,” as Europe set about removing many of the remaining obstacles to full economic integration. (Eurospeak is a distinctive dialect, sometimes hard to understand without subtitles.) Borders were opened; freedom of personal movement was guaranteed; and product, safety and food regulations were harmonized, a process immortalized by the Eurosausage episode of the TV show “Yes Minister,” in which the minister in question is told that under new European rules, the traditional British sausage no longer qualifies as a sausage and must be renamed the Emulsified High-Fat Offal Tube. (Just to be clear, this happened only on TV.)

The creation of the euro was proclaimed the logical next step in this process. Once again, economic growth would be fostered with actions that also reinforced European unity.

The advantages of a single European currency were obvious. No more need to change money when you arrived in another country; no more uncertainty on the part of importers about what a contract would actually end up costing or on the part of exporters about what promised payment would actually be worth. Meanwhile, the shared currency would strengthen the sense of European unity. What could go wrong?

Red the entire article at NYT:

Can Europe Be Saved?

By PAUL KRUGMAN

Is there any way to save Europe’s democracies from sinking together in the ill-conceived currency union?

Posted by Brian Schuettler at 10:26 am  

The Poverty Of Ambition: Why The West Is Losing To China And India

 The China Dilemma, The Consequences of Greed, The Democrats Blew It Again, The Dollar's Demise, The End of American Capitalism As We Know It? - Discuss, The Global Economy, The Importance of Strategic Planning, The Inherent Disorder of Empires, The Intrusion of UNLAWFUL Authority, The New American Socialism, The Obama OMG magic factory, The Sorry State Of American Manufacturing, Unintended Consequences, US Trade Imbalance, USA Is the New Japan, We Have Become Beggars To The World  No Responses »
Jan 012011
 

The last 10 years have been the worst for Western civilization since the 1930s. At the onset of the new millennium North America, Europe and Oceania stood at the cutting edge of the future, with new technologies and a lion’s share of the world’s GDP.  At its end, most of these economies limped, while economic power – and all the influence it can buy politically – had shifted to China, India and other developing countries.

This past decade China’s economic growth rate, at 10% per annum, grew to five times that U.S.; the gap was even more disparate between China and the slower-growing  E.U.,  Yet periods of slow economic growth occur throughout history — recall the 1970s — and economies recover. The bigger problem facing Western countries, then, is a metaphysical one — a malady that the British writer Austin Williams has dubbed “the poverty of ambition.”

This lack of ambition plagues virtually every Western country. The ability to act has become shackled by a profound pessimism that according to a recent Gallup survey

Attitudes have consequences. The rising stars of the non-Western world — from the United Arab Emirates to Singapore and China — are building cities with startling new architecture and bold infrastructure. Their entrepreneurs are expanding their operations across the planet. contrasts with the optimism found not only in rising states like China, India and Brazil, but also deeply impoverished places like Bangladesh.

Of course, you can chortle at the outrageous overbuilding in places like Dubai, but the Western world might do better to appreciate the scope of their ambition. Indeed, for years New York’s Empire State building, erected  during the Depression, was derided as  ”the empty state building.” Today it’s visionary developers like Iraqi-born Istabraq Janabi who are planning unlikely  new structures even  in  troubled places like Ramadi, Iraq.

The difference in ambition can be seen clearly at airports, which now serve as the entry halls of the global economy. A traveler to John F. Kennedy Airport, Heathrow, Charles De Gualle LAX or Dulles passes through decayed remnants of fading late 20th century buildings and technology. In contrast, airports in Dubai, Hong Kong and Singapore offer clean, ultra-modern facilities with often impressive design.

The West’s retreat from space exploration further underscores its metaphysical poverty. Today, Europe and the U.S., the world’s historic leader in the field, are cutting back on plans to explore the cosmos, which has included a manned operation to the moon. President Obama wants NASA to focus more on issues regarding climate change instead. In contrast, the rising countries of Asia, notably China and India, have begun plans for manned flights to the moon and beyond.

This divergence is not about resources; it is about the growing conviction in the West that moving forward is an illusion or, as the British academic John Gray’s puts it, “progress is a myth.”  Victorian empire-makers and intellectuals, like their republican American successors, believed perhaps naively in the potential of humanity, economic and technological progress. Today our intellectual and political classes have gone to the other extreme.

The West’s politics are in the grips of two profoundly retrograde mentalities. One, a small-minded conservatism, harks back to the “golden” age of the 1950s when Western power faced only a flawed Soviet challenge. The idealistic but flawed commitment to imposing democracy by force of the Bush years has faded; it has been replaced by an obsession with taming a bloated public sector. While this focus may be justified, it is fundamentally more reactive than proscriptive.

