Here It Comes

We have been writing for four years that rising nationalism is coming. And since this crisis started we have posted many rising tensions as they develop. Russia has already slapped enormous tariffs on many foreign goods and China isn't far behind. China already has one of the most closed anti-competitive markets in modern history in this racket elitists and ideologues call "free trade". The term Free Trade is a perfect example of Hitler's propaganda technique termed the Big Lie. (A tactic also used extensively in George Orwell's mind-controlled society, Oceania in his novel 1984.) In other words, if you repeat a completely preposterous lie enough, the general population will come to accept it as true. At least until they are jolted into reality. Any other Big Lies you can think of in today's Orwellian world? They are countless. Almost all are propagated by media, the financial engine, politicians and mass marketers.

Accommodative monetary policy and quantitative easing are nothing more than pretty words for nationalistic monetary policy - a race to the bottom of the barrel being undertaken in some form by every major economy on earth. Who will win that race to make its economy more competitive in this world of "free trade"? In neoliberal economics embraced across the world today, destroying one's currency is a primary requirement to attract unregulated global capital - a dynamic we have been critical of on here. Hence our many remarks about a race to the bottom of the barrel. Everyone is attempting to devalue their currency in a strategy embraced by the mentally-challenged economics community, financial mobsters, central bankers and political stooges benefiting from multi-national business "contributions". Contributions which specifically assist in setting policies friendly to "free trade".

China is in a substantially unique position in that it has benefited more than any country in modern history from an influx of foreign capital, foreign investment and foreign know-how. This is easily seen in the fact that somewhere north of 80-85% of exports out of China are from foreign multi-national firms, something we have highlighted often over the last four years.

Dominant technology and manufacturing firms from Japan, Taiwan, America, Europe and other countries have plowed substantial knowledge into China allowing for a metamorphosis of knowledge that would have taken fifty to one hundred years to develop itself. Instead this transfer of knowledge has taken place in a little more than a decade. National sovereignty, intellectual property rights and national wealth are irrelevant in this neoliberal economic charade. Instead the world has become a playground for banksters and multi-national firms using national wealth to speculate across the globe regardless of the consequences, benefits or costs.

China's policies are turning nationalistic just as we said they would. And they have far and away the most to lose by doing so. Foreign investment and technology transfer could suffer substantially leading to the depth and length of any substantial downturn. China must have continued access to foreign know-how or lose any momentum gained by heretofore foreign investment. China's comparatively stagnant domestic economy, weak research infrastructure and other substantial dynamics require continued outside investment for any level of sustainability. The U.S., as an example, still dominates global scientific research spending one out of every three dollars. Add in Europe and Japan and the remainder of scientific research around the world is a rounding error. In fact, much of China's research is actually intellectual property of foreign multi-national businesses with facilities in the country.

As China's economy collapses, a knee-jerk reaction from communist leaders would be to devalue their currency as is the policy accepted by the status quo of every economy on earth. But, now with fickle international investors having much to lose in China, such a move would have the effect of destroying returns on capital. A death knell for future investment. So, a much more palatable approach to is to accomplish the same objective without appearing to harm foreign investors. Foreign investors are substantially more important in today's economic landscape than national sovereignty, whether trade is free or fair or otherwise, etc. That "palatable" approach would obviously be to subsidize exports and increase regulation of imports in lieu of overtly devaluing the yuan. This is something we have obviously highlighted before but is very relevant to this post.

China has no alternative other than to do something to stem the collapse of its economy and corresponding massive loss of jobs while attempting to retain future foreign investment.

The actions of Chinese officials are becoming more overt. As an example, a recent trade filing showed that import tariffs were raised on nylon for no other reason than they are hurting domestic nylon suppliers. Much of China's economy has always been predicated on this type of protection but now the press is finally picking up on it. Future actions will almost assuredly be even more flagrant as it pertains to today's economic ideology.

This brings us back to a point we have made on here before. The yammering ideologues citing Smoot-Hawley tariffs as a cause of the Great Depression are completely ridiculous. Just as today, global trade collapsed at the start of the Great Depression. Tariffs were a response to the race to the bottom of the barrel we have highlighted above. A strategy employed by all nations at the start of the Great Depression. Just as today. And many countries were more vigilant than others in their race to the bottom of the barrel because they had accumulated such substantial debts from World War I. In order to repay these international debts, they had to do anything possible to keep their economies humming. Even if that meant selling goods below cost. Sound familiar? Smoot-Hawley as a cause of the Great Depression is one of the biggest Big Lies of our time. A Big Lie perpetuated by ideologues and special interests and mouthed by idiots doing their will. It is completely ridiculous. Global demand had already evaporated and there was massive excess supply just as today - a dynamic we have written of for four years. So, embracing the same neoliberal economics as we see today, will the outcome be different? Is the recession over? Or are we witnessing more Big Lies?

Not only is China going to experience a depression but I have complete confidence the communist government will make exactly the wrong trade and economic decisions which will lead to maximum economic pain. And most likely semi-permanent to permanent flight of foreign capital and investment.

You won't read any of this elsewhere. That's a good thing. Because the entire economics community, political leadership and Wall Street mobsters have succumbed to the Big Lie. A dynamic created by incredible hubris and ego. The truth is almost never is it seems.

This past week China takes another step in creating their own destiny by putting an even tighter yoke on an already very closed market.

Party hard! And buckle up.

Goldman Sachs' Letter To The Editor

More of God's work. Link here.

Toyota Bags Formula One

Formula One has the potential to implode over the coming year with only three major manufacturers still committed to the sport. Toyota, BMW and Honda are out. Ferrari is threatening to leave. Renault is going to decide its future by the end of the year. Formula One's program costs are absolutely outrageous. Some have put estimated costs of funding a two car team at upwards of $300-400 million a year. The corresponding quantifiable benefits are dubious.

Quite some time ago we remarked that leisure and entertainment businesses were likely to see a seminal shift in coming years. I have had this discussion with friends and they have generally looked at me in disbelief when I have remarked compensation numbers in the leisure and entertainment industries could drop by 90% in extreme cases - a point we have made on here before.

People are simply well too naive about reality. Hollywood entertainers, professional athletes and others involved in the leisure business making $15, 20, 30 or more million a year are living through their own bubble that is simply not sustainable. People have become so accustomed to this dynamic over the past few decades that they don't stop to think about the unsustainable economics. I would classify this in the same vein of the advertising bubble we have written extensively about. ie, People are simply well too naive as to sustainable economics.

Another example I am dubious about is the completion of Disney's newly announced plans for a new Shanghai theme park. Between future social volatility and China's coming economic strife, it's highly probable Disney will eventually cancel these plans. Since leaders at Disney are well unaware of these future dynamics, plans will continue until some marked event awakens them to reality. For a small stipend, I would gladly share a presentation of my work with Disney's board of directors. Actually, a nice barter would be unlimited lifetime access to the wonderful Disney properties. Obviously including airfare. Haha.

Many industries beyond Formula One are on the precipice as I write this. Another example includes the terrible financial shape of the NHL. Its financial problems are deep and systemic. And what is their answer? Taxpayer funding. Often threatening to leave cities without financial assistance. Ahem. Where might these firms relocate to with every major municipality in financial trouble?

Remember, were the Federal Reserve not backstopping the economy with trillions of dollars of taxpayer money, a phenomenon which cannot continue forever, entertainment firms and sports franchises would already be in bankruptcy reorganizing. First on the list of any reorganizations in the entertainment and leisure industry would be the adjustment of salaries and compensation commitments of people making bubble earnings.

The party is over. The unwinding begins. And that means some of the world's wealthiest people are likely to experience the same fate as many of the world's most underprivileged. That is, bankruptcy. A dynamic we have hammered on repeatedly. That is, many of the people who most benefited from current economic ideology would eventually succumb to it.

Senator Bernie Sanders Introduces Legislation To Break Up The Wall Street Mobster Monopoly

An unintended consequence of this legislation would be to break up of the Washington monopoly along with it. Let's explain this dynamic.

I have talked about this for nearly a year now but it remains unreported. Wall Street banks are likely not being broken up because they serve the state. They are a massive repository for new issuances of government debt. Wars, stimulus programs, funding massive foreign interventions and other policies which are related more to power and control need to be financed. With global trade collapsing and foreign entities unable to finance the U.S. deficit at its record levels, Washington needs to find domestic purchasers of its debt. The fact that Bernie mentions these mega banks are now substantially larger than before this crisis started creates an even larger repository for the Federal government to self-fund its own deficits without foreign purchasers. This is another dynamic also not clearly understood. The growing asset base of these banks also allows them to mint massive profits buy plowing enormous sums of money into a completely risk-free (conceptually) purchase of Treasuries. Get money at zero percent and invest it at 3.5% all day long. This dynamic allows these firms to continue to fund their Frankenstein financial market inventions as well.

Yet all of these dynamics and more are destroying the American economy. As we have said numerous times, it is Washington killing our economy. It is the President, the Congress, the Treasury, the Federal Reserve and anyone else who supports current policies. This surely is not malicious of intent, but is an unintended consequence of propping up these massive firms. In a world of finite capital, the U.S. government is crowding out the individual, the small business and even the large business for this country's resources. And because these firms are now effectively government-supported on every level, they too are crowding out capital which would otherwise support the operation of community banks and regional banks. What does that mean? We the People will continue to scavenge for capital and subsequently become poorer at the expense of the state. Bankruptcies will continue unabated. Unemployment will continue to rise. Small businesses will continue to fail. The economy will not recover.

Many people believe we are on the path of Japan and cite numerous meaningless comparatives including decades of low growth with low interest rates. That is absolutely incorrect. We are on the path to collapse without a change in economic policy. Japan's economy, unlike the U.S., was still a net producer of capital throughout their decades of comparable policies. And the global economy went without any substantial slowdown during their malaise thus providing a healthy outlet for their goods and services. So they could fund their government intervention. Today, comparatively, globalization is dead regardless of the rhetoric.

