Tuesday, September 30, 2008

A probable scenario, a parable

As people throughout the world watched all this, the same changes began to occur in other countries as their elections took place. Almost no one voted. There were no new national leaders, and the national governments slowly dissolved.
Whole parable.

If it ain't one thing it's another

Most hedge funds open up a crack on Sept. 30, Dec. 31, March 31 and June 30 to give investors the chance to “redeem” their investments, meaning take their money out. These moments are called gates, like a series of gates in a prison. The gate is the limit, the fixed percentage of your money, that the fund will allow you to take out at one time. Even with these strict caps on withdrawals, some funds may end up nothing but shells.
Uh, oh.


Monday, September 29, 2008

Watching it all from the back of the auditorium

“Borrowings by primary dealers via the Primary Dealer Credit Facility, and through another facility created on Sunday for Goldman Sachs, Morgan Stanley, and Merrill Lynch, and their London-based subsidiaries, totaled $105.66 billion as of Wednesday, the Fed said.”
See what I mean; they’re all broke. The Fed’s rotating loans are just a way to perpetuate the myth that the banks aren’t flat-lining already. Bernanke has tied strings to the various body parts and jerks them every so often to make it look like they’re alive. But the Wall Street model is broken and the bailout is pointless.
Much more....

Sunday, September 28, 2008

The Empire Strikes Out, The End of the State

Saturday, September 27, 2008

Go for the gold

Nothing wrong with silver either.

Friday, September 26, 2008

It's just a simple as this...

Dear Friends:

The financial meltdown the economists of the Austrian School predicted has arrived.

We are in this crisis because of an excess of artificially created credit at the hands of the Federal Reserve System. The solution being proposed? More artificial credit by the Federal Reserve. No liquidation of bad debt and malinvestment is to be allowed. By doing more of the same, we will only continue and intensify the distortions in our economy - all the capital misallocation, all the malinvestment - and prevent the market’s attempt to re-establish rational pricing of houses and other assets.
...but the distractions will be legion.

Focus is everything, especially now.

Full letter.

Largest Failure in U.S. Banking History

In what is by far the largest bank failure in U.S. history, federal regulators seized Washington Mutual Inc. and struck a deal to sell the bulk of its operations to J.P. Morgan Chase & Co.

The collapse of the Seattle thrift, which was triggered by a wave of deposit withdrawals, marks a new low point in the country's financial crisis. But the deal, as constructed by the Federal Deposit Insurance Corp., could hold some glimmers of hope for the beleaguered banking system because it averts any hit to the bank-insurance fund.
Earthmonkey hopes a lot.

I wonder who will bail out J. P. Morgan.


Thursday, September 25, 2008

Bend over, taxpayer, and stay there

When you, Joe Citizen, spend frivolously and default on your loans, the bank takes your house. When the government spends your tax dollars frivolously, it simply cooks the books to cover its excesses. When the books are left in ashes, the government just takes more of your money, or it prints more money, leaving the money it hasn't already taken from you devalued. Over the last few weeks, we've learned that you now face the prospect of an additional indignity: When your neighbor's bank spends frivolously and defaults on its loans, the government's going to take your money then too, to keep the bank in business.

Many commenters have blamed all of this on capitalism. This isn't capitalism. It's a peculiar kind of corporatist socialism, where good risks and the resulting profits remain private, but bad risks and the resulting losses are passed on to taxpayers. There's nothing free-market about it.

Neither Barack Obama nor John McCain, nor either party's leadership in Congress, has proposed a reasonable plan to deal with the government's unfunded Social Security and Medicare liabilities. In fact, all have proposed expensive new government programs that can't possibly be funded over the long term. All seem both oblivious to the federal government's impending financial peril and intent on making it worse.[My emphasis]
The end of hubris: the belief that all that's needed is another
plan, irrespective of any limits there might be.

Economic illiterates.

They will be humbled in ways they can't imagine.