The Left, which once portrayed itself as the bastion of scientific rationalism, increasingly embraces neo-druidism, a secular form of nature worship. This tendency’s roots can be traced back to the “Limits to Growth” ideology of the early 1970s which projected, mostly mistakenly, that the planet was about to run out of everything from food to oil. Concerns over climate change have transformed this dismal sentiment into a theology, with carbon emissions treated as a form of original sin.

The anti-progress nature of the new Left is unmistakable. Rather than seek ways to control climate change, suggests The Guardian’s George Monbiot, environmentalism is engaged in “a battle to redefine humanity.” Monbiot believes the era of economic growth needs to come to an inevitable denouement; that “the age of heroism” will be followed by the decline of the “expanders” and the rise of the “restrainers.”

Europe, particularly the U.K., suffers acutely from metaphysical angst.  Once touted as the new great power by its leaders and their American claque, the E.U. is quickly dissolving along cultural and historical lines; this is especially evident in the division between the  resilient countries of the north (something like the Hansa trading states of the late Middle Ages) and the weaker countries along the periphery. For the most part, Europe no longer seems capable of doing much more than finding ways to control an unaffordable welfare state without tearing about its social net. The once cherished notion of a multi-racial “new” Europe largely has dissolved as immigration has devolved from a source of demographic and cultural salvation to a widely perceived threat to the E.U.’s economic and social health as well as security.

Such defeatism usually has less success in the United States. But America’s “progressive” left increasingly resembles its European cousins.  Obama’s science advisor, John Holdren, has been a long-time advocate of the idea of “de-development,” the purposeful slowing of growth in advanced countries in order to protect the environment. The critical infrastructure needed to accommodate upward of another  100 million Americans — new dams in the west, intelligent development of our vast natural gas reserves and building new cities, airports and ports  – are not at the center of either party’s platforms. These could be financed largely with private sources, given the right incentives.

Read it all: Poverty of Ambition: Why the West Is Losing to China – Joel Kotkin, Forbes

Posted by Brian Schuettler at 10:26 am  

Rattner to Pay $10 Million to Settle Pension Kickback Case

 Public Pension Crisis, The American Financial Oligarchy, The Arrogance of Power, The Consequences of Greed, The Financial Elite, The Intrusion of UNLAWFUL Authority, The Suffering Poor, Unindicted Co-Conspiritors  No Responses »
Dec 312010
 
Steven L. Rattner Brendan Hoffman/Bloomberg NewsSteven L. Rattner agreed to pay $10 million to settle charges brought by the New York attorney general.
http://dealbook.nytimes.com/2010/12/30/rattner-settles-with-cuomo/?nl=todaysheadlines&emc=tha2
Posted by Brian Schuettler at 9:40 am  

The time for honoring yourself, Ben Bernanke, will soon be ended

 The American Financial Oligarchy, The Arrogance of Power, The Bear Facts, The Consequences of Greed, The excellent adventures of Ben Bernanke, The Financial Elite, The Intrusion of UNLAWFUL Authority  No Responses »
Dec 052010
 

The image “http://upload.wikimedia.org/wikipedia/en/f/f3/Liberty_Forum_Ron_Paul.jpg” cannot be displayed, because it contains errors.

Retiring New Hampshire Senator Judd Gregg, one of the Federal Reserve’s most stalwart Republican supporters, showed up for a meeting at the central bank in November bearing a surprising gift: a box of End the Fed books. As he handed out the 2009 best seller by Representative Ron Paul, a longtime Fed critic, Gregg told the gathering it would be worth reading to see what the other side is plotting.
Fed Lent Early And Often On Easy Terms – Frank Partnoy, Financial Times
America Bails Out a Thankless World – Editorial, Investor’s Business Daily
Ron Paul’s Moment Arrives – Schmidt & Mattingly, Bloomberg BusinessWeek

Posted by Brian Schuettler at 5:55 pm  

Let’s save the dollar, not Bernanke’s pride

 The excellent adventures of Ben Bernanke, The Financial Elite, The Geithner Resignation Watch, The Inherent Disorder of Empires, The Intrusion of UNLAWFUL Authority, The Obama OMG magic factory, The Suffering Poor, Unintended Consequences, US Trade Imbalance, USA Is the New Japan, We Have Become Beggars To The World, Who owns Congress-Still!  No Responses »
Nov 282010
 

The problem with government is that when it isn’t benefiting politicians, bureaucrats and special interests at the expense of everyone else, its handy work is aimed at the symptoms of problems rather than at the problems themselves. This misdirection not only masks the true cause of problems it also exacerbates them, which, as Ronald Reagan said, makes government part of the problem, not the solution. The more problems government attempts to solve, the more new problems it creates for itself to solve, a sort of bureaucratic perpetual motion machine.