The U.S. has a reprieve of some length beyond what an initial crisis would have developed by allowing these mega banks to continue to grow in girth but a repeat of Japan is completely impossible in the U.S. without a massive economic transformation we have been stating for years must take place. It will take place whether elitists want it or not. It's only a matter of when and if it is adopted by necessity through collapse or through proactive policy. Only time will tell.

There are many solutions to our crisis . Solutions that mandate constructive government involvement. But current policy isn't one of them. Why would we expect it to be? As we have written Schumpeter told us ages ago that the only way to recover from economic crisis is to rid ourselves of the prior generation's foolish leadership and their faulty thinking which led to the collapse in the first place. And, indeed this collapse lies completely in the hands of elitists in government and business who have forsaken society's trust. They have forsaken We the People for morally bankrupt reasons. Were society enlightened to this fact, we would not consider any possible solutions involving a perpetuation of the status quo. But, in fact, all we are doing is perpetuating the status quo. Why? Because the status quo owns the microphone and the wealth taken from society in this great fraud. Wealth needed to control the microphone. Sound familiar?

A major change is headed Washington's way. What Schumpeter said is manifesting itself into today's political reality - Incumbents, regardless of party, are marked for removal as we saw in the elections last week. That's not a surprise on here. It is something we have been expecting for years as we have written of our self-correcting society. It's time for Washington to decide. Politicians are either part of the problem or part of the solution. It's time to stand to account and convince the voters of their merit as our public servants. Merit afforded by action. By true leadership. Not by rhetoric. Not as our overlords promising a new America while dictating the economically unpopular and morally bankrupt status quo. Or just as bad, accomplishing nothing.

Link here.

Goldman Sachs CEO - He is, he says, just a banker "doing God’s work" - Since When Is God's Work Tyranny And Tax?

We are truly living through Orwellian times. All remarks in this article made in support of Goldman Sachs are dubious at best and generally very, very, very misleading. Didn't make bad bets? Didn't need a bailout? Were hedged? You have got to be kidding me. This is ex post facto hubris and lies. An attempt to reframe public opinion based on propaganda and bulloney. To rationalize legalized theft.

And the remarks in the article by the NYT's journalist Andrew Sorkin are incredibly ignorant and representative of the systemic failures of American journalism. Sorkin remarks that people want to see the Wall Street banks fail again. Get real. People want a society with a rule of law. And that means people are held accountable for corruption, destruction of our economy and to receive compensation based on merit. That would be virtuous merit not mafioso merit. Especially when the taxpayers are backstopping Goldman Sachs and Wall Street to the tune of 12+ trillion dollars while American citizens' lives are literally collapsing. People want banks and financial institutions which serve society, not prey on society. Goldman Sachs would simply not exist today were it not for American taxpayers. And for this firm to be paying its employees record compensation when they are still being supported by trillions of dollars of our money is part of the most heinous crime ever perpetrated on the American people. Period.

I want to repeat something we have said countless times. A point that apparently is missed by a very large majority of the populous including Goldman's CEO. Goldman Sachs is a consumer of capital. It creates no capital for society or the economy. Its businesses - investment banking, mergers & acquisitions and trading & trading services to financial firms - create no new capital. This isn't an opinion. It is a fact that anyone who understands the concept of capital clearly comprehend. Frankly, I could write a financial text book on how all of the businesses Goldman participates in literally destroyed the American economy over the last few decades. Literally. To a depth that would astonish the vast majority of people including, apparently, the CEO of Goldman Sachs, who apparently supports a very destructive economic model for no other reason than it has served him well.

Goldman Sachs and Wall Street banks consume society's wealth. They are a tax. And while Wall Street serves what has become a marginal purpose of marrying investors with creators of capital while collecting a tax for doing so, as we have highlighted numerous times over the last few years, Wall Street as an institution is an extremely inefficient undemocratic dinosaur. One that employs methods of monopoly rather than the democratic marriage of investors and creators of capital. One that benefits the very few for no reason of merit but instead simply of monopoly. They are no different than the hoodlums who have gained control of the world's oil resources or cocaine resources and use power and corruption to control these resources. And, I am not exaggerating in that statement. As we have remarked before, a much more efficient model is a distributed capital market which more democratically allocates capital at the point of demand. And often without the intermediary taxes Wall Street levies upon society.

In other words, Goldman's CEO would likely be shining shoes as a career were his company not part of a monopolistic Wall Street gatekeeper created and endorsed by Washington politicians. The system has become systemically fraudulent and truly serves no meaningful purpose.

Wall Street's profit bubble is indicative of the extent of tyranny and tax it is imposing on society. Somehow I have a hard time marrying tyranny and tax with "doing God's work". More "free market" neoliberal bullshit. Maybe Goldman's CEO could enlighten us with his remarks in a forum where informed citizens are able to provide a counterweight to his bully pulpit statements of feigning reality.

Yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because the rulers of the exchange of mankind’s goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.

True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.

The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.

Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy and moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves and to our fellow men.

Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; without them it cannot live.

Restoration calls, however, not for changes in ethics alone. This Nation asks for action, and action now.

Wall Street's con game continues. Karma is a bitch.

Latent Volatility Continues To Build In The Euro Zone

We have been bearish on the Euro for a long time. Our bullishness on the dollar while the world was partying hard and the dollar was plowing lower was predicated on many coming dynamics. Most of which are clearly still not understood by the keepers of the status quo. ie, Global bureaucrats. That we have entered the eye of the storm and volatility has temporarily receded has not changed a single major theme we have talked about on here over the last four years. As I have written before, I believe coming crisis is headed for a Euro area near you.

That Trichet and other unelected Euro zone bureaucrats set economic and social policy for the sovereign people of Europe, is a great tyranny that has been thrust upon the people of Europe. A tyranny that the sovereign of Europe will only clearly understand as this crisis metastasizes. The seeds of volatility have not been vanquished. In fact, they are still germinating. A worst case scenario is that the Euro as a currency medium is completely repudiated. We shall see how far volatility takes this crisis but as I have said before, I would not at all be surprised for this dynamic to develop.

Health Care Reform Or Prison? What's The Diffference?

Few would like to see health care reform more than me. Is this reform?

Apparently anyone not participating in national health care will get their health care for free ......... in prison. It seems to fall deaf upon the idiots in Washington that the reason many Americans don't have health care is because they cannot afford it. Might we more accurately interpret this as sending people to prison for being poor?

But then how is this different than banksters ripping off poor taxpayers for hundreds of billions of dollars after tanking our economy? Aren't underprivileged people in this scenario already in prison?

Oh, I'm sorry. A Goldman Sachs executive enlightens us on this topic ......... “The injunction of Jesus to love others as ourselves is an endorsement of self-interest,” Goldman Sachs' Griffiths said Oct. 20, his voice echoing around the gold-mosaic walls of St. Paul’s Cathedral, whose 365-feet-high dome towers over the City, London’s financial district. “We have to tolerate the inequality as a way to achieving greater prosperity and opportunity for all.”

I guess that means poor bastards are poor for a reason. Because it's necessary for the greater good as defined in our Constitution. Thomas Jefferson and George Washington would be proud. I guess King George would be the most proud.

Hayek would be proud. The road to serfdom is well underway.

Don't Have Money To Pay Your Mortgage? No Problem. Fannie Mae Will Let You Lease Your Foreclosed House Back With The Money You Don't Have.

Another brilliant idea from the government. I have a better idea. They should have provided relief to homeowners from day one rather than bailing out the Wall Street banking mobsters who are stuffing their pockets with taxpayer bailouts while kicking homeowners to the curb.

At least Al Capone fed the poor.

Link here.

Goldman Sachs Has One Losing Trading Day In The Third Quarter - Markets Are Rigged Courtesy Of Washington Politicians

"Sometimes the law defends plunder and participates in it. Thus the beneficiaries are spared the shame and danger that their acts would otherwise involve. But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them and gives it to the other persons to whom it doesn't belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime." -- Frederic Bastiat


Now, I'm going to tell you right now, it doesn't get any better than this. 98.4% winning trades? Anyone that has built trading systems, traded professionally or understands probabilities will tell you this type of win-loss ratio is impossible unless the market is rigged. A good trading system will have 60-70% winning trades over the long term. No transparent, open market with millions of participants - all with equal access to information - can ever produce the kinds of returns Goldman is making.

This is clearly not sustainable. Either transparency and legitimate competition for capital will be restored, Goldman will trade the liquidity out of counterparty participants thus causing markets or returns or both to implode, markets will blow up, other market participants will adopt the same strategies or some unforeseen dynamic will develop. That means the perceived brilliance of Goldman Sachs will again come crashing down. Because it never was brilliant. It was the fact that they had asymmetric access to information.

We have talked about this before but I want to lay this out in street terms a lay person will understand because it is important average Americans get this scam.

Wall Street's brilliance in financial markets is all a feint. A deception. It's part of the con. This is no different that a street con artist setting up a victim for the take. These financial firms create an aura of brilliance by hiring mathematicians, physicists and hard-charging MBAs. So, the mystic builds that they are brilliant masters of finance and that science has now been harnessed to create a new industry. To create new profits. A Brave New World. The age of quantitative finance. Our society will now trade our way to prosperity. This is utter bullshit. We are in fact trading ourselves into collapse.

The really dirty secret is that none of the cited sources of brilliance are primary drivers of profit or success. They are thrown out to feign the public. To justify paying Wall Street executives hundreds of billions of dollars to steal from society. And the public knows no better because these firms use a lot of fancy jargon to describe what they do. Wall Street doesn't want anyone to know what they are doing and baffling people with bullshit is part of the art of the con. It's not science that drives profits. It's not hiring Harvard MBAs. It's not hiring physicists who can't spell economics, complex systems or risk management.

What drives profits is making sure you set the rules to the game. Rules you can manipulate. And that means Wall Street lobbyists bribing, albeit legally (loosely termed "legal" as Bastiat told us in the above quote), our politicians to set the rules are really the secret brilliance behind Frankenstein finance and Wall Street's unsustainable profits. If you had billions of dollars to throw at Washington, you too could be brilliant.