Unfortunately, the end result may be that our politicians make capitalism more accountable to them—the same people who have shown that when it comes to the government's finances, they're accountable to no one.
Highly recommended.

Wednesday, September 24, 2008

To the Trumans of the planet

Truman’s plight encapsulates those who have been victimized by the political indoctrination in government schools and government-approved schools. Like Truman, they live in a society that they’ve been taught to believe is a “free enterprise, capitalist” system. The notion that they might be living in a fake and false reality is incomprehensible to them. Since they have no doubts that America is “free enterprise,” when their system fails their solution is logical — to adopt socialist and interventionist measures to save “free enterprise.”

Yet, like Truman, they occasionally encounter things that pierce their false sense of reality. For example, they might read somewhere that such socialist countries as Cuba, Vietnam, and China have such government programs as Social Security, Medicare, Medicaid, public (i.e., government) schooling, welfare, economic regulations, income taxation, a central bank, paper money, trade restrictions, and immigration controls, which befuddles them. After all, since those are the core elements of American “free enterprise” system how could they possibly be the core elements of socialism as well? But like Truman, they simply put the matter out of their minds and go about their busy lives.
Full essay.

Tuesday, September 23, 2008

Student, car debt quietly added to bailout plan

In the dark of night over the weekend when most people were snoozing, the Treasury dramatically expanded its bailout plan to include buying student loans, car loans, credit card debt and any other "troubled" assets held by banks.
If you're on the other end of that equation, (as taxpayer) you're fucked.

But you already were before this additional amount.

You have three choices the way I see it:
  • Get your donkey and plot of land...or a fishing pole.
  • Leave.
  • Jump on the receiving end.

If you decide to pay, you'll be one of the few holding that bag.

The whole country will sooner or later look like one big tent city anyway.

Then historians will write about it all by quill and candlelight.


Monday, September 22, 2008

Another market at warp 8...stopped dead.

NYMEX halts crude trading because of the up velocity. -CNBC, September 22, 2008, 13:37:40

Pissing in the wind

When the Chairman of FED tells you over the phone it's literally a matter of days before we have total collapse if we don't do something, we're under the gun. -Sen. Evan Bayh, CNBC, September 22, 2008, 10:56:53

Sunday, September 21, 2008

Now, an honest Federal Reserve Chairman

...as if anyone but you can do anything about it.

What's changed?
WASHINGTON — It was a room full of people who rarely hold their tongues. But as the Fed chairman, Ben S. Bernanke, laid out the potentially devastating ramifications of the financial crisis before congressional leaders on Thursday night, there was a stunned silence at first.

Mr. Bernanke and Treasury Secretary Henry M. Paulson Jr. had made an urgent and unusual evening visit to Capitol Hill, and they were gathered around a conference table in the offices of House Speaker Nancy Pelosi.

“When you listened to him describe it you gulped," said Senator Charles E. Schumer, Democrat of New York.

As Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the Banking, Housing and Urban Affairs Committee, put it Friday morning on the ABC program “Good Morning America,” the congressional leaders were told “that we’re literally maybe days away from a complete meltdown of our financial system, with all the implications here at home and globally.”
See it all.

Saturday, September 20, 2008

Treasuries closer to junk: The Last Bubble™

Yesterday, it was with great disillusion yet satisfaction that my eyes and ears witnessed an interview by a Standard & Poor analyst. He said there was no imminent danger of a USTreasury debt security downgrade, but he did say that if pushed, the S&P would put them on NEGATIVE WATCH. Interpret that to mean the USTreasurys will soon be downgraded. Never is a denial of such importance made without coming to fact and fruition later. Why else is the topic even discussed?
Full essay.

Friday, September 19, 2008

Looking at the effects of The Fist and Gun

Using coercion to drive charity is like using kidnapping to create love.
Full essay.