The Federal Reserve Board is a case in point. Ostensibly created to maintain price stability, the Fed has actually feathered the nest of the banking cartel it created and produced a century of monetary instability and ancillary economic problems.


Let’s Save the Dollar, Not the Federal Reserve – Lawrence A. Hunter, Forbes
The Looming Duel Over the Fed’s Dual Mandate – Peter Schiff, National Post

Posted by Brian Schuettler at 11:29 am  

US Treasury and Fed speak with forked tongue

 Dollar Musings, The American Financial Oligarchy, The Arrogance of Power, The Big Fat Greek Question, The China Dilemma, The Consequences of Greed, The Currency Wars Officially Begin, The Democrats Blew It Again, The Dollar's Demise, The End of American Capitalism As We Know It? - Discuss, The excellent adventures of Ben Bernanke, The Inherent Disorder of Empires, The Intrusion of UNLAWFUL Authority, The Suffering Poor, Unemployment Catastrophe, Unindicted Co-Conspiritors, Unintended Consequences, USA Is the New Japan, Wage Deflation, Who owns Congress-Still!  No Responses »
Nov 112010
 

Who is in charge? Who is coordinating policy?

Geithner: Strong Dollar!

Bernanke: Weak Dollar!

Huh????????????

BJS

_________________________________________________________


The US is pursuing a policy of weakening its currency which is driving up exchange rates in the rest of the world, according to Alan Greenspan, the former chairman of the Federal Reserve.

Writing in today’s Financial Times ahead of the G20 meeting in Seoul, Mr Greenspan argues that with China also holding down the renminbi, the upward pressure on currencies elsewhere risks a return to widespread trade protectionism. Mr Greenspan criticises China for continuing to prevent the renminbi strengthening, saying it reflects a misguided view that a weak currency is necessary for export growth and political stability. “China has become a major global economic force in recent years,” he writes. “But it has not yet chosen to take on the shared global obligations that its economic status requires.” More unexpectedly, Mr Greenspan adds: “America is also pursuing a policy of currency weakening.”

Posted by Brian Schuettler at 2:38 pm  

It’s Time For The Fed To Stop Screwing Savers And Bailing Out Banks And Borrowers With 0% Rates

 A Picture Is Worth A Thousand Words, The excellent adventures of Ben Bernanke, The Inherent Disorder of Empires, The Intrusion of UNLAWFUL Authority  No Responses »
Oct 102010
 

Charles Schwab has written an eloquent plea in the Wall Street Journal calling for the end of the Fed’s zero-interest rate policy.

We second that plea.

The Fed’s zero-interest-rate policy, now going into its third year, is hosing people who are responsible and live within their means and rewarding people and companies who don’t (or didn’t) — or who don’t need the help.

Anyone who has saved money is being screwed by this policy. Anyone who borrows money is being rewarded.

For example, the Fed’s zero-interest-rate policy is still giving a gigantic subsidy to banks by allowing them to borrow money from the government for nothing and then lend it back to the government at a ~3% interest rate.  The spread on this trade continues to produce massive Wall Street profits, and, with them, enormous bonuses–without any of the risk that is normally supposed to accompany such profitability. Once again, this policy rewards those who helped cause the crisis in the first place, at the expense of those who didn’t. (If you don’t understand how great it is to be a banker right now, read “How To Make The World’s Easiest $1 Billion“).

Why does the Fed have a “zero-interest rate” policy?  To stimulate borrowing.  If money is free, the theory goes, people and companies will borrow a boatload of it–and they’ll use it to buy stuff, make investments, and create jobs.

In a garden-variety cyclical recession, this policy works.

But this time it’s not working.

Why not?

Because this isn’t a garden-variety recession.  This is a recession caused by too much debt. (A balance-sheet recession, as the economists say).

You can’t borrow your way out of a debt problem. You have to get out of it by doing what American consumers are now doing despite the Fed’s attempts to stimulate more borrowing: by spending less, saving more, and paying down (or restructuring) your debts.

Continue reading at Clusterstock: Those Jobs Numbers Were Horrible, And The Fed’s Next Move Won’t Really Help Anything

Bernanke

I shall now drop MORE money from helicopters–over Wall Street.