It is nothing more than corruption that drives Wall Street's profits.

The art of the con game.

JP Morgan Ends SEC Alabama Probe

A disturbing look at the fraud involved in the Jefferson County fiasco. Apparently there will be no substantial criminal probe. Banksters just say they are sorry and all is well.

Unemployment Much Worse Than The Carnival Barkers Expected

We blew through 10% unemployment with unemployment and underemployment now near 20%. What a surprise. These carnival barkers predicting net job creation this month are the same ones who told us we had entered Pax Globalia before the crash. This economic model is dead. Globalization is dead. Frankenstein finance is dead. It's time for transformative leadership. Leadership which embraces economic populism aka democratic economics, sustainability and national sovereignty.

Link here.

Christopher Dodd Tries To Save His Job With Bank Reform Proposal

I am very dubious as to the sincerity of Senator Dodd given his involvement in the collapse of our financial system. Dodd enjoyed the fruits of deregulation, a predatory banking system and is what I would term an institutionalized legislator. A "lifer". I'd like him and his Republican counterpart Richard Shelby to start collecting their retirement pay in 2010. I don't know if Shelby is up for re-election but Dodd is. And uber bear Peter Schiff is apparently going to run against him. Nothing would make me happier than to see Schiff win. Not because I endorse Schiff's views on economics, because I clearly don't. But because Schiff would be new blood in a stagnant and corrupt Congress.

Only a politician could dream up a new regulatory agency to do what the existing regulatory agencies did for nearly a century. That is, until Dodd, Shelby and others led the charge to destroy these regulations. I believe Dodd's bill has zero chance of passing the Congress and being signed into law. And I believe Dodd knows this. As a supporter of the Wall Street cabal, I view this effort as an attempt to save his political hide by appealing to the populist rage in America. In other words, I believe Dodd is prepping for his 2010 re-election campaign.

Senator Dodd, all you need to do is restore the financial regulations which led to the greatest prosperity in America's history. Financial regulations you helped to dismantle during your years of institutionalization. We don't need a new government bureaucracy. We need new legislators who will do the will of their bosses. That would be us.

Link here.

Jesus Decides Goldman Sachs Employees Should Receive H1N1 Flu Shots Before High Risk Pregnant Women, Children And Elderly

I couldn't resist. It's good to be the king.

Profit "Not Satanic" Barclays Says, After Goldman Invokes Jesus

“The injunction of Jesus to love others as ourselves is an endorsement of self-interest,” Goldman Sachs' Griffiths said Oct. 20, his voice echoing around the gold-mosaic walls of St. Paul’s Cathedral, whose 365-feet-high dome towers over the City, London’s financial district. “We have to tolerate the inequality as a way to achieving greater prosperity and opportunity for all.”



The Death of Usury or The Disgrace of Usurers from 1594 England

We won't be talking about religion on this blog but the insanity and rationalization of banksters knows no bounds. I don't know about you but I grew up in an environment that embraced spirituality as a virtue. Not that I have always upheld those ideals. But, then I believe most of us aspire to be better than we are. I never could imagine anyone in my family ever uttering the twisted words above. Ever. That's a pretty narcissistic and self-serving interpretation of Jesus Christ as a rationalization for morally bankrupt behavior. I thought Jesus Christ spoke of selflessness, compassion and kindness. Especially for those in society who were unable to defend themselves. Or those we disagreed with. Not condescending selflessness or kindness either. But as someone who was another equal. Democratic selflessness.

This Bloomberg story has to literally be one of the most bizarre I have ever read. Even more bizarre is that Wall Street mobsters are heading to churches to rationalize their behavior. Actually, if the men quoted in this article knew anything about many religions, they would realize that profits are not Satanic but usury is.

Do we need a refresher course in Canon Law? Usury was once punishable by ex-communication.

Ezekiel 18:13 He lends at usury and takes excessive interest. Will such a man live? He will not! Because he has done all these detestable things, he will surely be put to death and his blood will be on his own head.

Sharia (Muslim) Law forbids the acceptance of interest for lending.

The United States used to cap interest rates at 6% and anything beyond that was usury.

In early England the punishment for usury was forfeiture of property.

A public banking system would not be concerned with profits or screwing our fellow citizens out of their often meager earnings. But would be concerned with the democratic development of humanity, the creation of jobs and attempting to enable citizens with the opportunity for a life of self-determination. It would serve the common good and serve democracy. It would serve society democratically. It would not serve those who are most willing to exploit society without conscience. Or those who will do anything to rewrite our laws to steal our money.

Bank Of England ........ Doomed?

Gold bugs will look at this Bloomberg story as supporting evidence of why gold must go higher because it supports their confirmation bias. It's part of the mass hysteria in much of the financial community that central bankers are planning to hyper-inflate their way to prosperity.

The reality behind this story is substantially different. In other words, Bloomberg is often guilty of the mass hysteria or inaccurate reporting we see elsewhere. The actual rate of easing in the U.K. is slowing substantially. And the Bank of England appears to be winding down its attempts at printing money if you actually read their statements instead of media hype.

The U.K. economy has not responded well to central bank actions so far. Remember our post some weeks ago remarking the U.K. is in serious trouble and the potential for the pound to go kaput? Stick this in the back of your mind for a future post.

"The Handcuffs Are Off. The States Can Pursue Justice (Against The Banksters) Now."

I have made no secret on here regarding my position on State's Rights. I believe in Jeffersonian ideals and that State's Rights advocates clearly understood the potential for all of Washington to become a cabal. Yes State's Rights have been abused in the past by racists and politicians attempting to force their personal will on civil liberties but under these circumstances we have the check of the Federal government on the actions of state corruption. The system creates a cycle of virtuosity in my estimation. Is it perfect? Well, there is no such thing as perfect.

We see many ideologues attempting to marginalize any recent discussions of State's Rights as right wing extremists or racists or tea baggers or other equally ludicrous remarks. These are tactics timelessly used by power in an attempt to control dissent. No. State's Rights is a sign of resistance to Washington corruption and power grabs beyond their Constitutional authority.

How can we expect a Federal government that has created the rules allowing predatory banking to actually fix the problem? Politicians are drunk with power and billions of dollars of legal bribes from these institutions. It's the same reason we haven't seen a public commission to look into concerns of wrongdoing. The list of ills associated with this dynamic is endless.

Yet, here comes the states. State lawmakers and attorney generals aren't on the take to the tune of billions of dollars from the banksters. What incentive does a state lawmaker have to protect Washington corruption when it is destroying state economies? States have historically been the primary protectors of consumers anyway. It's a natural that we should have state's attorney generals pursuing legal action against the crooked banksters. And it's a constructive reminder of why we have State's Rights.

Goldman Sachs Takes On A New Role - Taking People's Homes

Link here.

"This (Goldman Sachs's Actions) Is Fraud And Should Be Prosecuted"

Link here.

Wall Street Bailouts Are Killing The Banking System And The Economy

Let's get something out of the way first since Wall Street supposedly earned substantial profits a few weeks ago.

Wall Street did not earn a single penny of profit. Nor have they paid back the American people. That is a lie. Let's look at the facts. The banks and the economy are being backstopped by over $12 trillion in government money. Frankly, it's really a lot more than that if you really factor in all of the government involvement. Additionally, Wall Street firms are still holding horrendous amounts of mispriced assets and are effectively insolvent.

Were the United States taxpayer to withdraw trillions of dollars of support for the economy and Wall Street, Wall Street would again collapse. It would collapse that very day. As long as trillions of dollars of American citizen's money are needed to backstop Wall Street, these pseudo-profits being used to pay massive bonuses remain nothing more than outright theft. Every single dollar in operating profit reported in this environment should be used to rebuild banks financial balance sheets and repair the damage these crooks have done to the American economy. Instead the government is allowing these firms to steal even more money from the citizens of this country. There are no financial profits. Only mobsters who screwed Americans on the way up and are now screwing them on the way down while millions of innocent Americans rot. Stopping the financial system from complete collapse is one thing but then letting the subsequent behavior to continue is corrupt. And these financial firms telling us they need to pay these mobster racketeering salaries to hire more people to continue to criminally gamble with our money is a perfect example of another use of Hitler's propaganda technique known as the Big Lie.

Our system of government and democracy must, as a baseline, first serve the common good. Or at least do no harm to the common good. Any policy that then serves this baseline can then be expanded to serve individualism and personal achievement. In other words, Wall Street must either do no harm or serve the common good first. The system today is misrepresented by thieves who ideologically cite greed as good without any limits placed on the morality of that statement or of government policy. Government policy on a wide swath of issues is harming economic opportunity and the common good. Policy supported by both parties. And banking is one such issue.

We have been remarking since this crisis started that the Federal government/Federal Reserve is killing the underlying economy and the banking system in their efforts to save these mega financial firms. Part of this dynamic is support for policies which enrich these mega banks at the expense of banks attempting to serve the underlying economy - a role mega banks and Wall Street clearly are not filling. Many, if not most smaller banks and community banks remain in serious crisis while Wall Street uses its taxpayer booty to lever up the same risky schemes they have been utilizing for years to illegitimately drain capital out of the economy and out of legitimate community and regional banks. This dynamic is picking up momentum as mega bank's use of trillions of dollars in taxpayer monies gives them an incredibly unfair advantage in the market. An advantage that legitimate regional and local banks simply cannot compete against. Almost a self-fulfilling prophecy of harming heretofore healthy banks by being able to offer taxpayer subsidized services at below the cost of health banks or the market. A nearly exact sentence we wrote about almost a year ago on here. This is structurally damaging the banking system even more than the shock caused by the initial crisis. A dynamic we have highlighted for almost a year and one that remains a serious, serious problem of maintaining these government-backed zombie banks.

In other words, Wall Street and Washington in their corrupt dance are unwittingly creating our own future. An unpleasant future. And both are financial benefiting handsomely by doing so. By both paying lobbyists and politicians tremendous taxpayer backed monies to keep reform from taking hold and by Wall Street mobsters extorting hundreds of billions of dollars in bonuses for perpetuating this dynamic.