Thursday, September 18, 2008

The Untied States now more socialist than China

For Whom the Bell Tolls

Note that the Credit Default Swap on the USTreasury Bond itself has moved up 3.5 basis points in the last week to a record 18 basis points. In April it was 6 bpts. This is record territory. German Bund CDSwap protection costs only 8 bpts. The USTBonds have suffered from greater risk after assuming the Fannie and Freddie risk. The risk of USTBond default is next. Watch the CDSwap continue to rise, as the rest of the bailout candidates knock at the door. The precedent has been set. The door is open. The die has been cast toward deep decay of socialism. Add to insolvency exported fraud and aggressive military behavior, and the prescription for foreign reaction is huge. It is coming!
In one year, look for most Wall Street firms to disappear. They have no business left, only managing liquidation, directing accounting fraud, and soliciting sucker bagholders to donate to their corrupt cause.

Wednesday, September 17, 2008

A small look at The Big Picture

As long as the economy still generates wealth, the government debt will be considered safe. Once the pool of wealth starts to shrink, foreign buyers of US government debt are likely to abandon the sinking ship, irrespective of government "rescue" plans. If the US pool of real savings is falling and the housing market remains depressed, then this will result in the US Treasury incurring large losses in order to maintain so-called credibility, i.e., by not allowing the FF[Fannie and Freddie] to go under. Needless to say, this is likely to further undermine the pool of real savings and the process of wealth formation. We suggest that a less wealthy US economy is going to hurt all other economies through the channel of international trade.
Highly recommended.

The current Big Picture...to be added to this.

Holy shit!

Does any Earthmonkey believe this can be paid off?


The world is talking about moving out of the dollar, and the $80 move in gold today is seen by some as a move back toward the gold standard. -Sue Herera, CNBC, September 17, 2008, 13:59:37
Git 'er done.

Tuesday, September 16, 2008

The race to US Treasuries, The Last Bubble

Sept. 16 (Bloomberg) -- The cost of borrowing in dollars overnight more than doubled to the highest since 2001 as the collapse of Lehman Brothers Holdings Inc. and credit downgrades of American International Group Inc. led banks to hoard cash.

The overnight dollar rate soared 3.33 percentage points to 6.44 percent today, its biggest jump in at least seven years, according to the British Bankers' Association. The rate was as low as 2.07 percent in June.

U.S. Treasuries soared, stocks dropped and the cost of default protection on Wall Street banks rose to a record as investors sought the safety of government assets. The yield on the 10-year note dropped to the lowest in five years and the Standard & Poor's 500 Index lost as much as 1.6 percent. Credit- default swaps on Morgan Stanley, Goldman Sachs Group Inc. and Citigroup Inc. all traded at record highs.

Monday, September 15, 2008

More butter with that toast?

Bond traders are saying AIG is toast. -Gasparino, CNBC, September 15, 2008, 13:24:40

Mostly hogs looking at a broken wristwatch

WASHINGTON (Reuters) - The Federal Reserve Bank of New York held an emergency meeting on Friday evening with top financial market representatives to discuss recent market developments, a Fed official said.

Followed by this today:
Lehman Bankrupcy: 613 Billion in Debts, mostly owed to banks from Tokyo, Hong Kong, New York, Singapore and Taipei.
Full article.



WaMu May Cost Taxpayers $24 Billion If Bailed Out, Bove Says

Financial havoc wallops US dollar and stocks

AIG Seeks $40 Billion Fed Bridge Loan, Times Says

Fed Widens Collateral for Loans to Investment Banks

Thursday, September 11, 2008

Funny...for now.

Live webcam feed from inside the LHC

If it's not funny, who would be left to care?

Earthmonkey on a very bad trip.

Monday, September 08, 2008

The Ultimate End of the Hive Mind: Going down together

But it's so cozy.

Socialism for the capitalists.

The revolution comes later, so unlike the others
it will be missed. (I can hope, can't I? But, hope
in one hand and shit in the other to see which one
fills up first.)

