Wednesday, March 31, 2010

SEC To Banks: Who Else Used Repo 105? Umm... What The Heck Is A Repo 105? Why It's Wall Street's Latest Fraud.

I guess our regulatory agencies do have one last gasp of virtue left in them. Too bad the FDA doesn't.

We are all becoming fraud experts as Wall Street's many scams unfold. I'm sure we would all demand Wall Streeters have their citizenship revoked if we knew the extend of its fraud. I have already seen enough to wish them on some other country.

Over the past few weeks we have been deluged with this Repo 105 gibberish. We have shown Paddy's videos before on here. He always does an excellent job explaining what are seemingly complex topic which are really not complex at all. They simply use a vernacular most don't see every day. This is a nice explanation of what Lehman and other banks were involved in with their Enron-type fraudulent accounting. Really no surprise since Enron, in the form that collapsed, was really a Wall Street creation. There are also many sources tying Enron to the Clinton Administration. Specifically Al Gore. Something that has been hushed since the very beginning. Really with the latest Frankenstein creations of Wall Street we are simply repeating the same ridiculous schemes that have been playing out for the last fifteen or so years. Here's the Propublica SEC story to go along with the Repo 105 explanation below.

posted by TimingLogic at 6:27 PM links to this post

Visual Update Of The British Pound And Euro, Timely Concerns About Britain And Conspiracy Theorists

Price swings in the currency markets have become very, very large again to show up so substantially on a monthly chart. Both the pound and the euro have experienced what we can classify as a mini crash in early 2010. The pound is now closing in on the crash level seen during the financial market collapse in 2008. Volatility is returning and it appears currency markets are the first to experience it. What's next? Bonds? Commodities? Stocks? All of the above? (As I have remarked recently, I suspect we will look back on U.S. equity market relative out-performance recently as repatriation of hot money from many overseas markets. If so, that's not a good sign for the global economy or for those invested internationally.)

Over the last few years I have remarked on quite a few occasions that I think the British pound is in serious trouble. We haven't really explored those statements in any detail as I said we would. Let's take a moment and delve into my concerns re the pound. (Added to my euro, ruble, yuan and every other emerging market currency concerns.)

First of all, I believe Britain is one of a few candidates for a hyperinflationary collapse. I don't remember if I actually articulated that in my prior posts regarding the pound and I'm too lazy to go back and look at the moment. This is not a prediction. It's a statement of risk. And I don't expect it to be anything that will develop imminently. As a point of reference, there is no one who is currently talking about hyperinflation in the U.S. or Japan who has gotten any currency specifics correct in advance of this crisis. In other words, I don't see any evidence the hyperinflationistas predicting doom for the dollar or yen really understand what dynamics actually cause a hyperinflationary currency collapse. That is, beyond the incessant babble of printing endless money as Zimbabwe has. That clearly is not going to happen. These comparisons to Zimbabwe are either made tongue in cheek as a joke or are made by people who have absolutely no idea what they are talking about. Most people anticipating hyperinflation seem to use profligacy as a primary predictor. That is a fool's game with no legitimacy. Every bureaucracy is profligate. And that will never change. This is a primary example of why opinions are worthless and one must understand the data and a qualitative interpretation of building fundamentals.

Today there is much comparison talk between the United States and Germany's hyperinflation during the Weimer period. We have already remarked before that this is ridiculous. This invalid comparison is similar to the countless interpretations of what caused the Great Depression. There are many accounts of the Great Depression but every mainstream interpretation is generally a revisionist theory using correlation rather than causation. In other words,the Great Depression is explained away by debt collapse. Debt collapse is a serious, serious problem and it looks like we are going to live through it again but this wasn't the cause of the Great Depression. Debt collapse in today's world will only happen because the status quo is in charge of economic policy decisions courtesy of the legalized bribery of our government. One must remember that the Great Depression was not "great" everywhere. It was great specifically in the United States even though there were many countries that experienced a debt collapse. In fact, many countries recovered very quickly. So what was the difference? :) Debt is not the lasting crisis everyone wants to make it out to be.

Anyhow, back to hyperinflation. With no real understanding of the dynamics behind hyperinflation, we hear countless opinions that every country which is profligate is a candidate for currency collapse and hyperinflation.

So, here's a few remarks you won't read from the general hyperinflation carnival barkers. Hyperinflation caused by a currency collapse will only have a chance to develop under some very necessary but not sufficient dynamics. Here are five to consider:

1) A currency that involves very substantial financial speculation. Speculation made available by a government which makes excess currency available to financial speculators.
2) A currency that has little to no intrinsic demand outside of a country's borders.
3) A currency that involves a substantial debtor nation with that debt held outside its borders.
4) A currency which allows unregulated capital flows.
5) A currency in which the government is willing to print money beyond the capital formation demands of a domestic economy.

These five dynamics are necessary but not sufficient. They also existed in Iceland and Weimar Germany. They also exist in Britain today. Let me give you an example of a particular statistic as it relates to one of the five points above. Both Britain's long term and short term gross debt to GDP ratios held abroad are more than 800% higher than Japan. That's right. 800%. I think we can discount Japan as a hyperinflationary threat as now seems to be the most common prediction of the financial community.

Hyperinflation in the United States or Japan just isn't likely to happen in today's environment. There is no such thing as certainty, but I would go to far as to say not only is it unlikely, it really isn't even possible. In fact, as we have noted many times in the last eighteen months, the Federal Reserve could print a fair amount of money to ameliorate this crisis and still not negatively impact the dollar.

There is a chain of events of some sorts that needs to unfold for a currency collapse. These dynamics are nearly impossible to predict far in advance. But I have been watching the financial and political idiots across the pond quite closely. (My God are their politicians even more stupid than ours. Haha.) Regardless Britain is surely in serious trouble without new policies.

It's time for you to finish this post by doing some further noodling and filling in some blanks.