This crisis is far from over. As an example, we have been unique in our consistent remarks that we believe Goldman Sachs has a very substantial probability of facing future crises and possibly even failure at some point due to the unsustainability of its business model. Goldman is dealing with the same dynamics which led us to remark that Merrill Lynch's business model was not sustainable.

If we look at community banks and regional banks - which serve the underlying economy - we see that most rallied less than two months off of the March lows versus the eight month rally seen by the general stock market. In fact, the regional banking index shown below had half of its rally in the first week off of March's bottom where it gained approximately 4.5 of its total 9 point rally. Many community banks are still scraping near the bottom of their March lows. The fact that the regional banking index hasn't made a single point of progress in six months and community banks are in similar or worse situations tells us a stark reality. That firms (and by inference American citizens) not on the government dole remain in serious trouble. That even hot money realizes these firms aren't worthy of a trade. For it is only being on the government dole that guarantees firms will be able to show pseudo-profits.

Given the business of regional and local banks reflect fundamentals comparative to Wall Street's taxpayer-funded unsustainable casino-methods of making money, we get a better look into economic reality by looking at local and regional banking results. Results remain muted at best and continue to deteriorate at worst.

Wall Street is contributing to this crisis by trading the economy into collapse and buying government debt to rebuild their balance sheet rather than investing in the economy. Wall Street's greed at all cost is generating short term trading profits which are in fact contributing to deteriorating fundamentals.

In an effort to re-ignite the status quo instead of instituting the economic and financial reforms needed, the government and the Federal Reserve are both unwittingly killing the economy and our banking system. A major reason why government should simply set very sound rules for commerce in the economy, enforce them diligently and stay out of the way. Fiddling and fidgeting with new rules, regulations and special favors encouraged by monied interests simply adds to the malaise and ultimate destruction of economic opportunity.

The government remains the primary hindrance to economic reform.

S&P Regional Banking Index (3 wave rally count complete?)

Friday's Pricing Action Rejected The S&P's Rising Wedge Trendline

Thursday's rally was cheered because of the GDP data. Really, that was irrelevant. We were more oversold than at any time since the March low this year with a lot of heaving dumping of stock the last week. Thursday's rally was technical in nature and driven by the futures market as opposed to a substantial number of buyers in the cash market.

I pulled this early Friday so the chart doesn't reflect the entire day's pricing action. (We finished below Thursday's low.) This is a magnified chart of the bearish rising wedge on the S&P we put up a few weeks ago. Wednesday's pricing took out the rising wedge's trendline created off of the March and July lows. Thursday's rally pushed back up against the trendline. In other words, what has been support on the downside has now become resistance on the upside. At least for now. Friday's pricing action rejected an attempt to regain the trendline. Again, this type of action is a sign traders are driving this market. What's new?

Washington Piggery Continues As The Lobbyist Bubble Grows - Change You Can Believe In

Link here.

Steve Rattner On The Auto Bailouts

I'm not going to spend a lot of time on this post because Steve Rattner's remarks are much more worthwhile. We have written extensively about the auto industry on here over the years. Most of our remarks have turned out to be spot on. As an engineer, as someone who has extensive experience in business process, in benchmarking, in management consulting, I have a firm understanding of the auto business and what ails them. Some of that ailment is a result of poor government policy, some because of a combative nature of the UAW and some because of failed economic ideology. But the vast majority of the failures of the American auto industry are because of horrible, insular management. In fact, horrible management led to the combative nature of the UAW. As we have remarked before, unions are simply market responses to hegemonic authority and concentration of power. It's the same dynamic response to tyranny that led to the concept of democracy.

By the way, Edmonds came out this week and said the government's Cash for Clunkers program likely cost $24,000 per vehicle. We used a lower figure in our napkin analysis based on the feedback of a Ford executive but regardless, the outcome is the same. Taxpayers were paying GM to build cars. For free. A general truth is that if government officials knew how to run a business and do so successfully, they would be running a business. I think this data point helps substantiate this fact. It's also why the home buyers tax credit is going to turn out to be a major flop.

Anyway, some interesting feedback from Rattner below.

Inside the GM/Chrysler Rescues

Why we had to get rid of GM's CEO

The auto bailout: How we did it

Galleon Paid Hundreds Of Millions Annually For Information

Well, this Galleon probe has turned into a doozy. Supposedly the firm spent $250 million - often much more - annually, obtaining information that would give it and edge. Information not available to the general public. This is reminiscent of the time leading up to the collapse in the Great Depression where manipulators of stock pools and bucket shops scammed investors. Wall Street's fraud is endless and just about the only constant fixture in American history. Its power and corruption needs to be busted up. Forever. As we have highlighted before, a distributed electronic capital model would serve democracy substantially more efficiently. And take the innovation and creation away from capital gatekeepers on Wall Street and put it into the hands of those who deserve it - the creators of capital.

This mess highlights how important transparency is. As we have remarked many times on here, companies like Goldman Sachs, Citi and others were not successful because they were brilliant, they were successful because they rigged the game.

When anyone pays government officials millions of dollars to nearly guarantee the outcome by rigging rules to manipulate markets, be it Wall Street or defense contractors or insurance companies, you are going to make money. And loads of it. At the same time, you are taking away competition and economic vibrancy. Why? Because you are in the market before the general public and even competitors realize the rules to the game. Or you are forcing competitors out. As the other participants catch on to the rules and seek to participate, you can always be at least one step ahead and leave your competitors holding the bag. I view this as the dynamic that was in play which took down Merrill Lynch, Bear Stearns and Lehman. Goldman was the leader in the game of many exotic debt instruments which took down Wall Street. Other firms were trying to follow the leaders. By the time these firms were heavily into the game, some of the other firms were already on the opposite side of many trades. It wasn't brilliance which put them on the opposite side of the game. It was because this is a rigged scam.

We need complete transparency into markets and Washington. Our economy will eventually heal itself when this dynamic is dealt with.

Key China Box Index Drops First Time Since June

Link here.

Why Do We Need A Central Bank?

Well, the main reason we needed a central bank is to fund wars. It's no coincidence the Europeans created both the central bank and perfected repressive colonialism and empire. They go together like peanut butter and chocolate. Coincidentally the Federal Reserve's creation happened just as World War I broke out. Or maybe not so coincidentally since the winds of war were in the air at the time of the Federal Reserve's creation.

The United States profited handsomely by extending credit to European countries during WWI so they could pound each other into oblivion. None to ironically, there were substantial problems with mass desertions in WWI. It's easier to sell a war when you are able to make your enemy out to be evil or if they actually are evil such as Hitler was. WWI had relatives and neighbors killing each other for no good reason other than some fat ass sitting on a throne told people it was necessary. Not generally a motivating factor to encourage voluntary assignment to die. War is an old man's game where young men die. I have a better idea. Let's let those who start wars lead us into battle. The majority of conflict would be eradicated given most old men are better at killing other people's children than facing death themselves.

The U.S. extension of credit to Europe had multiple beneficial effects. One, American businesses profited by selling the Europeans armaments and supplies. This made American businessmen rich and provided American jobs. Two, by the Europeans blowing each other to smithereens, that left economic domination exclusively to the United States as the economy of these countries was left in shambles. And thirdly, we could manipulate the Europeans because they were indebted to us at the end of the war. All of this had an effect of continuing our economic and political domination. And, of course, allowing the U.S. to rise to become the global military superpower. I'm sure none of this ever crossed the mind of any political leaders. Rather war is always a matter of good vanquishing evil.

Of course, look what Wall Street will do for a few billion dollars. Imagine what impact on the human psyche a few trillion dollars has. In today's world it is unsustainable military spending that is bankrupting the U.S.

..........War is the common harvest of all those who participate in the division and expenditure of public money, in all countries. It is the art of conquering at home; the object of it is an increase of revenue; and as revenue cannot be increased without taxes, a pretense must be made for expenditure. In reviewing the history of the English Government, its wars and its taxes, a bystander, not blinded by prejudice nor warped by interest, would declare that taxes were not raised to carry on wars, but that wars were raised to carry on taxes..........

.............Every war terminates with an addition of taxes, and consequently with an addition of revenue; and in any event of war, in the manner they are now commenced and concluded, the power and interest of Governments are increased. War, therefore, from its productiveness, as it easily furnishes the pretense of necessity for taxes and appointments to places and offices, becomes a principal part of the system of old Governments; and to establish any mode to abolish war, however advantageous it might be to Nations, would be to take from such Government the most lucrative of its branches................

As many great minds have noted, war is the health of the state. War on drugs, War on terror, War on crime, War on poverty ...... Curiously, where is the war on the tyranny of wars? On the suffering of innocent people? And where is the war on unemployment in the U.S.? It seems the military contractors and banksters won that war long ago. Apparently the unemployed in the U.S. is the enemy combatant in that war.

Anyway, this was just a mini rant leading into an interesting article at public broadcasting. I would argue that many of the points made in this article are really begging the question of why do we need private banking? Localized public banking would serve the community, local development and employment. And it would not only be capitalistic but unlike private banking, it would be democratic. And because it would be public, its operation would be completely controlled by a democratic society. Isn't it time we marry all of capitalism with democratic principals? Oh the horror of such a concept. It would mean elitists would be held accountable to democratic ideals instead of their often feudalistic tyranny imposed on society by many sociopathic CEOs and Wall Streeters.

As a final note, as I've said before, I'm not so much against a central bank as I am against the source of government spending and our national banking system being private. It should be public. If private financial institutions want to compete with a public banking system, that's fine by me. That happens in countless countries throughout the world.

New American Economic Winds Of Change Are Growing - President Obama Sees Worst Approval Rating Drop In 50 Years

As we have discussed, one needs to focus on psychology, sociology and human behavior to glean the future of economics in times such as this. There are very, very substantial social changes that are going to impact the future economy.