In any case, there will be no good to come of this...
America, you have allowed a greedy sticky stinking set of hairy paws inside your pockets and your wallets, and this time they’re there to stay. You’re being told that it’s all in your best interest, and you are the ones swallowing it. The biggest bail-out, by a mile and a half, in the history of the human race.

Saturday, September 06, 2008

The Last Bastion of Government

During the past two decades, foreigners have accumulated gigantic USTBond holdings. Now finally, too many foreign enemies hold huge amounts of USTBonds, a risk my work has mentioned steadily. The US no longer controls its destiny. The risk to sovereignty has built to a point of recognition as capital sale replenishment deals abound, a frequent occurrence for big banks. The US Dollar is rallying when its financial condition is imploding. The driving force for the deteriorating crippled US condition is the housing decline. Just today, more dreadful home foreclosure and delinquency data was released. The story of US relative strength is absurd on its face, and yet another important chapter in the US Economic Mythology treatise. Such a contradiction invites a reaction.

The sovereign risk to the United States is now overshadowed by a risk of pre-emptive financial attack from foreign locations.
...enter the Sovereign Wealth Fund.
The point here is that a mountain of new US Treasury supply is guaranteed to come soon. The new supply flies in the face of rising price. The timing for a bond attack is soon possibly perfect. For years, nobody has questioned the USTBond as the only viable parking lot for surplus capital, the largest and most liquid market in the world. Times will change. Third World bonds do not flourish!
What will happen when the last bastion of "secure"
paper/credit turns to crap?

Markets and fiat now moving at Warp 8. It will
be very difficult to keep up...for anyone.

Full essay.

Wednesday, September 03, 2008

Big Guns

When Walt Kelly’s "Pogo Possum" announced to his friends that "we have met the enemy and they is us," he was providing the essence of what we need to know about the nature of state power. His lesson has been echoed so many times in so many places throughout America as men and women have been clubbed, gassed, tear-gassed, caged, and even shot, for daring to openly dissent from the policies of the political establishment. Lest anyone fail to get the message that the well-being of the state depends upon the most arbitrary exercise of its violent capacities, the performance of its "national defense" agencies in foreign lands should awaken them. If the homes of Iraqis can be bombed and forcibly entered with blazing guns; if critics of such practices can be rounded up and shipped off to various foreign lands to be tortured and held without trial; if small children can be blown apart by soldiers employed by political leaders who like to pretend that they are "pro-life;" what message is left for those of us to consume in the safety of our living rooms?

When Randolph Bourne told us that "war is the health of the state," he was fully cognizant of the fact that the war mentality is essential to the creation and enforcement of the collective mindset upon which state power rests. It is what war does to the rest of us, not just to those upon whom the bombs fall, that gives the state its authority. This is why large nation-states (e.g., the United States, Great Britain, Soviet Union, Germany, etc.) require an ongoing war system, and why smaller nations (e.g., Switzerland, Liechtenstein, Iceland, Ireland, etc.) manage to get along quite profitably and peacefully without resorting to wars.
Full essay.

Tuesday, September 02, 2008

I declare

If you want in on the Discordian Society
then declare yourself what you wish
do what you like and tell us about it
if you prefer don't.

There are no rules anywhere.
The Goddess Prevails.
—Malaclypse the Younger, Principia Discordia, Page 00032

Monday, September 01, 2008

The Third Way: Apathy

From a man who's 'been there'...
"Although people often bemoan political apathy
as if it were a grave social ill, it seems to me
that this is just as it should be. Why should
essentially powerless people want to engage in a
humiliating farce designed to demonstrate the
legitimacy of those who wield the power? In
Soviet-era Russia, intelligent people did their
best to ignore the Communists: paying attention
to them, whether through criticism or praise,
would only serve to give them comfort and
encouragement, making them feel as if they
mattered. Why should Americans want to act any
differently with regard to the Republicans and
the Democrats? For love of donkeys and
elephants?" --Dimitry Orlov
Now see a short story on how it might be done.

Has there been an alien invasion?