Let me finish this post by taking a jab at many conspiracy theorists as I have before. There are some seeking to sell books, subscriptions or whatnot as it pertains to a global elite's plot to kill or starve or enslave the rest of us. Or whatever notion they have dreamed up. Many of these people believe the U.S. and Britain are engaged in some conspiratorial scam together. And because of that Britain could never experience hyperinflation. ie, It is a perpetrator of this crisis. Let me just say one thing as it pertains to this environment. Never assign brilliance or malice to incompetence as so many before us have noted. Because fundamentals are lining up with what many would conspire to paint as a malicious outcome that was planned, we see all types of conspiracies. That is really curve fitting the data to a theory. It's what Wall Street has been so good at with quantitative finance. In other words, I could make up any type of story to fit data for any event. I could make up a plausible conspiracy as to why you went to the grocery store. Some conspiracies are surely true. Not too many conspiracy theories are true. It's preposterous that anyone would wish to cause global chaos, threaten their own well-being, threaten global war and loss of their own security with theories typically perpetuated by paranoids, fringe elements, radicals and even emotionally-unstable crackpots.

Here is the reality. Everything is in plain sight for everyone to witness. What we are experiencing around the world today is utter incompetence on a grand scale. Incompetence by a self-appointed bureaucratic class of mental morons. A timeless pastime of those who somehow believe in their superior abilities comparative to us poor peasants and conclude they must tell us boneheads how we are going to lead our lives. (A strong case for a federal government's limited powers as outlined in the Constitution. Or at least limited powers without complete transparency into all federal government dealings and affairs.) Contrarily, people who seek power (control) are seldom brilliant. Where is the source of brilliance within the political or bureaucratic class today anywhere in the world? It simply does not exist. All we see is systemic incompetence. To assign theoretical brilliance required to plan these massive conspiracies is simply an overactive imagination. This environment is because incompetent bureaucrats (bankers, politicians, CEOs, the state) have completely screwed up the world with their laughable elitist ideology.

Remember, this is not a Wall Street crisis as so many have postulated. It is indeed a full blown global economic crisis. Those focusing on Wall Street as the source of this crisis are missing the forest through the trees. Wall Street is in a massive bubble as we uniquely wrote years before this crisis unfolded but the outcomes to this mess will be felt in every corner of the globe.

posted by TimingLogic at 5:09 AM links to this post

Tuesday, March 30, 2010

President Obama & Health Care Reform - The President Of Big Business, Back Room Deals And Special Favors

posted by TimingLogic at 4:11 PM links to this post

The Rising Risk Of Far-Right Violence

posted by TimingLogic at 10:21 AM links to this post

FrankenTrout - The Future Of Global Food Production?

One of the things I have remarked of on here quite often is the scientific bastardization of our food supply. Genetically modified foods. Industrial foods. The tampering of nature for profit. This researcher is a fool. He seemingly has no idea of what he does not know. In other words, his "scientific" conclusion of whether these transgenic trout are safe is that "they seem happy". Am I going mad? Seriously. Is this really happening? When will this stop? When a path of devastation is created in its wake?

If our food supply were properly labeled, no one would eat genetically modified grains, meats or anything else. That it is not labeled properly is because of legalized bribery of public officials aka lobbyists. The same dynamic that created Frankenfinance.

This is beyond frightening. Watch only if you have a strong stomach. Many of the comments are a frightening kinda way.
posted by TimingLogic at 10:03 AM links to this post

Florida Unemployment Hits New Record

posted by TimingLogic at 9:26 AM links to this post

Update On Private Equity's Scam And Wall Street Screwing Of Our States & Municipalities

I have an equally high disdain for the private equity crooks as I do Wall Street. It's part of the same cabal. We were a lone voice writing of the sham that is private equity and their coming doom when CNBC was pumping the brilliance of the con artists running many of these firms. Firms which used Wall Street backing to sack legitimate companies, load them up with debt, pay themselves billions of dollars then leave it up to the "free market" to collapse. Private equity has simply become a scam where Wall Street bankers go to pay themselves ridiculous salaries to steal from society and leave a wake of destruction in its path. Additionally, we have written about Wall Street's scams meant to defraud our cities, states, schools and the like.

How does any of this make your life better? Even remotely? Investment banks, private equity (or as we labeled it years ago, private debt) and Wall Street in its current form serve absolutely no constructive purpose to society.

None of this would have happened with a public banking system. Zero. Zilch. Nada.

Updates on both below.

posted by TimingLogic at 7:59 AM links to this post

Monday, March 29, 2010

Private For-Profit Monopoly Insurance Companies Already Start Gaming The New Health Insurance Law Passed By Our Corporatist Government

This party has only begun. With 2,700 pages, I know beyond a shadow of a doubt no one applauding the passage of this health insurance bill has any idea what they are talking about. They are simply political ideologists who are proud of their moment of beating Republicans. Of winning the political game. Of the idea that they finally passed some type of health care bill without truly understanding what the monster is that they have passed. They don't yet have any idea what the ramifications of this bill are. The law of unintended consequences now begins.

We'll see more of this crookery as time goes on. That's a guarantee. You cannot give the keys to the castle to an industry that has been empowered by our government to cheat, lie, steal and kill people and expect that they will somehow wake up and smell the roses of virtuous Pax Healthcaria.

Link here.
posted by TimingLogic at 12:36 PM links to this post

Sign Alan Grayson's "Medicare For All" Petition

For me, being an American is about an opportunity for some semblance of dignity regardless of education or political connections. That regardless of how smart or connected you are, that if you are willing to work hard, there is an opportunity for some type of dignified, self-determined existence which embraces the Rights of Man.

Basic human dignity is far more important to human needs than is the bastardized corporatist-crony capitalist American dream of slaving away for someone else, for whatever scraps you manage to accumulate. Then if you are lucky enough, have the bait dangled in front of you that you too could make a billion dollars. All ten of you. All it takes is hard work, a little luck and odds of being hit by lightning while sitting in your living room.

Those against health care reform use tactics which dehumanize the lack of dignity in the struggle of people who cannot afford health care or who have dutifully paid their premiums only to have insurance companies dump them when they actually need the insurance. To be one of the statistically 44,000 Americans a year who die because they lack of access to health care. Or the millions who go bankrupt every year due to catastrophic medical expenses. Dehumanization of these outcomes is necessary for the status quo's fear mongering to have any impact. For were all Americans to have to bear witness to Americans treated like cattle and even dying unnecessarily, it would clearly cause an outrage beyond words. To see the names, faces and stories behind this epidemic crisis would be the end of the status quo.