A perfect example is that the U.S. has generally relied on trickle down economics for the past thirty plus years. In order to keep this scheme going, it was mandatory for the banking system to extend credit to lower and middle-class Americans as the economy continually lost more and more vibrancy due to this ideology. This extension of credit coupled with lost economic opportunity ultimately translated into wealth being continually sucked out of the vast majority of American households. This is the reason why we have such concentration of wealth in the U.S.. Not because the wealthy are brilliant. Not because they invented new sources of capital creation. But because they took it. Obviously there are exceptions to this rule as legitimate capital forming businesses continued to operate and to be created. Remember Ross Perot's famous remark from the early 90's. A cassandra ahead of his time. The Republican and Democratic stooges running the Bush and Clinton camps marginalized Perot as a crackpot. The reality is quite different.

Conversely, the Wall Street Journal reported a few days ago that this extension of credit to middle class and underprivileged Americans as the "Democratization of Credit". That's really quite hilarious were it not so utterly vile and a complete lie. This dynamic did not serve democracy at all. It served the policies which concentrated wealth in the hands of a very few. What they called the democratization of credit is nothing more than wholesale usury and corruption of the American economy. The Wall Street Journal's article, were it accurate, should have read "The Slow Decay of the American Economy Required Access to Easy Credit By Underprivileged Americans". More lies, damn lies and statistics from the mainstream media.

This and other substantial social dynamics are going to drive future economics in the United States. Period. In the end, I could really care less about capacity utilization or jobless claims. They are truly irrelevant. Instead I really watch for validation of the social dynamics that are building beneath the radar of the mainstream media and our Washington overlords. This drop in Presidential approval ratings indeed is one of those data points. Curiously, I wonder how many people polled would respond that we have a Constitutional representative government? Do you feel like Washington generally represents you? Your family? Your country?

This economy is not coming back regardless of Wall Street and political cheerleading to the contrary. Restarting the credit engine to pile more debt onto a broken economic model is not a recovery. It's a lie in both morality and truth that will reveal itself in due time. We are going to see a new economic model unfold. And the people of the United States will drive it. Not politicians. Not the President. Not business. Not Wall Street. These pawns will all play a role in fulfilling the will of the people either constructively or destructively but the driver for change will be society. The sovereign. It will be the janitor, the bus driver, the construction worker, the doctor, the engineer, the teacher, the mothers and fathers of children. It will not be the Washington elites who created this mess. Politicians and Wall Street still don't get it. They are spending billions upon billions of dollars in a propaganda barrage in an attempt to drown out change but all of the money in the world can't save Washington from change. A first sign of this social change was that neither Obama nor McCain were the big money favorites of either political engine - a point we have highlighted before. Regardless of the countless dollars spent to prop up the party-favored stooges, they lost. Now the tremendous enthusiasm for a new President seeking change has seen unprecedented drops. Not statistical anomalies or generally cyclical approval ratings seen during a President's four year term.

A President with high unemployment numbers doesn't have any other problem. Period. And I think we can be assured that even higher unemployment is around the corner. Possibly substantially higher. Counting those who have already been marginalized or who are just scraping by and you have a very substantial amount of the American population that is very unsettled. And very unhappy with the status quo. Some studies show more than one out of three people either are underemployed or unemployed or have a close relative who is. Watching Washington dither is not an option for most Americans. (Let me insert a remark here. I chose dither last week while outlining this post before Dick Cheney accused President Obama of dither. And while I personally have a high disdain for Dick, I am not changing my use of dither to accommodate him.) And dithering is the normal in Washington. Anyone attracted to politics for power or acceptance, as are many, are almost always psychologically predisposed to never make a decision. Why? Any decision threatens a potential constituency, their re-election and ultimately the emotional acceptance they so crave by seeking public office in the first place. Ah, but a leader understands times such as this and that making bold decisions actually leads to acceptance.

Because of these psychological dynamics, Washington is by definition a leaderless vacuum. We need virtuous leadership. Someone to institute sound policy on behalf of the people. And fast. President Obama may be a virtuous person but he has shown no desire or ability to be a great leader.

This drop in the President's approval rating was easily anticipated - earlier this year the President's approval rating dropped from about sixty percent to the mid thirties in a few of the Midwestern states. An unprecedented drop in such a short period of time. This drop isn't about health care reform, right wing radicals planting lies about the President or racially driven as some would have us believe. That's preposterous. A racist does not approve of a President then six months later determine they don't approve of his leadership. The press and supporters of this administration are having a field day attempting to marginalize dissent. Dissent that is so necessary to a functioning democracy. There may be radical or racially-motivated elements out there, and there may be many of them, but comparatively they are a very small measurement of the electorate. To label those who are concerned about the obvious Washington corruption, the loss of jobs, our national sovereignty and a government that doesn't serve the will of the people serves only the purpose of the elite and those wishing to maintain political power. This political finger pointing and labeling is utterly offensive on every level. It denigrates the intelligence and virtues of most Americans. Americans of all walks of life, race, creed and beliefs share similar virtues and concerns. People who want economic opportunity, want corruption cleaned up and want a government reflecting core human virtues. And they don't want to hear excuses about why a President who has been in office for close to a year hasn't done a thing to address any major issues but instead is perpetuating the same behavior. If this President were to embrace a virtuous populist agenda, his approval ratings would soar.

This dynamic adds more validation to post earlier this year comparing President Obama to President Hoover. Intellectually brilliant men but failed leaders who don't grasp the concept that great Presidents empower society to do great things and provide the enablement for this to happen. Both men are beholden to the status quo in economic ideology, the entrenched political stooges and failed policy. Given my voluminous posts on empowerment, I obviously don't believe we need government-run jobs programs. Or that the government must step in and spend because the private sector won't. These are lies. And we'll flatten them like a pancake in the future.

Finally, even if government wants to play a larger role in the economy, big business should be excluded from any economic stimulus. That is, unless it represents systemic risks. And even then involvement of the people should be limited and protected by government. To date, all stimulus has gone to big business. All of it. Large corporations employ many people but they have been a net destroyer of jobs for forty years. Why would they change that forty year trend and start hiring Americans after receiving our money as stimulus? An absurdity. Additionally, allowing them to run roughshod over the economy kills new business investment and innovation. And it kills debate in Washington where they spend money to marginalize dissent or new ideas of governance. Big business kills the proper functioning of a democracy. Purchasing favors from politicians is killing our economy and our democracy.

The winds of change are in the air. And the future is going to be substantially different than any of the Wall Street or Washington elite believe.

Link here.

Marc Faber - Invest In Emerging Markets Because The Dollar Is Going To Zero

As we have been writing for years, I do agree with Marc that the world is going to go boom. But, we disagree on the dynamics of how that will happen. Regardless, Marc is always entertaining and unvarnished. Why would this interview be any different?

link here.

New Mortgage Applications Crater

link here.

Frankenstein Lives - Global Synchronized Boom

I randomly picked a handful of equity markets around the world to include in this post. All of these markets collapsed simultaneously last year then had the same reactionary lows last year. And then on March 10th, had the same rally low. All have the exact same rally patterns since. And all are driven by very tight volatility rallies.

If this doesn't concern you, well .........

Just as we said before the 2008 collapse, all financial markets and assets would sell off simultaneously. The concept of asset diversification was and remains a ruse. And those remarks were justly accurate. The same dynamic exists today.

Before the collapse in 2008 we wrote about Wall Street and hedge fund comparatives to 1929 stock pools and the associated effects of manipulation, momentum trading and piling on to create equity and commodity bubbles, we wrote of the fact that program trading accounted for massive volume on the exchanges and the still unreported fact that on foreign exchanges much of the trading is from outside of the country, ie American and European hedge funds and banks. Now much of these remarks are finally being reported in the press. And rightly so. The only problem is that they are being written as a post mortem. And they will most certainly be reported again after the next post mortem. These dynamics and more are contributing to perfectly correlated global markets.

Anyone trying to reason this market with comments about the "market" anticipating an economic recovery, or the market is fairly valued at a certain price or the market is anticipating a future earnings projection is missing the entire forest through the trees. Entire.

The only thing world financial markets are telling us is that the horror of Frankenstein lives. Absolutely nothing has changed. Risks are higher than at any time in my life. The new global synchronized boom will again be followed by another global synchronized bust.


Ireland
Israel
Germany
Spain
South Korea
Mexico
Brazil

Timothy Geithner, His Replacement At The New York Fed, Goldman Sachs And The Seamy World Of Opacity

I'm glad transparency into government is such a high priority for our captors.

Geithner is the perfect political stooge. I wonder where a poll would put his approval ratings? Somewhere close to King George I would suppose.

Another Look At The Nasdaq Transports And Dow Theory

The NTI is a substantially more representative look at reality comparative to the very narrowly focused and improperly focused Dow Transports. Dow Theory holds weight because it was representative of the railroad business in the United States. Now the Dow Transports are comprised of a handful of companies, many of which have little to do with transportation in the American industrial economy. As we have highlighted previously, the NTI is a far better representation of the underlying economy. Noticeably, it rallied a little over a month off of the March low in what has been a liquidity-driven eight month rally.

Except for a minor breakout which has now failed, at least for now, the NTI has done nothing for six months. NTI firms are not highly liquid and don't have large derivatives markets associated with them, ie Wall Street and hedge funds won't seek them out as a trade => They are far less prone to manipulation by Frankenstein finance and Wall Street mobsters.

These are firms whose stock results more appropriately reflect the reality of fundamentals and are drive more by the underlying economy and long term investors seeking value or investment sustainability. Huh? I know those terms mean nothing anymore but eventually they will mean everything.

On a final note, I'm a big believer in three wave counts for corrections. (As highlighted below) Whether they are usable as an investment tool is highly dubious but I do believe there is a recurring pattern of a correction's initial pulse, followed by a countertrend move then a final pulse. Notice I said three wave counts for a correction. By correction I mean a move counter to the prevailing trend. In other words, in a bear market, a rally such as we have seen in the last eight months, is a correction - common sense but counterintuitive. That is, unless you believe we are in a bull market.

Our Annual Repost Of The Top 41 Untruths Perpetuated By Wall Street

I have posted this in the last three Octobers. These are major themes we have written about extensively so I decided to put them into my list of untruths. When this was first posted, we were still in a bull market so obviously they were generally considered to be views of a crackpot by our fearless leaders on Wall Street and many global bulls who happened to also be American economy and dollar bears.