Image: AP

See Also:

Prediction: Things Will Unravel Faster Than You Think

Prediction: Things Will Unravel Faster Than You Think

donald trump

How To Make The World’s Easiest $1 Billion

Paul Krugman

Krugman: We’re Going To Have To Default On Our Debt One Way Or Another


Charles Schwab has written

Posted by Brian Schuettler at 5:33 pm  

After China, the Fed’s Now the Largest Owner of US Treasuries

 Deflation-Inflation-Stagflation, Dismal Science-Ignorant Scientists?, Economic Analysis Isn't Science, Federal Reserve-Discussion, Is The Market Rally Real?, Let's Call What It Is - DEPRESSION, Monetary Policy - Discussion, Political Chaos, TARP fruit loops, The American Financial Oligarchy, The Arrogance of Power, The Consequences of Greed, The End of American Capitalism As We Know It? - Discuss, The excellent adventures of Ben Bernanke, The Financial Elite, The Importance of Strategic Planning, The Inherent Disorder of Empires, The Intrusion of UNLAWFUL Authority, The Obama OMG magic factory, The Sorry State Of American Manufacturing, The Suffering Poor, Unemployment Catastrophe, Unindicted Co-Conspiritors, Unintended Consequences, US Trade Imbalance, USA Is the New Japan, Wage Deflation, Want To Buy A Car?, Watch The China Market, We Are All Cooked, We Have Become Beggars To The World, Who Guarantees the Guarantor?-You Do!, Who owns Congress-Still!  No Responses »
Oct 102010
 
leadimage

10/09/10 Stockholm, Sweden – Just this week an inevitable milestone came to pass, the Federal Reserve surged ahead of Japan as the second largest owner in the world of US debt… second only to China. Of course, the funds used to generate that massive debt position have only been made possible through the smoke and mirrors of quantitative easing. Zero Hedge notes this, and two other generally under-reported US debt facts, in a recent post.

Here’s the short version:

“#1: The US Fed is now the second largest owner of US Treasuries… Setting aside the fact that this is abject lunacy, this policy is trashing our currency which has fallen 13% since June… as in four months ago…

“#2: ‘There are only about $550 billion of Treasuries outstanding with a remaining maturity of greater than 10 years.’ [...] the US has entered a debt spiral: a time in which fewer and fewer investors are willing to lend to us for any long period of time… at the exact same time that we must roll over trillions in old debt and issue an additional $100-150 billion in NEW debt per month in order to finance our massive deficit… So we’re talking about TRILLIONS of old debt coming due in the next decade…

“#3: The US will Default on its Debt… either that or experience hyperinflation. There is simply no other option. We can NEVER pay off our debts. To do so would require every US family to pay $31,000 a year for 75 years… Obviously that ain’t going to happen…”

The last point should be no surprise to any regular…Read more…

Related Article:

10/08/10 The Mogambo Golden-Real Estate Project
Posted by Brian Schuettler at 5:10 pm  

An Economic Horror Story Obama Won’t Tell

 A Moral Question - Not A Political One, A Shareholder-Not Just a "Stakeholder", AIG and all that....., Car Dealers and Car Buyers, Collateral Damage, Coming Social Unrest, It starts with a foundation, The Disappearing Car Makers, The Importance of Strategic Planning, The Intrusion of UNLAWFUL Authority, The Obama OMG magic factory, The Sorry State Of American Manufacturing, Want To Buy A Car?  No Responses »
Sep 262010
 

Let’s Party Like It’s 1929!
By Rich Galen
As if the “Recovery Summer” charade weren’t embarrassment enough for the Obama administration, there came the announcement on Wednesday that the recession had actually ended in June 2009. Still more excellent economic news from the Obama White House: Larry Summers will be leaving his post as director of the National Economic Council. And speaking of people we hope never to see again, Jimmy Carter was featured on CBS’ 60 Minutes last Sunday and renewed the nation’s negative opinion of him.

The Delphi Disaster: An Economic Horror Story Obama Won’t Tell
By Michelle Malkin
As Washington rushed to nationalize the U.S. auto industry with $80 billion in taxpayer “rescue” funds, the White House schemed with Big Labor bosses to preserve UAW members’ costly pension funds by shafting their nonunion counterparts. Nonunion pensioners who devoted decades of their lives as secretaries, technicians, engineers and sales employees at Delphi/GM lost all of their health and life insurance benefits. The Delphi workers sued and will have their day in court on Sept. 24. They are not asking for a bailout. They are simply asking for fair treatment under the rule of law.

Posted by Brian Schuettler at 3:35 pm  

War leads to prosperity!…Think again.