It is hard to watch this video and not have great compassion for those who struggle with death, fear, impossible choices and an inability to care for their loved ones due to a broken health care system. And to hear the personal health experiences Grayson had as a child. Asking a seven year old boy to deal with the dynamics of life and death due to lack of heatlh insurance is something no one should have to deal with in a country where CEOs make tens to hundreds of millions of dollars and where banks can make hundreds of billions of dollars in usurious, even criminal profits. Grayson talks about Republicans wishing to deregulate health insurance by allowing insurance companies to sell their products across state lines. To take away the state's right to regulate insurance and put it in the hands of Washington bureaucrats. Make no mistake, this is surely understood by the corporatist crooks in our federal political system. This idea is only being forwarded because it will line the pockets of Washington Republicans with more health insurance money. Just as they did with all of the credit default swaps and other Wall Street insurance products that should have be regulated by state insurance commissions but because of bribery of our federal government, they were excluded from state control and regulation.

If you want the buy your health insurance from CEOs granting themselves up to $500 million a year while they deny coverage to sick and dying Americans, that's your right. But, I would much rather have an option to buy into Medicare and actually pay for it myself so it has no impact on the federal budget. Medicare is a health plan that was devised for Americans before the corporatocracy completely took over our federal government and jammed this mandated private for-profit health insurance fraud down our throat. Medicare far from perfect but as someone who buys my own health insurance, I would much rather buy a Medicare policy. And for those who point the Medicare as a mess, well, maybe it is. But it's a mess which I have never heard a customer say they want to opt out of. It's sort of like the hocus pocus with Canadian national health care. We hear the horror stories but ask any Canadian if they want to trade it for the hellaciously ridiculous health care system we have in America.

More videos of people who wrote in to share their stories of unnecessary deaths. Deaths of people who are unable to afford basic health care at

posted by TimingLogic at 5:59 AM links to this post

Friday, March 26, 2010

Key Banking Committee Senator Corker Asks Wall Street To Stuff His Pockets While He Should Be Focusing On Finance Reform

posted by TimingLogic at 10:54 PM links to this post

Volatility Update - For The First Time In Over 200 Years Iceland's Eyjafjallajokull Is On Fire

"A human being is part of the whole called by us universe, a part limited in time and space. We experience ourselves, our thoughts and feelings as something separate from the rest. A kind of optical delusion of consciousness. This delusion is a kind of prison for us..........."
--Albert Einstein

Re one of our main themes of volatlity, this is a timely story. It's interesting on multiple accounts. First, for Iceland to be on fire means the awesome forces of the planet have likely been building for some time in the uppermost northern hemisphere including under the ice caps. (as well as elsewhere) Those forces invariably produce energy well beyond anything humankind could have cumulatively mustered over its entire existence. Have those building forces, invisible to the human conscience, been building for years? Have they played any role in the northern hemisphere ice melt so readily visible to the human conscience? Second, the last time Iceland's Eyjafjallajokull volcano was on fire, the author surmises the event may have helped cause the French Revolution.

Based on prior remarks on here, this blog would draw a similar but distinctly different conclusion. That is, the same forces that causes Iceland's last tectonic events were the same forces which precipitated the French Revolution. In other words, instead of Iceland's eruptions being the cause of chaos in Europe as the article's author remarks (a unique perspective in itself), it was more than likely the correlation of the forces causing the French Revolution and the Iceland eruptions that were significant. Forces beyond our conscience. Thirdly, to validate this point, many of the galactic events we are experiencing today are starting to line up with similar events from the late 1700s. A time when the world was also in chaos - as revolution and enlightenment swept from country to country sacking elitist thugs. Will history repeat itself? Are we due a wave of sacking? Well, we have written of that very distinct possibility for a long time.

How did humankind ever develop the mindset that the entire universe surrounding us was impacted by forces we clearly do not understand, yet we as humans are somehow immune from these forces? Is this truly irrefutable truth? Incontrovertible science? Are you absolutely certain the forces driving this global economic meltdown were man made? Or is it an optical delusion of consciousness? Most people certainly believe these forces are man made. Why? Because that is what they were told to believe. Well isn't it? It's the same reason why countless millions believe our President will be our savior. That all the American economy needed was to get rid of George Bush. Or why we seek spouses who supposedly complete us. Or why we identify our self-esteem and worth by what we do for a living. Or on and on and on. An optical delusion of consciousness. For what really is consciousness? It is the manifestation of the manufactured self or the ego. And the ego will do anything to avoid looking inside to find answers from our authentic self. Instead we seek answers we will never find from others. Enlightenment involves a realization that the only person who will make this world a better place is ourselves. The only person who will fix the economy is me. It is nothing more than a shattering of the ego and many of the beliefs associated with it. The status quo is doomed. Remember, volatility often is indicative of a change in trend. The world will never be like it was two years ago. Ever.

The cycle of volatility continues.
posted by TimingLogic at 9:27 AM links to this post

Thursday, March 25, 2010

Filed Document In States' Lawsuit Againt Mandated For-Profit Corporate Health Insurance

posted by TimingLogic at 2:03 PM links to this post

Unemployment (Underemployment) Hits New Record In Mid-March According To Gallup

posted by TimingLogic at 7:55 AM links to this post

Stephen Roach And Paul Krugman Are Boxing With Shadows In The Dark With Regards To China

As we have remarked before on here, Stephen Roach is one of our favorite economists. The surly man is often a good source of contrarian analysis in a world of Orwellian group think. But just as we have remarked with another favorite, Marc Faber, Roach missed much of this crisis.

In this recent interview, Roach again is completely wrong in his analysis of the United States and what needs to happen in our economy. His belief that the United States needs to raise its savings rate shows a complete misunderstanding of basic economics. This from one of our favorite surly men. (We like surly women on here too. Haha. )

The United States had the world's highest savings rate before the Great Depression. How'd that work out for you? 30% unemployment, 5,000 municipal bond defaults, 5,000+ bank failures, complete economic chaos and on and on and on. Today, China has one of the world's highest savings rates. Yet it is no coincidence we have remarked repeatedly that emerging markets, including China, with high savings rates are doomed. Continue to watch as the world unfolds. You'll witness history repeating itself firsthand.

Simplistically, from a macro perspective the U.S. economy today can cumulatively be compared to an unemployed individual. So, let me ask you. How many people do you know who are unemployed who are able to save their way to prosperity as Roach suggests? It's a defenseless position of ridiculous jabberwocky.

