Friday, November 28, 2008

More numbers to think about

For the first time in history, the total indebtedness of the U.S., including unfunded liabilities, exceeds the total net worth of all U.S. households. --former Comptroller of the Currency, David Walker, SQUAWK BOX, CNBC, November 7, 2008, 07:23:05

Tuesday, November 25, 2008

Genius on The Matrix

Sunday, November 23, 2008

A fine, new twist

Thursday, November 20, 2008

“The ships keep coming, but there’s nowhere for the cars to go,” ...

“Not far away, metal, cardboard, paper and plastic are piling up in the lot of Corridor Recycling. The company takes in refuse from around the country, then bales it for shipment to China. The cardboard is used to make new boxes while used shrink wrap is turned into shoe soles and insulation for sleeping bags and coats.

For much of this year, the company shipped about 25 containers a day, each filled with 23 tons of refuse to be recycled. But after the Olympics, demand slowed for recycled metal. In October, demand for everything else took a sharp downturn, and for the last two weeks the company has not shipped a single container.

“It just came to a complete stop. Absolutely a stop,” said Gilbert Dodson, the recycling company’s co-owner. “I’ve seen it slow over the last 25 years, but this is the worst,” he said of the current downturn...”

There are stories about ships all over the world stacking up in exporting countries, anchored, and not able to sail because they cannot get letters of credit for the shipments. Hong Kong was mentioned as having rows and rows of loaded but idled ships stuck there.

The same goes for oil tankers, lines of them anchored even though they are full, with no buyers. There has been a screeching halt of shipping worldwide. Products are backing up in Asia.

Many of you have heard about the collapse of the Baltic Dry index, a shipping index for containers. It has fallen from over 11,000 in July to around 800, in only a couple of months!
Ladies, few have a clue how bad this will get...everywhere.

Highly recommended.

Wednesday, November 19, 2008

Government accountability

"We were all reassured that there was going to be transparency, accountability, legality," Klein stated. "But now we’re finding out that, in fact, Henry Paulson has achieved his original goal by stealth, because there is no accountability, and lawmakers are very hesitant to challenge this. ... Essentially, what the Bush administration has done is said, 'We dare you to challenge us and be responsible for the Great Depression.'"
When the fuck are people who should know better going to get it?

Bummint's first name is unaccountabilty.

Full article.

Tuesday, November 18, 2008


"There are cycles in human nature and it is up to regulators to moderate these excesses...." --Paul Volcker
The current TWIT (Thing not Worthy of Intense Trepidation)
who thinks he's in charge will be the least of your worries
in the coming months.™

The pratfalls of those clowns will be epic.

Full article.

Monday, November 17, 2008


"I ran across Dmitry Orlov's book, Reinventing Collapse, in which he compares present day America to Soviet Russia prior to its…collapse.

"Orlov outlines five stages of collapse, and where the U.S. along the way:

"Financial Collapse. Already in motion.

"Commercial Collapse. Just started.

"Political Collapse (a loss of faith in ideology). First part is over (the recent election in the US). Second part is going to be nasty.

"Social Collapse. Potentially the end state or stable equilibrium point for most of the world. Everyone against everyone with points awarded by the global marketplace.

"Cultural Collapse. Full meltdown. Global market breaks."

I expect to be goin' fishin' soon...permanently.


Thursday, November 13, 2008

And now deflation

The price of white truffles has fallen 84pc. Fines wines have dropped 65pc. Lobsters are off 52pc. Deflation has reached the City. It has engulfed housing and now threatens to spread through the broader economy, lodging like a virus in the British and global monetary systems.

Wednesday, November 12, 2008

Surviving a coming USD Collapse

I don’t think we will have to wait for 30 years to see Social Security and Medicare to bankrupt the US. What will happen sooner is that, as the US enters economic depression this time, the return on investment for our trade partners will disappear. The US won’t keep our trade parnters’ hundreds of millions employed, and they will then stop buying US Treasury bonds. And then the USD devalues 70% in a year. Maybe going to zero soon after that. The US is then bankrupted.

When can this happen? Possibly mid way into the next US economic depression (not recession). And, since I think we are now entering the beginning of a US depression, then if it lasts ten years, that means we have about 4 years to go for the USD to finally give up the ghost.