 Analysis & Commentary, Back to the basics, Deficit Death Spiral, Deflation-Inflation-Stagflation, Deleveraging, Dismal Science-Ignorant Scientists?, Economic Analysis Isn't Science, Insolvency, Integrity and Responsibility, Is The Market Rally Real?, It Is Nice To Be Part of the Elite!, It Is Supposed to be a Republic!, It starts with a foundation, Let's Call What It Is - DEPRESSION, Moral Hazard, Negative Cash Flow, Obama Bingo, Obama's Hypocrisy, Our phony middle class, Patience is a virtue...Delusion is a vice, Political Chaos, Small Business-Bedrock of America, Smaller Can Be Better, Socialism, TARP fruit loops, Taxes, Taxes and Taxes, The American Financial Oligarchy, The Arrogance of Power, The Consequences of Greed, The Democrats Blew It Again, The End of American Capitalism As We Know It? - Discuss, The excellent adventures of Ben Bernanke, The Importance of Strategic Planning, The Inherent Disorder of Empires, The Intrusion of UNLAWFUL Authority, The New American Socialism, The Obama OMG magic factory, The Sorry State Of American Manufacturing, The Suffering Poor, Unemployment Catastrophe, Unindicted Co-Conspiritors, Unintended Consequences, US Trade Imbalance, USA Is the New Japan, Wage Deflation, Watch The China Market, We Are All Cooked, We Have Become Beggars To The World, Who Guarantees the Guarantor?-You Do!, Who owns Congress-Still!  No Responses »
Sep 122010
 

The Nobel Prize committee has never withdrawn a prize. It might want to consider it. In Tuesday’s New York Times, prizewinner in economics, Paul Krugman reveals either that he knows nothing about economics…or that there is nothing worth knowing in it. We’re beginning to think it’s the latter.

“From an economic point of view,” he writes, “World War II was, above all, a burst of deficit-financed government spending, on a scale that would never have been approved otherwise. Deficit spending created an economic boom – and the boom laid the foundation for long-run prosperity….”

In the 1938 US elections, voters showed what they thought of the New Deal; Democrats lost 70 seats in the House. Then as now, the public had lost faith in public spending, says Krugman. Nearly two out of three of those polled said they were opposed to stimulus efforts. Roosevelt buckled under the pressure; he drew back from further spending to fight the slump.

Thank God for WWII! No one opposes military spending in time of war. Krugman made his position clear in 2008 in his New York Times blog.

“The fact is that war is, in general, expansionary for the economy, at least in the short run. World War II, remember, ended the Great Depression.”

According to this line of thinking, the best form of stimulus spending is money spent on the military. It creates consumer demand without creating consumer supply. Consumer prices rise; people spend. The slump is soon over.

But if WWII helped the US economy, think what it must have done for Japan; proportionally, its stimulus efforts dwarfed those of the US…and began much earlier. Just this week, Ichiro Ozawa, running for prime minister of Japan, vowed to take “every measure” to lower the yen and promised a stimulus package more than twice as big as the current program. He was just following in the footsteps of Japan’s leaders from the ’30s. It was “economic security” they said they were after. And they thought they could get it by central planning and government spending. Military spending rose from 31% of the budget in the early ’30s to nearly 50% five years later. By the early ’40s it was around 70% and nearly 100% later on. Deficits and debt soared.

Did that create a boom? You bet it did. Japan was the first nation to get out of the global slump. It boomed…and boomed…and ka-boomed. When it came to warships, planes, and soldiers, Japan was soon among the richest nations in the world. Yes, Americans had more electric fans, automobiles, central heating, aspirin, ice cream, and the rest of the paraphernalia of civilized life at the time. In the mid-’30s, the US produced 40 times as many autos per person as did Japan. Even during the Great Depression, the US out-produced Japan by a factor of 7 and its workers earned 10-times as much money.

Economists can’t even measure real prosperity, let alone fiddle it. So they put on the GDP and employment numbers the way a bald man puts on a cheap wig. It makes him look ridiculous and fraudulent, but it’s the best he can do. Unemployment disappears in a war economy. Japan put a million men in uniform. Two million more were part-time reservists. Those who weren’t in the army were put to work building tanks and planes. By 1941, Japan could produce 10,000 planes a year. If you were a swallow you wouldn’t want to build your nest in Japan’s factory chimneys; they belched smoke night and day.

And talk about fiscal stimulus! Krugman would have loved it – stimulus unfettered by real money or even a casual regard for real prosperity. Takahashi Korekiyo was known as the “Japanese Keynes.” Gillian Tett notes in The Financial Times that he was assassinated in 1936 after he came to his senses and tried to bring state finances under control. He was done in by army officers who did not want the stimulus to stop. Not that we’re being judgmental about it. As far as we know, the quality of central banking could probably be improved by an occasional assassination.

Takahashi wasn’t the first. Before him Junnosuke Inoue had held out for the gold standard and balanced budgets. He was out of office by 1931 and out of luck in 1932, when he was murdered. The gold-backed yen was abolished the day he left office. Then, public spending, deficits, central planning, debt, and inflation ran wild. By 1939, the Japanese were spending $5 million a day on their war with China – a huge sum for the Japanese at the time.