Savings are completely irrelevant to any discussion of economic recovery. Roach and Krugman (who Roach is actually arguing with in his defense of China's yuan policies) arguing about the yuan or what the United States should do to China is completely irrelevant. These two are in left field arguing about potato salad. Two economists boxing with shadows in the dark. But then, both of them missed this crisis, so why should we listen to their ideas on how to fix it? They still don't even know what the problem is.

Roach is indeed right on one point. The U.S. cannot dictate to another country how to manage their currency. This is indicative of the supreme arrogance of our federal government and its attempt to insert itself in the sovereignty and decision making of every country on earth. The hubris of American imperialism. In the end, the U.S. will eventually implement economic policies that make this matter moot.

posted by TimingLogic at 5:29 AM links to this post

Wednesday, March 24, 2010

GM's En-V Urban Concept

Some years ago we wrote on here that auto manufacturers need to start thinking in terms of being transportation companies and embrace alternative concepts beyond the traditional car. So, about a year ago GM announced a rudimentary Segway-based urban vehicle. Today, they announce a more refined version. This vehicle, while a concept for decades in the future, would sell today. And if GM and other traditional manufacturers don't fill this segment and others, someone else will. The bane of bureaucracy.

Manufacturers need to segment their markets to reach the latent demand of transportation products not met by mass produced automobiles. We pretty much still build automobiles the way Henry Ford built the Model T. ie, You can have every color you want as long as it is black. Today, that statement can be modified to state, you can have any form of transportation you want as long as it has four wheels and a steering wheel.

There is a very reasonable chance demand and manufacturing advances will usher in a new transportation industry with substantial numbers of new competitors in coming decades. Remember one of our posts regarding Wal-mart some years ago was that mass merchandising and mass production were in for a rude awakening as new manufacturing methods, quick change tools, new lower cost manufacturing techniques & technologies and personalization are being introduced into the market place. I no longer need $20 billion to create a transportation startup in the United States to compete with Ford and GM. These legacy business models, while still valid, no longer represent what is achievable with the latest technology. That statement includes both in manufacturing methods and with regards to end product.

Ultimately this type of dynamic will eventually kill the beast that is monopoly in all segments of the economy be it the federal government, banking, computers, mass retailing or whatnot. The only dynamic which is consistent is change. There was once a time when Kmart and Sears were both considered invincible. Wal-mart, as an example, will eventually join these has-beens as yesterday's news as we cited a few years ago. That doesn't mean Wal-mart is going to declare bankruptcy any time in the foreseeable future. If you want to read more on this dynamic, search on Wal-mart in the upper left-hand search box. I can't recall the name of the post right now but you will recognize it when you see it.

Story link here.
posted by TimingLogic at 11:12 AM links to this post

Repost Of Last Year's Remarks On Risks To The European Union And Germany Plus Some New Comments

As the Euro continues to trend lower, I want to repost a handful of remarks we made about a year ago on here. For those of you who can't remember a year ago, all was well on the European front. Or so we were told by the status quo. The EU central bankers were making public comments they had everything under control and were still rattling the saber of fighting the inflation ghost. EU bureaucrats were equally as arrogant often publicly showing disdain for those foolish Americans. Savants extraordinaire, eh? What we wrote at that time is exactly what is happening today. That is, the sovereignty of Germany is under attack by elitist bureaucrats trying to saddle the sovereign people of Germany with bailouts of other EU members. It appears the latest scheme involves those imperialist Americans at the IMF getting involved. Greece is just the tune up. When the world was in their mythical bubble, we wrote on here that the big problem for the EU was likely to be Spain. There is no way Germany and France can bail out Spain. Nor can the IMF. And if Spain seeks remediation, then Italy will more than likely follow at some point. Spain and Italy's GDP are almost as large as France and Germany. Almost. Don't get yourself in a tizzy over my generalization.

This drama is far from over. In fact, the Greece drama could continue on some level until the Euro zone addresses reality. In actuality, the Euro zone's problems are just beginning.

Repost of remarks from last spring in blue. Updated comments in black.

While Germany is a fundamentally sound economy, other than China, it is possibly the highest risk developed economy due to its extremely unbalanced domestic demand and an over-reliance on exports. A reliance that is triple the rate comparative to GDP of even the industrial exporting powerhouse, Japan. In other words, the Japanese economy is substantially more sustainable than Germany's. ( Some new remarks March 24, 2010. Many are all on this Japan collapse bandwagon today. Or hyperinflation coming to Japan. Forget it. It's a myth. Japan has problems but who doesn't? Future Zimbabwe money printing machine, economic collapse or currency collapse? Hardly. I still like the yen and the dollar - the two currencies which roared as this crisis started. We were the only source to identify these two currencies as our favorite "investments" while the rest of the world was deliriously levered up on Pax Globalia before the financial collapse. A time when the entire world would have chuckled at such a position. Not a lot of chuckling now. They got the yen and dollar trade wrong and they'll be wrong on Japan's collapse this time around. Well, actually they got just about everything wrong. So they'll get everything wrong this time around as well.)

Germany's reliance on industrial exports will cause substantially more economic pain than is being discussed today. Amongst many other reasons, Germany's relative position on the global supply chain guarantees it will experience very substantial impacts of the global crisis well after the initial credit effects are felt. Possibly semi-permanent effects. It will also experience greater negative consequences because of the Bullwhip Effect - a term coined in the last decade or so but an effect well understood by those in the supply-chain business for most of the twentieth century. Just not understood and appreciated by the money changers on Wall Street - one of many reason Wall Street has been completely caught off guard by the impacts of this cycle and remains in the dark about future prospects. It's also one reason why this liquidity-driven rally is not based in any form of economic reality. We have written of supply-chain shocks before but remember these effects applies not only to countries but to industrial companies, their equities & bonds and their suppliers. Two such suppliers that remains a Wall Street favorite are the energy business and the commodities bubble. Needless to say, I remain highly negative on both and expect a complete bust is very likely. Remember, many of these investments, including industrial commodities and energy, are being purchased and even propped up by excess liquidity in anticipation of a re-ignition of globalization. Most will have to witness the bust that will occur in order to believe it. All in due time. (March 24, 2010. Hold your horses. This stress is still coming to a Germany near you. That will make the EU dynamics even more unsustainable when larger EU nations come panhandling to the German people.)