Yes, I mean that. We have maybe 4 years left, maybe even only 2 years for the USD to remain anything at all.

What can you do about all this?...
Highly recommended.

Monday, November 10, 2008

Shipping crash

One of many crashes.

All this is going to happen so fast and will go so broad,
it will even surprise the hell out of me.
Capesizes that were attracting rates of $233,988 a day as recently as June are now available for $4,793, according to the Baltic Exchange in London. That's below the cost of paying for crew, insurance, maintenance and lubricants.

Capesizes are the second-largest commodity transporters, after very large ore carriers. The Baltic Dry Index, a measure of shipping costs across different ship sizes, has slumped 93 percent from a record in May.

Friday, November 07, 2008

The Victims of a Metaphor

Sadly, we're getting a whole lot of precisely the wrong kind of thinking in response to this crisis. Indeed, most of the bad thinking arises from viewing the economy through the lens of false metaphor -- economy as machine. We've heard pundits accuse the government or banks of being "asleep at the switch." But in a complex system there is no switch. We've heard people ask how to "fix it," "run it," or "regulate it," suggesting if just the right sort of genius controlled the rheostats, we'd get just the right sort of economy.
But the economy is not like a machine at all. It is rather more like an ecosystem that no one can run, fix, or regulate. The hubristic sort of person who thinks he or anyone can run an economy is the victim of what Hayek called the "fatal conceit." And if given power, he will end up making the rest of us the victims of his false metaphor.
...the essence of The Matrix.
People want government, like God, to come down and fix the unfixable, or explain the inexplicable. That's why they're finding it easier to blame greed for our current financial crises. But greed is rather more like gravity. When you fall, you can either blame Newton or the banana peel on the ground.
Full essay.

Thursday, November 06, 2008

Denationalization of Money, The Real Deal

The story is riveting in its own right, not only as monetary history but as business history. He has highlighted a fantastic industry that has long gone unnoticed. But beyond that, there is a massively important economic point. What Selgin has done here is help us to understand something critically important: were it not for the state, a wholly private money system would emerge from market exchange. That means private coinage, private weights and measures, market-driven exchange rates between different kinds of monies, and a fully private banking system to go along it with it.

In fact, this is precisely how money originates: from the within the market. Why does the state intervene? The British case is typical. The state wants to control the economy, tax the economy, and control the people. If a fully private system comes about, the state finds its job all-but impossible.[My emphasis] That is why the state takes over at the expense of private enterprise.
The state will have to become toothless for it to loose its monopoly in currency issue.

Are you ready?
In other words, the state is not responding here to a market failure but a market success. It is not a "public goods" rationale that leads to state intervention but old-fashioned jealousy over power and wealth. Selgin's book shows this not through polemics but through a completely new telling of real-life events about which we've previously known next to nothing.
Full review. (MP3 interview with Selgin on site.)

Tuesday, November 04, 2008

In the interest of clarity...

But this theory of our government is wholly different from the practical fact. The fact is that the government, like a highwayman, says to a man: Your money, or your life." And many, if not most, taxes are paid under the compulsion of that threat.

The government does not, indeed, waylay a man in a lonely place, spring upon him from the roadside, and, holding a pistol [*13] to his head, proceed to rifle his pockets. But the robbery is none the less a robbery on that account; and it is far more dastardly and shameful.

The highwayman takes solely upon himself the responsibility, danger, and crime of his own act. He does not pretend that he has any rightful claim to your money, or that he intends to use it for your own benefit. He does not pretend to be anything but a robber. He has not acquired impudence enough to profess to be merely a "protector," and that he takes men's money against their will, merely to enable him to "protect" those infatuated travellers, who feel perfectly able to protect themselves, or do not appreciate his peculiar system of protection. He is too sensible a man to make such professions as these. Furthermore, having taken your money, he leaves you, as you wish him to do. He does not persist in following you on the road, against your will; assuming to be your rightful "sovereign," on account of the "protection" he affords you. He does not keep "protecting" you, by commanding you to bow down and serve him; by requiring you to do this, and forbidding you to do that; by robbing you of more money as often as he finds it for his interest or pleasure to do so; and by branding you as a rebel, a traitor, and an enemy to your country, and shooting you down without mercy, if you dispute his authority, or resist his demands. He is too much of a gentleman to be guilty of such impostures, and insults, and villanies as these. In short, he does not, in addition to robbing you, attempt to make you either his dupe or his slave.