Was the economy improved by all this spending? No, it was perverted…hammered into a grotesque imposter – a parody of a real economy. Most of the nation’s resources were put to work building things almost no one wanted. Then, after the attack on Pearl Harbor, the stimulus efforts were redoubled. Rations were reduced further. Working hours were extended. What few consumer items were available were three times as expensive at the end of the war as they had been when it began. Men were conscripted into factories and the army. Women were expected not only to make the tanks, but to join the home-guard and prepare themselves to repulse the American invaders with sharpened bamboo sticks. What a marvelous economy – operating at full capacity and full employment until General MacArthur finally put it out of its misery.

You say Obama; I say Ozawa! You say boom; I say ka-boom!

By Bill Bonner

Posted by Brian Schuettler at 9:15 am  

Great-est Depression???

 Back to the basics, Coup d'etat in America, Death of the Dollar, Let's Call What It Is - DEPRESSION, Our phony middle class, Patience is a virtue...Delusion is a vice, Small Business-Bedrock of America, TARP fruit loops, The American Financial Oligarchy, The End of American Capitalism As We Know It? - Discuss, The excellent adventures of Ben Bernanke, The Financial Elite, The Intrusion of UNLAWFUL Authority, The Obama OMG magic factory, The Sorry State Of American Manufacturing, The Suffering Poor, Unemployment Catastrophe, Unintended Consequences, US Trade Imbalance, USA Is the New Japan, We Have Become Beggars To The World  No Responses »
Aug 222010
 

This forecaster is saying something that I thought was just common sense and I mentioned a year ago or more. That is to say, without a vibrant middle class to effect the necessary 70 % consumption that represented the bulk of activity supporting the “old economy”, how is the revival supposed to occur? What we need is a very focused new industrial policy that puts the USA back in the saddle and in the front of the parade. Please forgive my mixed metaphors!

Brian J. Schuettler

Collapse of middle class means there’s no fuel for recovery, Gerald Celente argues

The US economic recovery in recent quarters is little more than a “cover-up” and the world is headed for a “Greatest Depression,” complete with social unrest and class warfare, says a renowned economic forecaster.

Gerald Celente, head of the Trends Research Institute, told Yahoo!News’ Tech Ticker that there’s no risk of a “double-dip recession” because the first “dip” never ended.

“We’re saying there’s no double dip, it never ended,” Celente said. “We’re looking at the Greatest Depression. There’s no way out of this without [rebuilding] productive capacity. You can’t print [money to get] out of it.”

Celente, who has been credited with predicting the 1987 stock market crash, the collapse of the Soviet Union and the subprime mortgage crisis of recent years, said the US and other developed countries can expect to see the sort of social unrest the world witnessed in Greece this year once government attempts to shore up the economy fail and lawmakers turn to “austerity measures” to plug gaping budget holes.

Posted by Brian Schuettler at 5:14 pm  

Collapse?

 A Shareholder-Not Just a "Stakeholder", A State of Distress, Bond Market, Coup d'etat in America, Creditors Caveat, Deflation-Inflation-Stagflation, The American Financial Oligarchy, The Bear Facts, The Democrats Blew It Again, The Intrusion of UNLAWFUL Authority, The Obama OMG magic factory, The Suffering Poor  No Responses »
Aug 152010
 

Taleb Says Government Bonds to Collapse, Avoid Stocks – Bloomberg

Nassim Nicholas Taleb, who warned that unforeseen events can roil markets in “The Black Swan,” said he is “betting on the collapse of government bonds” and that investors should avoid stocks.

“I’m very pessimistic,” he said at the Discovery Invest Leadership Summit in Johannesburg today. “By staying in cash or hedging against inflation, you won’t regret it in two years.”

Treasuries have rallied amid speculation the global economic recovery is faltering, driving yields on two-year notes to a record low of 0.4892 percent today. The Federal Reserve yesterday reversed plans to exit from monetary stimulus and decided to keep its bond holdings level to support an economic recovery it described as weaker than anticipated. The Standard & Poor’s 500 Index retreated 16 percent between April 23 and July 2, the biggest slump during the bull market.

The financial system is riskier than it was before the 2008 crisis that led the U.S. economy to the worst contraction since the Great Depression, Taleb said.

Posted by Brian Schuettler at 4:35 pm  

Inexcusable Delay-Another reason for a change in Washington

 A Shareholder-Not Just a "Stakeholder", A State of Distress, Small Business-Bedrock of America, The American Financial Oligarchy, The Arrogance of Power, The Democrats Blew It Again, The End of American Capitalism As We Know It? - Discuss, The excellent adventures of Ben Bernanke, The Financial Elite, The Importance of Strategic Planning, The Intrusion of UNLAWFUL Authority, The Judeo-Christian Political Coalition, The New American Socialism, The Obama OMG magic factory, The Sorry State Of American Manufacturing, The Suffering Poor, Time For A New Third Party, Unemployment Catastrophe, US Trade Imbalance, We Have Become Beggars To The World, Who Guarantees the Guarantor?-You Do!, Who owns Congress-Still!  No Responses »
Aug 082010
 

Senate Leaves Credit-Starved Small Biz Hanging – Los Angeles Times

Small businesses desperate for government help getting loans will have to wait at least until September before Congress moves on long-awaited legislation to pay for higher loan guarantees, lower fees and other breaks.