Germany has the wherewithal to weather a substantial economic decline were that the only issue before it.
But at some point in time the demands placed on the people of Germany by the European Union and German bureaucrats will cross paths with the substantial collapse in global demand for Germany's economic output, its substantial ongoing costs of reunification and its highly leveraged social safety nets. This has not yet developed. It will. And, that means any calls for EU bailouts to be backed primarily by the balance sheets of France and Germany will clash against the sovereign needs of domestic economies. Therein lies a serious risk and future tipping point in the making. (Again, March 24, 2010 remarks. Ahem. Is this not exactly what is happening today? The EU and German bureaucrats are trying to pin the bailout on German citizens? Tyranny of no small order. Don't expect any bailouts to be too trustworthy if the EU continues down the road to ruin. The people of Germany will not sit back and allow the debt slaves to continually mound more burdens of bailing out other nations on their shoulders.)

The EU and German bureaucrats pushing EU unification are elitists who wish to return the people's sovereignty to the Europe of old where cronyism - lords - determine the fate of a feudal society through knuckle-dragging policies of rhetoric and tyranny. Maybe not consciously so in today's environment. But by implementing policies crafted to benefit a very few rather than by or for the sovereign of Germany or any other EU country. Unfortunately, this inbred elitism has never been vanquished from European culture. Oddly enough, this elitism remains a primary driver for the success of America as it has for the past three hundred years. Though now we also see this same level of cronyism building to a systemic level in Washington over the last handful of decades. Regardless, I'm quite confident the American people are going to take care business. And, I'm actually becoming more confident many in Europe are finally going to do the same.

Throw in the political concerns of sovereign countries yielding to demands by France or Germany or the EU in exchange for possible financial aid and you have a healthy brewing cauldron of future volatility. One that the European Central Bank and European Union arrogantly believes it has under control.
Of course, they also thought they had the situation well under control in, say, 1789. At that time it was also generally believed that it was good to be the king. As we enter the depths of a brave new world, is it once again good to be the king? Let's ask the EU leaders as this crisis gathers momentum. I suspect the answer is it "was" good to be the king.

(March 24, 2010 Is it still good to be the king? If so, not much longer.)
posted by TimingLogic at 5:29 AM links to this post

Tuesday, March 23, 2010

Al Gore - An Inconvenient Fraud?

posted by TimingLogic at 8:24 AM links to this post

Monday, March 22, 2010

63% Of Americans Polled Want All Of Congress Defeated This Fall

posted by TimingLogic at 2:30 PM links to this post

The Ultimate Expression Of Corporatism Or Fascism - The Orwellian State Becomes The Enforcement Agency For A Private Corporate Tax On Every American

"Others--as most legislators, politicians, lawyers, ministers, and office-holders--serve the state chiefly with their heads; and, as they rarely make any moral distinctions, they are as likely to serve the devil, without intending it, as God. A very few--as heroes, patriots, martyrs, reformers in the great sense, and men--serve the state with their consciences also, and so necessarily resist it for the most part; and they are commonly treated as enemies by it." - Henry David Thoreau

As Thoreau told us, unless one is an ideologue, this health insurance bill most surely qualifies as the tyranny of good intentions which have been negatively influenced by billions of dollars of legalized bribery of our public officials by corporations. The tyranny of good intentions by people who serve the state with their head rather than their conscience. Of those who seek personal gain or towing the political party line over moral clarity.

Sure there are some humanitarian aspects to this bill. Insurance companies cannot drop people from their policies which truly results in legalized murder in many cases and insurance companies cannot deny coverage which is also a morally-challenged position which often leads to death. These issues of morality should have been addressed by our government ages ago. A 2700 page bill was not required to fix these morally-bankrupt loopholes or to fix health insurance. (This is exclusively a health insurance bill. Our health care system is still not fixed.)

I am highly confident this bill will never stand in its current form by the 2014 implementation date. It will either be repealed or it will be amended substantially. I don't believe the vast majority of Americans, regardless of political beliefs, are going to appreciate a government mandate to buy private for-profit health insurance. It also does nothing to resolve the issue that tens of millions of Americans cannot afford health care insurance for the next four years. Then there are countless millions more who have health insurance in name only. In other words catastrophic policies which only provide coverage for near death experiences. I personally believe these are some of the greatest moral epidemics we face as a nation today.

Now I am not familiar with national health care in every country but I am aware of many. Is there any plan in the democratic world which requires people to line the pockets of for-profit health insurance corporations with a mandate by their government? I think not. Only in corporatist America do the corporations dominate our politics, economy and restrict our civil liberties so much that we are mandated to line the pockets of for-profit private health insurance corporations.

In closing, now is a good time to look back at our post of a year ago comparing President Obama to President Hoover. Remember, it was President Hoover who started the New Deal just as President Obama has. (Most Republican ideologues inaccurately assign the New Deal exclusively to Roosevelt. Most Democratic ideologues inaccurately applying a counter constructive argument assign the New Deal to Roosevelt as well.) Many of the aspects of the New Deal were meant to restore dignity to Americans who were similarly living under the yoke of corporatism post 1929 so they may have been noble in their pursuit but that's not the point. The point is politicians don't understand economics, cannot dictate economic mandates without unintended consequences and finally, history is clearly repeating itself. That is, a massive bear market rally also happened under Hoover. A large number of heretofore bears were also convinced the stock market bottom was in just as is the case today. And President Obama is following in the footsteps of Hoover with his new New Deal. A new New Deal shown with President Obama on the cover of Time magazine - often the kiss of doom. All of these dynamics happened before the Great Depression truly hit with full force. The environment was eerily similar to what we see today. In the end, these dynamics and many more contributed to the Great Depression. All will likely end today in disaster again today because our government will not address the real problems facing our economy or the problems which caused this crisis.

Not only can American avoid a protracted downturn, but it can thrive with the right policies. But ironically politicians won't address the real issues for the same reason they passed a corporatist health insurance mandate. That is, because just as was the case in 1930 our government is bought and paid for by special interests who seek to stop true transformation and reform from happening. So instead the American people get more tyranny shoved down our throat by politicians who understand nothing about economics, complex systems, unintended consequences of mandates and seemingly even less about democracy.