All of these untruths have proven to be accurate or there are seeds still building in their development. Since we are far from out of this crisis, none of my perspectives on these issues have changed. And many are still considered to be crackpot views.

If nothing else, this is a reminder of the constant lies and media manipulation that are so easily forgotten. As an example, it's pretty hard to remember the incessant babble on CNBC about how much global liquidity existed. And how bullish that was for the future. Even though we were writing of coming liquidity shocks.

Top 41 Untruths Perpetrated by Wall Street

1. We will get a healthy and much needed 10% correction and restart the second phase of a multi-year bull market
2. Buy this dip because because earnings were great
   
3. There is too much global liquidity for the markets to go down
   
4. Interest rates must go up to kill the commodity run, inflation and the global equity markets
5. China is an economic miracle
6. The 21st century is the Asian century
   
7. The U.S. (and I guess by implication all democracies) has lost its economic leadership
8. The stock market is cheap
9. Risk management.....Well, need I say more
10. Continued globalization is a foregone conclusion
    
11. Emerging markets and (Brazil, Russia, India, China) are a safe havens while the U.S. economy and dollar craters
    
12. American manufacturers cannot compete and offshoring or doom is inevitable
13. The dollar is doomed because America is a land of spend happy dunces
14. Capital equipment spending will rise from the ashes and drive us to a new bull run
15. The Federal Reserve will save the economy and by implication the stock market when they cut rates
16. Financials are defensive stocks because they pay a dividend
    
17. Defensive stocks are a great investment in any coming market decline
18. Inflation is out of control and interest rates must go higher
19. This has been the best global growth story ever and it's unstoppable
20. The American consumer and the housing market are the major concerns behind a recession. (They are symptoms.)
21. Oil is at a permanently high plateau
22. Commodities are in a twenty year bull market (Maybe many years of yo-yo action)
    
23. The rest of the world will pull the global economy through US weakness
24. Global companies get more than half of their earnings overseas and that makes them a great investment
25. There is always a bull market somewhere. (Yeah, and it will likely be in the U.S. dollar comparatively)
26. Sentiment is too bearish for the market to sell off
27. The U.S. doesn't drive the global economy any more
28. Markets must exhibit mania and blow off to have a peak (That's double speak for people who don't know what's going on and they need a sign from God to see a market topping)
    
29. The Federal Reserve is printing money (Total baloney)
    
30. Alan Greenspan caused all of this (Although he didn't help)
    
31. Goldman Sachs is a great investment
32. This can't be a top because Goldman is levered to the hilt
    
33. Wall Street is smart money
34. It is different this time
35. The real estate slow down will be contained
    
36. The US is a service economy and manufacturing doesn't matter anymore
37. The consumer loves high gasoline prices (or more eloquently spoken by Wall Street as high oil prices haven't hurt the consumer)
38. Unemployment is at 4.5% and by implication the economy is great
39. Apple and Google are the next great thing and deserve their stratospheric valuations (As I said before, I'd rather own all of the equities in Thailand than Google for the same sum of money.)
    
40. The Fed equity valuation model tells us the market is very undervalued
    
41. This final one is for emphasis and has actually been discussed above: the dollar will crater if the Fed cuts rates.
    

Teddy Forstmann On This Crisis

Some of the old timers on Wall Street understand the severity of what is happening on Wall Street. Not all of them are incessant cheerleaders of this sham either. Most people who realize what is going on seem to generally avoid the media. Yet we need successful business executives, politicians and public servants to speak out against these crises in order to impact change. We need leadership from people that large swaths of society trusts. This includes people like Paul Volcker, Colin Powell, Warren Buffett and others.

Teddy Forstmann is one of those names within the financial community. He corroborates everything we have talked about on here for years from government complicity to the extreme risk-taking that will bring down Wall Street and our banking system again. This is a good interview even if Wall Street pumper Charlie Gasparino is giving it. (It's hilarious that Gasparino criticized bloggers writing of coming crises as idiots and ran down bearish guests on CNBC as know-nothings while he pumped the brilliance of Wall Street charlatans. Then he turned around after the crisis had already happened and wrote a book condemning Wall Street. The reality is Gasparino was a cheerleader who didn't see any of this coming but now we are supposed to buy his book telling us how this crisis happened? Typical CNBC.)

Dow Goes Dumpster Diving - Drops 200 Points In One Hour

Market behavior has changes substantially since mid-September. A point we have made in a few posts. And now a very wild swing in less than an hour. A wild dump on the close one day last week. A coincidence? Irrelevant? November might be very interesting.

The U.S. Government's Debt Shell Game

Update: The link to the WSJ article below was broken. I re-linked to the article. I believe the article's content is free which is why I linked to it. If you cannot view the content, go to Google and type in "Preventing the Next Financial Crisis Wall Street Journal" and the article will pop up with full readability. A dirty little secret about the WSJ - content driven by a Google search is often free. If you go directly to the WSJ website, that same content requires a subscription. So, if you know the title of an article on WSJ.com but you don't have a subscription, you can often go to Google, do a search and read the content at no-charge. Obviously there is a reason for that. They are trying to drive Google traffic to WSJ.com

We have written about this quite a few times in the last year. I believe the first time was around last December when we wrote that the government was bailing out insolvent banks and these banks were turning around and bailing out an insolvent government. Most recently we remarked that this dynamic was probably a major contributor to why big banks are not being broken up. That the government needs these big banks to keep buying their debt.

Allan's remarks aren't getting a lot of mainstream traction but this is nothing more than a shell game. In fact, he really doesn't go far enough in explaining the dynamic and its consequences. The mega banks were insolvent and needed a bailout from the government, then the government is insolvent and needs the bailed out financial firms to buy its massive new issuances of debt to fund its wars, stimulus, global meddling, etc. Ha ha ha. (That's a nervous laugh not a jovial laugh.) I think we used to call this a pyramid scheme.

Mega banks serve the needs of the state. Community banks serve the needs of the people and a functioning society. If I draw this as a Venn diagram or write it as Boolean equations, we can logically conclude the state is not serving the needs of a functioning society. What a surprise.

It's good to be the king. Not much longer though.

Sandy Weill, The Godfather Of Glass Steagal's Destruction, Gives Watered Down Plan To Overhaul Financial System

I can't believe the Wall Street Journal would even print this story. To me, this article is so off base it appears to be driven by conflicts of interest, a desire to save his legacy, a lack of understanding of risk or some combination of the three. Years ago when the world was partying hard and we were expressing concern over our banking system, we linked to the PBS documentary highlighting the fall Glass Steagal. Citigroup, now a zombie bank and a major reason why the American people are holding trillions of dollars in future obligations to Wall Street's sham, was part of a cabal spending hundreds of millions of dollars lobbying Congress to overturn this Great Depression era law.

(Here's the link again if you want to toss your lunch.)

After 12 attempts in 25 years, Congress finally repeals Glass-Steagall, rewarding financial companies for more than 20 years and $300 million worth of lobbying efforts. Supporters hail the change as the long-overdue demise of a Depression-era relic...............

On Oct. 22, (1999) Weill and John Reed issue a statement congratulating Congress and President Clinton, including 19 administration officials and lawmakers by name. The House and Senate approve a final version of the bill on Nov. 4, and Clinton signs it into law later that month.

Just days after the administration (including the Treasury Department) agrees to support the repeal, Treasury Secretary Robert Rubin, the former co-chairman of a major Wall Street investment bank, Goldman Sachs, raises eyebrows by accepting a top job at Citigroup as Weill's chief lieutenant...............

Lawrence Summers Sticks Foot Squarely In His Mouth And Simultaneously Up The Average American's Derriere

"Just as in war, there are unintended victims so, too, in economic rescues, there are unintended beneficiaries." -- Larry Summers, economic adviser to the President

Unfortunately, the primary source of this remark is the Wall Street Journal and to read the entire article requires subscription so I won't link to it. Now I like Larry Summers as someone who is a very capable thinker, but I think the evidence seems to be growing that big Lar played a crucial role in building this crisis through his role within the Clinton administration. Then, as did Robert Rubin, he left and went to work for firms who benefited for their ideological policy of deregulating and destroying our banking system. At best I'd call that cronyism. At worst I'd call it something worse. Maybe even corruption. Inquiring minds would like to know.

This remark given in a speech last week should be getting way more play within the media. Unintended beneficiaries? Are you kidding? Banks are the beneficiary of $12+ trillion dollars in taxpayer bailouts. Unintended? How unintended is $12+ trillion? Did you unintendedly get $12 trillion?

Summers goes on to remark that it's natural that some people will get rich as the economy recovers. Yeah, I think that would be the people who were paid $12+ trillion. Summers' remarks are completely morally bankrupt. Banks are still insolvent and Wall Street crooksters are paying themselves hundreds of billions of dollars?

The White House has blood on their hands. In fact, they are bathing in it.

China's Economic Growth Is Smoking Hot

Now obviously we continually question the data coming out of China. For God's sake, the country is run by communists. China's economic growth is coming in very hot. Is the number real? Well, there are two ways to look at this. One, China's ministry of propaganda is cleansing the data because in a communist state, power and control must be projected both internally and externally. Fear and terror is the source of the state's power. Without terror, does anyone really believe a one million man army could take away God-given dignity and basic rights of 1.3 billion people? On the other hand, we see China has deployed the greatest known stimulus plan in history and is extending credit at a dizzying pace never before seen. So, could the economy be growing at 9%? Sure it could. In the end, does it really matter? How much more bad can bad get?

Are Our FDIC Deposits Safe And Will The FDIC Run Out Of Money?

As a follow up to my remarks of a little over a week ago, we are going to look into the FDIC. I want to make a few comments first because the blogosphere in particular is full of people who have dedicated a substantial amount of brain waves highlighting the crisis of funding at the FDIC and how it is eventually going to turn into a major crisis. I first have to warn you that there are many very, very complicated mathematical formulas and compound sentences in here. Along with a few dangling participles. You might have to take a refresher course in third grade comprehension before you continue with this very, very complicated topic.