As the Senate adjourned for its summer recess this week, a key bill to spur lending to small businesses remained stuck in a partisan stalemate.

As a result, the next month or more may be angst-ridden for many business owners. Nationwide, 995 government-backed small business loans that have been given initial approval since last spring are now stuck in limbo until Congress acts.

Posted by Brian Schuettler at 10:02 am  

The Committee to Defraud the World

 A Moral Question - Not A Political One, A Shareholder-Not Just a "Stakeholder", A Time To Repent, AIG and all that....., Analysis & Commentary, Bilderbergers 1 USA 0, Collateral Damage, Coming Social Unrest, Consumption Ran the Old Economy, Coup d'etat in America, Death of the Dollar, Deflation-Inflation-Stagflation, Devaluation, Did they ever hear of GAAP?, Dismal Science-Ignorant Scientists?, Economic Analysis Isn't Science, Even the Terminator Can't Help California, Goldman: Underwriter or Undertaker?, Greenspan is kind of stupid, Insolvency, It Is Supposed to be a Republic!, Jacksonian Democracy, Let's Call What It Is - DEPRESSION, Moral Hazard, No Bank Is Indispensable, Obama's Hypocrisy, Our phony middle class, Patience is a virtue...Delusion is a vice, Small Business-Bedrock of America, Smaller Can Be Better, Social Security Time bomb, Socialism, TARP fruit loops, The American Financial Oligarchy, The Arrogance of Power, The Consequences of Greed, The End of American Capitalism As We Know It? - Discuss, The excellent adventures of Ben Bernanke, The Financial Elite, The Importance of Strategic Planning, The Inherent Disorder of Empires, The Intrusion of UNLAWFUL Authority, The Judeo-Christian Political Coalition, The New American Socialism, The Obama OMG magic factory, The Sorry State Of American Manufacturing, The Suffering Poor, Those Quarky Accounting Rules, Time For A New Third Party, Truth In Charity, Unemployment Catastrophe, Unindicted Co-Conspiritors, Unintended Consequences, USA Is the New Japan, Wage Deflation, We Have Become Beggars To The World, Who Guarantees the Guarantor?-You Do!, Who owns Congress-Still!  No Responses »
Aug 012010
 

To say now that ‘No one knew’ or ‘I was mistaken’ or ‘I was just doing as I was told’ is another in a series of lies and deceptions that have supported one of the greatest frauds in the history of the world.

But this is not history. This episode of fraud is still playing itself out now. And to fail to understand the depth and breadth of this madness is to place oneself in peril, and in the power of those who are twisting the Western economic and political system even now to satisfy their lust for wealth and power. You are only successful if you can keep what you kill.

Glass-Steagall fell after a decade long campaign involving hundreds of millions in lobbyist money spread lavishly around the Congress, led by Sanford Weil of Citibank, supported by key banking and political figures in the Congress and at the Fed. It involved Senator Phil Gramm, who helped to put a stake in the heart of the financial regulatory process under the Reagan free markets banner, and who recently said the problem is that the middle class were a bunch of whiners. As did his wife Wendy, who as the chairperson of the CFTC had exempted Enron from regulatory oversight, and then left to take a position there on its board of directors.

Like the Mortgage Backed Securities scandal it involved surprisingly few principal players, like Alan Greenspan and Robert Rubin, who used their power and influence to silence and ostracize critics, and promote a climate of reckless disregard for the public trust under the meme of ‘efficient markets’ and deregulation. This might have been an innocent policy error if it did not involve premeditated theft on a massive scale, followed by cover ups, denials, and a control fraud that exists even today.

But it also involved literally thousands of collaborators and enablers, from mainstream media people, economists, analysts, and other thought leaders to politicians and regulators who saw that it was to their advantage to at least passively support this scheme which they knew very well was a fairy tale, a fraud, class warfare by a new name, but were able to hide their own guilty consciences behind self-serving rationalization and the shield of plausible deniability.

History, and hopefully the justice system, will sort this all out. It is difficult, even now, to get one’s mind around the enormity of it. This is its most powerful weapon. Who could be such monsters, so amoral, so destructively sociopathic? Future generations will regard it as an episode of madness, driven by a few people in a tight circle of self-reinforcing thought, people with remarkably similar cultural and educational backgrounds, driven by a consuming lust for power, that were able to dupe and delude an entire nation made vulnerable by propaganda, a co-opted press, and apathy.