Remember, as we have stated literally dozens of times, there is no economic recovery without a new economic model. The way our economy is structured today, this health insurance mandate will contribute negatively to its demise. You must understand that insurance as an industry is nothing more than a tax on society. And in the early stages of a new depression, the federal government just jammed through a massive mandatory tax increase. Just as Hoover did before the Great Depression. Now I'm not opposed to higher taxes for universal access to affordable health care but this isn't it. And not when the economy is structurally broken. And I'm not opposed to taxing the uber rich who have achieved much of their wealth via fraud and transfer of wealth from the middle class or poor who were unable to defend themselves against a fraudulent corporatist political agenda. But these points are irrelevant. What we see is the tyranny of good intentions tainted by a corporatist political agenda. The same corporatist political agenda which has amounted to the massive wealth transfer over the last twenty years. The same corporatist agenda which has caused our collapse. There is no reason to believe this too will not fail just as have the other schemes. The best solution for health care reform is a new economic model.

For the ideologues on both sides of this debate, enjoy your moment of glory for it will more than likely not last. For the opponents to health care reform, the equally corporatist Republican party, you too should enjoy your moment of glory for it will not last. Being obstructionist for no benefit to society will not serve you well either. Talk is cheap. But what did you do while holding the Congress or the Presidency for the last thirty years other than contribute to the demise of our liberties, the deregulation of corporatism, the demise of our health care system and the ultimate trashing of our economy?

The world is unfolding exactly as we expect it to.
posted by TimingLogic at 12:01 PM links to this post

Some Reality Behind The Congressional Budget Office Forecasts For Health Care

posted by TimingLogic at 11:19 AM links to this post

Sunday, March 21, 2010

Constitutional Lawyer And Former Federal Judge - The Process By Which The Health Care Bill Is Being Passed Appears Unconstitutional

Article 1, Section 7 - The President may only sign a bill in the exact form that has passed both houses.

Very interesting article. I'm so disgusted with Washington's corporatist culture that I would like to see the Supreme Court declare Washington unconstitutional.
posted by TimingLogic at 4:42 PM links to this post

Saturday, March 20, 2010

At Least 37 States May Challenge Tyrannical For-Profit Health Insurance Mandate In The Courts

Once again, citings of Article 6 and federal law supremacy has constitutional limits. Something that clearly is not being reported when the media blabbers about federal law supremacy. The Constitution clearly identifies the states as having rights which cannot be trampled by unconstitutional federal law. And the powers of the federal government are clearly defined and limited in the Constitution. With regards to some powers, there are shades of grey in that limitation but that was by design. Federal supremacy is clear when we see examples of racists, kooks and zealots using State's Rights to trample on someone's Constitutional rights or civil liberties. Under this example, the federal government has a moral and Constitutional obligation to step in if states don't rectify the situation. The Constitution affords basic individual liberties to being an American -a federal supremacy responsibility.

Interpretation of case law, precedence, the Constitution and the like leaves the Constitutionality of a federally-mandated purchase of private for-profit health are as subjective in the courts. In other words, no one really knows exactly how the courts would rule. They can look at case law, precedence, past decisions by particular judges, etc and make educated guesses but judges are people prone to the same biases as everyone else. Remember, the Supreme Court at one time supported legalized slavery, supported a position that African Americans could never be citizens and countless other completely horrific anti-democratic and even criminal positions. In other words, the Supreme Court's decisions are often very subjective and can/should be challenged or overturned by the will of the people. (Something which clearly needs to be overturned with corporate personhood and the Supreme Court's asinine position of giving citizen rights to corporations - a position destroying democracy and our economy.)

Here's the reality of law in a democracy. It's often fluid. Many laws slowly change over time to reflect the mindset of society. Forty years ago laws allowed abhorrent racism. For God's sake, the most heinous of crimes, lynching, often went unpunished. Twenty years ago laws still allowed abhorrent inequality for gays and women. Today those biases may still exist in society but to a much lesser extent as reflected by current interpretation of law. The laws and the courts are continually moving towards more progressive views on Constitutional rights, civil rights, basic human dignities and equality because society is moving in that direction. In other words, the laws are changing to reflect the mindset of society as people make more informed decisions and rely less and less on those who have the microphone that spew small-minded positions of hatred and intolerance. This is also why Wall Street as we know it is finished. That is, exclusionary and even racist economic policies practiced by a morally-bankrupt banking system.

The federal government clearly has a right to involve itself in health care. I seriously doubt any Americans receiving Medicare want to "give it back" and go out to fight the tyrannical private for-profit health insurers. In other words, we already have government-run single payer health insurance for tens of millions of Americans. Those who argue the Constitution does not allow for government involvement in health care are morons who have never read the Constitution or fearmongering ideologues using terrorist tactics of hate or fear to manipulate people. That doesn't mean every single issue the federal government has a Constitutional right to should be undertaken by the government. There is a legitimate decision to disagree with government run or government mandated health care. I do know one thing. We don't need a 2,700 page health care bill. On the flip side, we also don't need private for-profit health insurance.

The issue is one of the constitutionality of federal mandates to purchase for-profit private health insurance. As is stated in the link below, this is a mandate to purchase a private for-profit product simply for breathing. Effectively, with a mandate to buy private for-profit health insurance, the federal government would become the legal enforcement arm of a private for-profit corporate tax on American citizens. Which, by the way, is also what we see with a for-profit military industrial complex. I believe the military industrial complex should be pubicly owned or not-for-profit as well. And for those who have a knee-jerk reaction to this statement, you might consider we would be under less pressure to engage in war after war after war were profits completely taken off the table. And I have seen some conservative think tanks consider a publicly-owned military industrial complex as a viable option. (Although I am not a fan of think tanks either.) Somehow profiting by killing people is very disconcerting when one philosophically considers this on an ethical plane.

Net, net is it's simply criminal in my estimation that public servants in Congress have access to the best health care in the world while tens of millions of Americans either have no insurance or live in fear of being dumped by the fraudulent insurance industry. It's criminal that public servants have the best health care in the world when people making $8 an hour with no health insurance are paying for public servant health care. And that Congress is being legally bribed to keep Americans from having the same health insurance as our servants is morally reprehensible. I don't care how the fix the health care system as long as the first consideration of its design point is one of moral clarity.