The concern about the FDIC reminds me of a scene in one of the Indiana Jones movies. Indiana is met in the street by a formidable adversary who draws a sword and goes about impressing onlookers with his tremendous display of swordsmanship. It appears as though Indiana is completely doomed and about to lose his life or limb. But then what happens? All of a sudden Indiana pulls out a gun and without expression nonchalantly shoots his adversary dead. Almost as if it were an afterthought. He shrugs it off and continues about his merry way. And that is what we are going to do today. After all of the debates and intellectually-reasoned arguments of why we should fear the fate of the FDIC, we're going to pull out a gun and shoot the arguments for what they are - lots of hype without merit just like the swordsman.

I have had this discussion with more than a few people offline over the last year or so. People are concerned that they will lose their money if the government is insolvent and cannot replenish the FDIC. Well, the government is in serious straights and most certainly will have a funding crisis. The ability of the government to fund its empire of global meddling is bankrupting the country but FDIC insured deposits are a separate issue.

Typically, the FDIC uses bank fees to fund their insurance pool for insured accounts. This approach should be a constant reminder to banks that their mistakes have a price. That pool is running low because of a reasonably large number of bank failures. (Obviously no where near the Great Depression levels. At least not yet.)

If the FDIC is ever in a position where it cannot raise enough fees from banks to keep their insurance fund solvent, I'm not sure what they will do but I can tell you exactly what they can do. It involves some very complex mathematical formulas, lots of time consuming calculations and countless hours of detailed analysis by a roomful of analysts of the intellectual caliber of Albert Einstein. Okay are you ready? They should print it. And you should write Sheila Bair, Ben Bernanke, President Obama and even that toady Timothy Geithner to tell them to print it. In fact, it would be criminal were the FDIC to ever borrow money from the private market, ie issue new government debt, were its funds ever depleted. New debt to replace money that already exists? Lunacy. Were we to see a terrible banking calamity, all the government would need to do is print the replacement money. It's simply replacing existing savings. Because a bank fails doesn't mean FDIC insured savings must disappear. Even if the FDIC funds are spent.

This is not profligacy, it's not illegal, it won't cause inflation, it won't hurt government bond holders, it won't destroy the dollar or any other fear-mongering statements that can be dreamed up.

The concept of federally insured savings is so that our money will be safe in times of crisis. Print the replacement money. That is society's savings. I didn't use my savings to invest in risky schemes or failed trading strategies or derivatives. Or loan my money to speculators or unsound business ideas. Banks did that. My savings are not owned by any bank and are not part of any bankruptcy proceedings other than my own. My savings are mine and they are federally insured to be safe from criminal banksters, fraud, banking crises and poor business decisions by banks or borrowers.

One of the greatest crimes against the American people happened under the Herbert "I helped create the Great Depression" Hoover administration. Before Roosevelt was elected and saved us from neoliberal economic ideology that ironically also caused our current crisis courtesy of the same neoliberal economics and America's greatest central banking buffoon Alan Greenspan. (That Frontline special I remarked of earlier this week was absolutely abhorrent - indicting Congress, the Clinton administration and Greenspan as complete dolts. Something we now all know.) Anyway the Hoover administration adhered to a concept that is now embraced by some of these fringe interpretations of economics shared by many modern0day Hoover-ites. That is, the only way the economy will cleanse itself is to let the system collapse. Or let the chips fall where they may. This is the ideology of the mathematically challenged. It is apparent anyone with this perspective doesn't understand either complex systems or gaming theory. Otherwise they would disavow such lunacy. And there are some very prominent financial bloggers who believe and perpetuate this gibberish. Bad debts need to be taken care of but this can be handled by any number of actions. None of which involve letting the system collapse or the chips fall where they may. We have criticized this lunacy numerous times. It's the same argument that regulation doesn't work. Or markets are self-regulating as Alan Greenspan argued. In fact, re Frontline, Greenspan argued that fraud should not be regulated. In my opinion, if the Frontline story is based in fact, Greenspan has a primary role in the fraud and ultimate collapse of Wall Street.

Anyway at the onset of economic crisis post 1929 we saw some of this "let the chips fall where they may so the system will cleanse itself" in action when neither the Federal Reserve nor Hoover's administration did anything as banks started failing. Eventually upwards of five thousand banks failed. Before Washington clowns knew what was happening, it was too late. The crisis had metastasized well beyond their worst fears and we were in the greatest crisis in America's history. It was too late to reverse any damage. Maybe they didn't cause the crisis but they didn't do anything to ameliorate the situation either. Along with those thousands of bank failures went the savings of innocent, hard working Americans. Why? Because the neoliberal Hoover-ites (I would classify them in the same category of what we now see as modern-day radical interpretations of Austrian economics.) running the country thought that the system needed to cleanse itself and we'd soon be back to normal. How'd that work out for you? I bet Herbie would do things a little differently next time.

So, what would the Great Depression have been like were the Federal Reserve to have guaranteed people's savings and printed their lost savings as banks failed? Who knows. I don't have the statistics of how much of society's savings was lost. That time would have been horrible regardless but we do know it that were much of society's savings not lost, it would have made some constructive impact on the crisis comparative to sitting back and letting the world collapse. There's some great merit to many concepts in Austrian economics. But there are a lot of fools who have no idea what they are talking about espousing radical interpretations that are pure nonsense.

Our savings should be protected at all cost. Federally insured deposits need to be federally insured. I could care less about troubled banks themselves. Sell them off, let them fail, sell their assets or close them. And if necessary through some course of emerging crisis, the FDIC should bump the limits on savings accounts if that is needed to ensure stability.

There are people in prison who are guilty of much less than what many politicians and central bankers did before and during the Great Depression. And ironically, even after witnessing such lunacy, eighty years later many of these beliefs are still clung to by neoliberal nuts.

White House Says Economic Stimulus Has Already Had Biggest Impact

and the future impact will decline into next year. $787 billion stimulus - $194 billion spent = a lot more money to be spent. Can anyone please describe Romer's remarks to me in simple logical terms?

I have no confidence that Christina Romer could tell me which way north is anyway. She's a little like Paul Krugman telling us government's massive debt is saving us from another depression. Government could save us from a depression but not by racking up more debt for wars and banker bailouts.

By the way, what exactly has $194 billion done for you? I didn't get any of it. It hasn't kept people in their homes. Did it go to underprivileged families to pay for rent or meals or health care? I think what it did was allow state and local governments to keep from prudently assigning dollars to necessary government services and cutting unnecessary services and expenses like the rest of us have had to.

Need A Credit Card? How About 79.9% Interest Rates?

The Gambino crime family would blush. Usury used to be punishable by death. And usury was defined by any interest above typically 7 or 8%. I vote we bring back this law.

Remember, this is courtesy of your government which allows this heinous activity.

The Rigged Health Insurance Game Is Over

How health insurance companies were ever exempted from anti-trust rules is beyond me. But, the party is surely ending now that the eyes of all Americans are focused on the often heinous acts of these firms. I'm not sure exactly how any of this will turn out but the days of health insurance CEOs making $500 million while denying coverage, canceling policies and essentially in some worst case situations killing people is over. It's time for a little healthy competition.

This brings up a point a friend and I were discussing the other day. Companies are not good or bad. We don't assign human qualities to them. They are just companies. They simply do whatever the laws allow them to do in the name of conducting business. It is government's responsibility to make sure society benefits from the laws created to regulate business. So the tyranny of health insurance companies we see today is the sole responsibility of government which created the laws and allows such tyranny. If government feels as though the only way to enforce morality on insurance company executives is by providing a public health insurance option, well, that's ridiculous. If the United States ends up with a public health insurance option, there could be worse solutions. Like nothing being done. But to enforce morality of the insurance company executives, all they need to do is change the rules to the game.

The U.S. Government Used Psychological Operations On The American Public

Unless you live in a cave, you now realize the massive Iraq war commentary on nearly every television channel perpetrated by former generals and military officials was a fraud. It came out last year that the government paid all of these spokespeople for their "supportive" role. But, now a legitimate news source is going a step further. It is stating the U.S. government attempted Orwellian manipulation of its people using psychological operations - propaganda - intended for our enemies.

Our government seems unwilling to tell the truth about anything. We have a government that uses national security as a reason to classify documents which should be available under the Freedom of Information Act- because they don't want the public to know what dirty little games they play. A government that believes it is above the law and above the sovereign for whom they work. A government that is not accountable to the people who elect them.

Washington is morally bankrupt. And it is not just as it pertains to this economic crisis. If you aren't already, it's time to get active in politics. Write your Congressional representatives. Vote. Be an agent for change. For a government that serves the people of this country in a completely transparent manner. People often feel helpless but that is ridiculous. We have the power of revolution at the voting booth. Our future is what we make of it.

Declassified talking points for paid military analysts here.

Dark Pools To Be Regulated

During the height of the boom, we talked about dark pools and the seamy reason for their existence. I received a few remarks from Wall Street professionals that I obviously didn't know what I was talking about. I guess the SEC doesn't either. The corruption on Wall Street is systemic and massive.

Florida's Unemployed Hits Record

Link here.

During the mid 90's I spent much of my time in Miami. In 2006 a friend sent me the real estate listings of a few condos they were looking at. Coincidentally, one was in the same building as one I was considering a decade before. The asking price had increased almost 400%. Anyone who has been to Miami in recent years knows that the new high-rise condos, hotels and land redevelopment has been nothing short of astonishing. Truly the greatest land boom in its history. Much greater than the one in the 1920s before the Great Depression. Yes, we have seen this game before. As my link in the Columbus Day post cited, history is indeed a weapon. Politicians and Wall Street can line up their lies but I can find substantial historical comparatives to everything we see today. They were lying then as well. A timeless characteristic of a politician is to realize every time their lips move, something dubious is happening. Most likely spin.