In the meanwhile all the great mass of people can do is to watch, and wait, and seek to protect themselves from these ravening wolves grown increasingly desperate, as their arrogance comes to a tragic fall. They can vote out incumbents, but the parties choose the candidates, and too often they resemble competing crime families of special interests more than pillars of a representative government, saying one thing to get elected and doing another thing once in office.

This is the approach of trouble when hubris is at its height, and the few feel they have everything to gain and nothing to lose, if only they can gain more power, and necessarily become more ruthless. They are trapped in a cycle of fear and greed. The fear provokes the lies and the cover ups, but the greed promotes the extension of the fraud and the theft, requiring even more lies and cover ups. The operative word is ‘over reach,’ in a classic late stage Ponzi scheme. This will undoubtedly add to the confusion as the truth is assaulted by the big lie.

The last vestiges of polite society are often shed as the downfall reaches it final conclusion, at the end, when all is revealed, at last. And so there will be great danger.

Jesse’ s Cafe http://jessescrossroadscafe.blogspot.com/2010/07/committee-to-defraud-world.html

Posted by Brian Schuettler at 4:25 pm  

Bad Meat

 Secularized Lending, The End of American Capitalism As We Know It? - Discuss, The excellent adventures of Ben Bernanke, The Financial Elite, The Geithner Resignation Watch, The Global Economy, The Habits of Hedge Funds, The Importance of Strategic Planning, The Inherent Disorder of Empires, The Intrusion of UNLAWFUL Authority, The Joy of Being A Bank, The Judeo-Christian Political Coalition, The New American Socialism, The Sorry State Of American Manufacturing, The Suffering Poor, The Summers Exit Watch, Time For A New Third Party  No Responses »
Jun 192010
 

MAD MEAT! How Securitized Lending Collapsed the Financial System, Eric Von Berg (a commercial property mortgage banker and was the President of the California Mortgage Bankers Association during the heat of the market who has been watching “Regulatory Reform” as a member of the Commercial Board of Governors of the Mortgage Bankers Association of America). This is an absolutely must read! It has a few pages of set up to a fable of sorts, but when you get to page 6 of the slide presentation, it becomes laser sharp and funny. To wit:

The disclosures were typically so numerous and far fetched that the real risks were overlooked…

Sponsor Disclosure. Sponsor has various conflicts of interest. Not printed: We set up a book making operation taking bets on whether you will get sick and die from this product. Are we also making bets? “You betcha!” Which side are we betting on? According to the SEC, we are allowed to tell you, “None of your business!”

Hat Tip to Naked Capitalism

Posted by Brian Schuettler at 9:46 am  

CBO Propaganda

 The American Financial Oligarchy, The Arrogance of Power, The End of American Capitalism As We Know It? - Discuss, The excellent adventures of Ben Bernanke, The Financial Elite, The Importance of Strategic Planning, The Inherent Disorder of Empires, The Intrusion of UNLAWFUL Authority, The New American Socialism, The Sorry State Of American Manufacturing, The Suffering Poor, The Summers Exit Watch, THEY ARE ALL THE SAME, Time For A New Third Party, Truth In Charity, Unemployment Catastrophe, Unindicted Co-Conspiritors, Unintended Consequences, US Trade Imbalance, USA Is the New Japan, Wage Deflation, Want To Buy A Car?, We Are All Cooked, We Have Become Beggars To The World, We Need Open Derivative Models, Who Guarantees the Guarantor?-You Do!, Who owns Congress-Still!  No Responses »
Jun 052010
 

I’ve seen some eye-poppin’, credulity-stretchin’ accounts in my time. The report “The Budgetary Impact and Subsidy Costs of the Federal Reserve’s Actions During the Financial Crisis,” just released by the Congressional Budget Office, ranks with the most extreme. It claims that the budgetary cost (which corresponds roughly to expected losses) of the Fed rescue facilities launched during the financial crisis is approximately $21 billion. Moreover, its peculiar formulation (”fair value subsidies”) conveys the misleading impression that this was the extent of the central bank’s support to the financial services industry.

In a (weak) defense to the CBO, my understanding (and readers are welcome to correct me) is that the office is tasked to execute analyses as they are framed. In other words, if the CBO is asked to opine on a particular matter, it has to deal with only the questions posed to it. It is not permitted to tweak the inquiry or broaden the focus to provide more insight.

The closest thing to a statement of scope and objectives comes in the Preface and it is remarkably thin. The most important remark:

The report also presents estimates of the risk-adjusted (or fair-value) subsidies that the Federal Reserve provided to financial institutions through its emergency programs.

CBO Issues Fed-Flattering Propaganda

Posted by Brian Schuettler at 8:30 am  
 Older Entries  Newer Entries
© 2012 New Jersey CFO Suffusion theme by Sayontan Sinha