Link here.

posted by TimingLogic at 6:23 PM links to this post

Friday, March 19, 2010

Federal Reserve Loses Appeal - Show Me The Money

posted by TimingLogic at 3:21 PM links to this post

More NutJob Politics In Washington - Neoliberal Elites Seek To Pass Acts Of Terror Against American Citizens Into Law

For those of you who voted for Obama and wish to have your vote back, I'm not so sure it would have been served better by voting for John McCain. Seemingly McCain has lost his marbles. Or he never had any. Take your pick.

My point to providing a progressive and conservative link is that all Americans of differing political views need to come together in a realization that it isn't conservative Americans or progressive Americans who are the problem. The problem is the neoliberal ruling class in Washington regardless of party affiliation. Defending most anything that goes on in Washington is ridiculous. Only when the American people take back their federal government from neoliberal idiots, lobbyists and corporate influence can we confront issues facing our nation with moral clarity.

Once again, it's not right versus left. It's right versus wrong.
posted by TimingLogic at 11:09 AM links to this post

Republican Leaders Love Banking Lobbyists And Apparently Don't Want Real Financial Reform. Get Your Lobbyist Money In My Belly.

posted by TimingLogic at 9:52 AM links to this post

Thursday, March 18, 2010

General Ramblings About Markets And Another Possible Brick In The Wall Of A Stock Market Topping Process

The babbling financial commenteurs continue to remark that the individual is out of the market and that is bullish for stocks, bonds, commodities or whatnot. Well, that is wrong on so many counts. As we have noted numerous times, the individual has been out of this market for a decade. And that this environment is driven completely by finance professionals. ie, the Wall Street freak show. That the individual is out of this market is hardly constructive as is being portrayed by many on Wall Street. Those espousing this preposterous position rely too much on sentiment without understanding what sentiment really is or what fundamentals drive sentiment. Stock prices are not driven by sentiment but rather by demand. The dynamic of paying up for a price of a stock is also not driven by sentiment but by demand. Demand drives sentiment not the other way around. Wall Street was able to shovel all of that shit down investor's throats in the internet bubble scam because there was demand. Wall Street was able to shovel all of the toxic mortgages down investor's throats because there was demand. Wall Street was able to bamboozle investors into investing in commodities because there was demand. Wall Street has been able to levitate investment prices well above any type of sustainable valuation metric because of demand. All of these were driven by demand fueled by an ever increasing financial bubble not because of sentiment. Does anyone in finance or economics actually understand economics or for that matter simple demand dynamics of any type of market? This is a universally misunderstood dynamic. Remember, one of our major themes is that we are in the largest financial bubble the world has ever seen and it has been building for decades. That means underlying demand for financial instruments has been building for decades. That is why stock prices have remained overvalued for decades. Demand driven by a massive financial bubble. Any other explanation you read elsewhere - I don't care how capable the person is who is writing it or how many Nobel Prizes they own - is absolutely and completely wrong.

Remember when we wrote than sentiment was going to fail as an investment tool years before the financial markets collapsed? Guess what? It completely failed when all financial and commodity markets collapsed in 2008 and early 2009. It failed because there was a lack of demand. The lack of demand we would easily be able to anticipate if we understood fundamentals. We do. We did. Sentiment can become very negative yet prices keep falling due to a lack of demand. Just as sentiment can become bullish and stay bullish while prices shoot into the stratosphere. That is exactly what happened in 2008 and early 2009 when markets collapsed. No matter how bad sentiment got the market kept going lower because there was no demand. In other words, negative sentiment simply became more negative sentiment and fools who were rushing in were buried over and over again. We wrote as the market kept going down and people kept calling a bottom that they were all wrong. And indeed they were. There never would have been any demand until we reached some type of value point were the Federal Reserve not to open up the spigots of free money to speculators in early 2009. In other words, without the Federal Reserve opening the spigots to speculators, the market would have kept falling until stock prices reflected fundamentals. That would have been 200-450 on the S&P, which remains our downside target. Is it bullish that the individual is out of this market when considering demand? Hardly. Get your facts straight, understand monetary policy and economics and you'll never rely on this or the other types of endless rubbish perpetuated by Wall Street, financial commenteurs or market technicians.

It has probably been almost five years since we have talked about tick data. For the uninitiated, tick is the minimum upward or downward movement of a stock. Tick data simply measures how many stocks are hitting the bid in the market place. If the vast majority of stocks are closing on their up tick, then we know there are a lot of buyers be that program trading, speculators, hedge funds, mutual funds or whatnot. It's really not complicated at all. Just remember if stocks go up, the tick data rises. If stocks go down, the tick data falls. It's not really rocket science.

In this environment of incredibly low intraday volatility and very weak volume, I would say we can probably assume most of today's equity market buyers are very short term or very uncommitted to long term holdings. In other words, gamblers or speculators of some sort. Most likely much of this dynamic driven by the rise of the machines as in the Terminator movie. ie Computer trading. What a surprise.

Mark Cook, a professional trader who won some national trading competitions a few decades ago made tick data famous with some of his algorithms. But back in 2008 before financial markets crashed, we uniquely wrote "We are witnessing the true potential for some type of disaster....We have not seen this type of environment since the Great Depression." Around that time Mark Cook was calling for a new bull market. I think we see what tick data is capable of if not interpreted properly. If Cook held through the collapse, he probably is foraging for grubs in the city sewer system like Wall Street would be without taxpayer bailouts. Qualitative interpretations are most often more important than quantitative interpretations. In other words, there is little incontrovertible truth, even in science, and therefore the world truly is a very subjective place most often very open to the correct interpretation - something not taken into consideration by Wall Street's erroneous new quantitative finance savants. A perfect example is tick data. If Mark Cook and I were looking at the same data back in 2008 and he was calling a new bull market and I was calling for a possible collapse, then there was something wrong with someone's models or the qualitative interpretation of them or both. We see this dynamic at work again today with many financial savants claiming this crisis has passed and that stocks represent a great buy. Two massive lies. Why would we expect an accurate qualitative interpretation from the same yammering clowns who never saw the freight train coming down the track in the first place?

This brings up a timely point. The environment today is eerily similar to that of times past including 1987 and then in 2008 before financial markets collapsed. In 2007 and 2008 nearly everyone on Wall Street, and for that matter in society, thought the Federal Reserve was going to save the stock market, Wall Street, the economy, every other nation's economy, save Jesus Christ from persecution and save the Dalai Lama from the Chinese communists. My point is there is an incredible amount of lax behavior and ramped up risk-taking in all financial markets around the globe. All of this done by people proven to be completely financially illiterate and incompetent. The status quo and many bears now believe this perception of Federal Reserve free money will keep any future crises from developing or impacting financial markets.