The proceedings of those robbers and murderers, who call themselves "the government," are directly the opposite of these of the single highwayman. --Lysander Spooner,1808-1887.

Monday, November 03, 2008

The Revolution Will Not Be Organized

The revolution will not be organized,
the revolution will not be,
the revolution will not be Yahoo Grouped, Meetuped,
downloaded, uploaded, QWERTY'd, or blogged.

The revolution will not be handled by webmasters,
think-tankers, authors of policy position papers,
authors of anti-policy position papers,
secretaries, executives, executive assistants,
insiders, whistle-blowers, informants, counter-informants,
committees or sub-committees.

Your neighbor with excellent leadership qualities
will not lead you into, through, or out of the revolution.
The revolution will not be inspired, instigated, managed
or controlled by him, her, or them.
The revolution will not be organized.

No matter if you eat at McDonald's and can barely walk,
no matter if you drive an S.U.V. and rarely walk,
no matter if you were public school indoctrinated,
vaccinated, humiliated, ostracized, terrorized, minimized,
no matter if you live in a house owned by BofA,
no matter if you eat cat food, dog food,
Puppy Chow for your inner child,
no matter if you shop at Salvation Army, Saks, TJ Maxx,
when the Cold Hand of Power touches you,
it touches revolution.

They will come to chip you, rape you,
tell you you are theirs, imprison you in FEMA camps
because you spoke out,
because you doubted the official story,
because you looked with your own eyes,
spoke from your own heart.
They will come for you in black uniforms, black helmets,
swinging black batons, symbols of the New Authority,
and you will say,
"No, my children and I will not come with you."

You will say no -- not because Charlie Sheen
inspired you one night on FOX News
to look more closely at falling towers.
You will say no -- not because Alex Jones
led you through the darkness with a bullhorn.
You will say no -- not because Howard Zinn
handed you the Book of Truth on a silver platter.
You will say no because you are your own
star of truth shining the way.

At your unique hour, in the dark,
beneath a burning paper currency moon,
the Cold Hand of Power will touch you and revolt you.

At your unique hour,
when they come for you because you asked questions,
because you did not lower your eyes,
because you did not bow down,
at your unique hour,
in your unique circumstance,
you will find yourself in the grip of a courage
you have not known but which you are.
You will stand in front of black helmets with invisible faces,
and you will say,
"No, my children and I will not come with you."

Daughters and sons of revolutionaries,
blood burning for freedom,
eyes set toward tomorrow,
each of you alone in the darkness,
beneath tender constellations burning gold and silver,
each of you will remember the path to take
when the Cold Hand of Power comes for you,
each of you will make your way without direction or encouragement,
as those before you made their way without direction or encouragement,
forging history, embracing destiny.

You will not march in file.
You will not march.
The revolution will not be organized.

In your darkest hour,
beneath the burning moon,
you will pledge allegiance to the truth,
as those before you pledged allegiance to the truth.

The truth cannot be organized.

"The Revolution Will Not Be Organized"
written by Jock Doubleday
September 24, 2008

Sunday, November 02, 2008

The Greatest Circle Jerk of All Times

Money being supplied to the banks is not being lent through. Banks are parking the money in short dated government securities in anticipation of their own funding requirements. Around $3-4 trillion of assets are returning to bank balance sheets from the "shadow" banking system - off-balance sheet structures - that can no longer finance themselves. In addition, banks have large amount of maturing debt (estimates suggest $1.5 trillion by the end of 2008) that they must fund. Fear of bank failure (especially after the bankruptcy of Lehman and restructuring of WaMu) and shortages of capital also limit ability of banks to on-lend
Full article.

Giant circle jerk closed now.

Banks getting money from the government through its sale of more T-bills.

Then the banks buy the only safe haven on the planet,(for now) T-bills.

Banks not loaning.

Lines of credit disappearing. Businesses go bankrupt en masse. (Many
live on short-term loans.)

Massive unemployment results.

Where are the taxes going to come from to pay off those T-Bills
when most are looking for work?

The Gun in the Room blows up in the operator's face, its own gun fragments fatal.

Government debt default.

Neo pushes the reset button.

New game. New players...