At one time I saw a statistic that 17 years of condo supply were either in the process of being built or were planned to be built in the Miami area. I have no idea how this statistic resolved itself with actual units built but I do know many new high-rise buildings are near empty. A friend told me just a few weeks ago that when they look out their window at night some of the new high-rise's on Brickell, a stretch of beautiful high-rise condo buildings has three or four lights on. It's a 50 story building.

"With over twenty-five Brickell condo towers currently completed and ten more planned or under construction, Brickell Avenue has reached a "tipping point" or critical mass to become the most desirable residential neighborhood in Miami."

Miami Beach in particular has gone through boom and bust cycles before. In fact, less than twenty years ago, the city of Miami Beach was falling apart. The Fountainbleu (Where they shot the Bond movie Goldfinger, Eden Roc and others fell into disrepair. Miami Beach's South Beach area had more boarded up store fronts than it did stores. In fact, driving through the area, it looked more like an art deco tenement until revitalization started in the early 1990s.

Miami's real estate market became a magnet for Europeans and South Americans looking to play the weak dollar trade and purchase vacation homes this past cycle. That party is over. Now what? Well, cycles of boom are followed by cycles of bust. Will we get to the point where South Beach properties are again boarded up and the U.S.'s premiere warm weather playground again looks like a tenement? Well, that's really up to the economic policy decided in Washington. But, I wouldn't want to be betting on the Florida economy or sweeping in to buy distressed real estate only to find out there is no recovery. And, there is a lot of big money purchasing distressed real estate right now. They are likely to be punished mercilessly. We wrote on here three or four years ago that real estate isn't likely to recover for a few decades. A fool and his money soon part ways................

As I said on here four years ago, were I to buy real estate anywhere in the world, it would be downtown Detroit, Michigan. End of the world pricing is built into that economy and the skyline is battered. And while it may seem completely hopeless today with neighborhoods crumbling, rampant crime and houses selling for less than $20,000, I believe Detroit is far from dead. But for now, Michigan's unemployed just hit a record as well.

Diet And Depression - Maintaining Balance During Stressful Times

I'm a big fan of Mark Sisson's work. I subscribe to his free newsletter and have generally embraced a similar lifestyle and diet for much of my adult life with noticeable changes in my health and well-being versus when I stray.

Anyway, in today's environment there are tremendous stresses on our emotional well-being from worries over work to the economy and the demands a challenging environment place on our families. I would encourage you to read Mark's most recent post on Diet and Depression. We are finding out more and more how some processed foods and the modern convenience-diet is impacting our physical and emotional health.

Paul Volcker Is Spot On. Ban Derivatives And Risky Schemes From Institutions Entrusted With Protecting Society's Savings

“The banks are there to serve the public,” Mr. Volcker said, “and that is what they should concentrate on. These other activities create conflicts of interest. They create risks, and if you try to control the risks with supervision, that just creates friction and difficulties” and ultimately fails.

We rambled and ranted incessantly on here about the conflicts of interest and the coming doom of our banking system before this crisis developed. Since then, we have stated explicitly that derivatives and gambling with society's money need to be banned from our banking system. Period. Mr. Volcker is spot on. The only reason these reforms are not being considered is because of corruption. That's it. It's not about morality or virtue or democracy or concern for the common good. You remember the common good? It's explicitly stated in our Constitution.

How Big Business And Big Government Steal Your Money

I thought since many would consider my last post to come from a liberal partisan source, I would also give equal billing to the same topic discussed by a very conservative partisan source. But....this is not a three minute Youtube video. It's an hour long presentation. The first five minutes are very worthwhile.

The reality is all people in the United States, regardless of political affiliations, values or beliefs have a common interest in this topic. I will say that the speaker in this video highly underestimates the cost of this dynamic. The cost is not so much consumer prices as it is lost trillions of dollars in economic vibrancy and loss of economic opportunity for millions upon millions of Americans.

People have started repudiating partisan politics and started thinking for themselves. And that means there is a commonality in virtues and ideals. For whatever our differences as a diverse people, we all generally share the same virtues. Corruption is corruption. Fair is fair.

It's Time To Marginalize The U.S. Chamber Of Commerce For Marginalizing America With Its Corporate Personhood Supported Activism

Don't get too hung up on the political messages intertwined with facts on this video. This isn't about buying American. It's about restoring economic dynamism to the American economy by shutting down the voices of mega firms drowning out innovation. The reality is the U.S. Chamber of Commerce does not represent small business, the democratically-driven engine of American ingenuity and economic dynamism. The Chamber is a massive lobbyist in Washington pumping hundreds of millions of dollars into political coffers in the name of mega corporations. This is an attempt to drown out competition and new business creation to serve the stifling policies of mega firms at the expense of society. This is counter to the concept of localization or supporting local business which is a very necessary dynamic for sustainable economics. I believe the U.S. Chamber of Commerce is anything but good for the American economy. It serves monopoly mega businesses which should never exist in the first place.

Link here.

Finally Some Honesty

The White House's political handlers will probably be on television trying to spin this before the day is up. Vice President Biden didn't mean that we were in a depression. He meant it felt like a depression for those out of work.

I didn't see this live so I can only image the TV host's remarks at the end. I suppose he's one of the savants who believes the world is just fine.

Unprecedented Corruption Through Usury And Tyranny Continues Unabated

Link here. And what do the children with limited economic opportunity in Compton, California or Youngstown, Ohio receive in return? Economic opportunity, might I add, limited by economic ideology that enriches Wall Street at the expense of society. Why they get the bill, of course.

This is far and away the greatest crisis in American history. We need public banking. And maybe even more importantly, we need to break up the political party monopoly run by corrupt stooges. Stooges have have encouraged this economic terrorism in our economy.

It's interesting to see that the President is on a fundraiser on Wall Street asking for more political money at the time we are supposed to be reforming the financial system and hopefully corporate governance. How much fundraising money would you suppose the President could raise were he to drive home tough financial reform? How about none.

Change you can believe in? Ha ha ha.

Frontline : The Warning

I usually highlight Frontline documentaries on here since they tend to be good to excellent works of journalism. My dates were off so I had this post slated for next week. The documetary actually starts tonight. That's no big deal because like most Frontline stories, this should be available to view directly from the web.

Many wouldn't be surprised that the seeds for this crisis have been building for a long time. Probably at least 20 years. Some dynamics such as the Nixon move to devalue the dollar by ditching the gold standard goes back 40 years. To believe this crisis is going to be over in six month, as most on Wall Street would have us believe, is preposterous and an outright lie on many levels. Yet were the truth to be told, there is a possibility this country would have a crisis in government with a collapse in confidence. So we play the happy game instead of being honest. Americans can take the truth. On many levels, they already know.

This Frontline documentary is supposedly going to take a look back at many destructive seeds planted by the Clinton administration. It is my perspective that Bill Clinton was most likely the worst President in American history for his many destructive economic policies passed in the early to mid 90s followed by the culmination of the repeal of Glass-Steagall in 1999. A far cry from the consensus of many liberals that Bill Clinton was a great President with minor character flaws.

Steel Production Capacity In China For 2009 To Grow By More Than Entire Production Capacity For 20 Of World's 40 Largest Steel Producing Countries

That is 20 of the 40 largest steel producing country capacity.......combined. How many bridges to nowhere are they planning to build? Booyah! Link here.

Signs Of Global Economic Recovery - Steel Production In World's Second Largest Producer Country Hits Forty Year Low

NOT! Link here.

Global Finance - The Future Of Doom

I would encourage everyone to listen to Lori Wallach on just how corrupt global finance truly is. And how much more corrupt the U.S. politicians really want it to become regardless of what comes out of their lips. This is a very, very, very serious issue. And it is just not the U.S. In fact, Lori remarks how the European banks and political leaders are leading the charge in many respects. Another repudiation of the generally-held belief that this crisis is U.S.-centric. And re-regulation of finance in the U.S. is utter bullshit. The crooks are writing our legislation and the future regulation being considered may be even more unstable. It has become apparent that on most issues President Obama is simply President Bush with a better delivery. If you like neoliberalism as an economic and financial policy, then you have to be one happy camper. All of this is going to take care of itself in a very unpleasant manner.

People really need to think well beyond the obvious debt dilemma of the U.S. to understand how completely shambled the world economy is. The signs of the future are everywhere. From our incessant predictions of a collapse of China, to our predictions of a banking crisis in Russia, to our concerns of meltdowns in Europe, to concerns over the future of the European Union, to the increase in Special Drawing Rights at the IMF, to our writings of a coming collapse in emerging markets on and on and on. Our countless rantings over the years are very unique in their scope and granularity. That's because instead of learning mindless theory out of a Harvard textbook, we were focused on a science-based approach of reality.

These G20 meetings referenced by Lori are nothing more than tea parties for economic idiots. Since when are politicians able to discern what is best for six billion people? Since they have become our overlords. We will eventually experience another global meltdown of some sorts. An unwinding of tremendous global complexity is in the cards. Not just financial complexity either. Remember our posts on possible global supply chain shocks.

As we have stated, we are going back to a self-funded world. Globalization is dead. Global finance is dead. The current economic model is dead.

The S&P's Low Volatility Ascent - It's An Illusion To Believe Markets Can Be Tamed

We showed a similar pattern with Apple some weeks ago. This is a terribly bearish chart formation. The only question is how bearish.

Some chart formations are more reliable than others. A rising wedge is a reasonably reliable formation for what it reveals is a low volatility, highly controlled ascent. This is reminiscent of the 2003-2007 bull market where Wall Street was able to control volatility temporarily. As we stated re the same dynamic before the 2008 collapse, volatility simply cannot be tamed. And Wall Street is employing the same failed strategies which ultimately led to the debacle last year.

We just hit a major Fibonacci turning point before the last minor correction and another very major turning point is almost upon us. Additionally, it was not a coincidence that we recently remarked one of my trading algorithms did not issue a new buy signal off of the last minor correction as it had after every minor correction off of the March low. In other words, market dynamics have changed. Will that be temporary?

I have another chart which goes with this one and I'll try to get it up this week but I have many posts that are already backed up so we'll just have to play it by ear.