We said the Fed couldn't save the economy before the collapse and I'll say it again. The Federal Reserve is not going to save the world from the next crisis. If life were so simple that a bureaucracy could impose it's will on nature or the economy or all of humanity, we could all just sit back in front of our favorite Orwellian television show and enjoy the leisurely life courtesy of the Federal Reserve. Why worry? Why work? Why not repent of our sins and turn our lives over to the Federal Reserve, our savior? Just watch our money multiply in financial markets while we get something for nothing in a new economic paradigm which includes no useful concept of work. Well, what most people still don't seem to understand is this has been our economic model for nearly two decades. If the world were so simple the Roman Empire would not have collapsed, the Soviet Union would still exist, we would have been able to avert the Great Depression and Nazi Germany never would have come to power in response to economic and banking calamities to name a few. There are many solutions to this crisis but none of them involve bailing out Wall Street, pushing money around for a living or listening to those who push money around for a living.

That no one thinks the market can collapse again or even retest old lows or make new lows shows a vast and substantial misunderstanding of the countless dynamics which drive financial markets and the scale of this crisis. It's so boringly rote and ignorant to claim the Federal Reserve is going to crank up the printing presses and that will save financial markets. First off, that's not how the Federal Reserve currently works, that's not how financial markets work and even were this the case, it's highly unlikely to happen since it has not happened yet. Such a move would damage the very markets and firms the Federal Reserve is trying to save. It may help you are me but it would not help the people benefiting from the status quo. And those are the people the Federal Reserve is concerned with saving.

We have already shown the volume cycle count algorithm being very overbought some weeks ago. This is another data point confirming this most recent rally off of the mild correction has resulted in an extreme amount of enthusiasm. I suspect we will look back and see some of that enthusiasm is hot money being repatriated into U.S. stocks as some in the financial community finally realize what we have been writing about for years. That is, emerging markets are in for what will likely be collapse after collapse after collapse.

Below is an algorithm calculated using tick data laid on top of the S&P for viewing purposes. We have now reached the second highest algorithm reading in the last twenty years. The highest reading is also shown on the chart right before the market collapse in 2008. Is this bad news? Well, that depends. We aren't making substantial new highs. The economy is not recovering. China is raising its banking reserve requirements, the economy is not throwing off any excess cash flow to fund more Wall Street Ponzi schemes, just about every measure of Wall Street bullish activity (not sentiment but actual activity) is off the charts, all of Wall Street is levered to the hilt again and the dollar is once again very strong. If you understand why the dollar is strong, you should be worried for that reason alone. And it isn't just because the yuan, ruble and most other currencies are terrible comparative to the dollar, although they most certainly are. It's because money is being sucked out of the global economy at an alarming rate. A very ominous eventuality for financial markets and global trade. Well, and Wall Street idiots. Oh, and all of this is happening without making a substantial new stock market high. I don't count 5 or 10 or even 50 S&P points higher than any prior high as anything other than a statistically insignificant event with so many incredible risks in the global economy.

On the below graphic the tick algorithm is in blue. In red, I have included upper and lower volatility bands which highlight statistical out-of-bound occurrences of this algorithm's movement. In other words, excessive readings to the upside and downside lie outside of the volatility bands. I personally wouldn't want to be jumping all over this market or any financial market for that matter. There are countless dynamics which could lead to a substantial correction, a new protracted down leg lasting months or even years or even a market collapse. While I don't see any of those as imminent (yet), the enthusiasm for financial stupidity remains at multi-decade highs. And I'll say it again. This market is more expensive than was the market in 1929, a statement we have made countless times over the last five years. Even though the market is now substantially lower than its peak, valuations are still well beyond 1929 and in fact are insane. Forget about price to earnings ratios. That is for yammering idiots like Jim Cramer. Remember, the price to earnings ratio went from 12 or whatever it was before the 2008 crash to over 100 after the crash. Price to earnings ratios are to be only used for toilet paper.

So let's look at another confirming data point of the tick algorithm. What I believe is possibly a rampant blow off in risky behavior contributing to the possibility of a building top. That is the Nasdaq Transportation Index or NTI. The NTI is far more representative of three dynamics versus the Dow Transports. One, it is much more representative of commerce specifically in the United States. And two, it is substantially more speculative being the companies are much smaller and riskier companies tied closely to the credit cycle and to economic activity. And three, unlike the Dow Transports, this index is actually representative of companies which are actually tied to industrial output.

Before this most recent rally which started a month or so ago, the NTI had not made any ground higher for ten months. That's right. It was at April of 2009 levels. So it had effectively seen less than a two month rally off of the March 2009 lows. This type of very, very, very low volatility moonshot higher we see in the index is indicative of massive speculation being all consumed by buyers. This dynamic has been now going on for well over a month in this and other speculative indices. That includes the general small cap indices. This is not a reflection of an earnings-driven recovery or any other fundamentals-driven dynamic any more than credit default swaps or any other Wall Street shenanigans reflect anything other than casino behavior. This rally is producing a 300% per annum return if it continues at that pace. That's preposterous. And it won't continue at this pace for a multitude of fundamental reasons. This is all a game involving the transfer of wealth from society to a handful of scamsters.

You might as well enjoy the scam because you are the mark.

posted by TimingLogic at 2:25 PM links to this post

Wednesday, March 17, 2010

Localization Takes Hold In A Repudiation Of Globalization And Big Business - Cities And States Tell Wall Street To Stick It

Okay as we have noted before on a few links, the Wall Street Journal plays tricks to get access to their web site. So, if I link directly to the Wall Street Journal's article, you have to pay to read it. But, if you find the article via a Google search, the whole article is available for free. There's obviously a business reason for this. That is to drive traffic to So, here's the deal. This link to the WSJ article is going to take you to a Google search. The WSJ article should be the first search result to come up and it should be titled Cities, States Tell Big Banks They'll Go Elsewhere. Click on the article link to then be taken to where you can read the article.
posted by TimingLogic at 11:56 AM links to this post

The Rallying Cry Of Resistance For State Lawmakers - Finally A "Neutral" State's Rights Article By The Mainstream Media

Let me make a quick update here. There is a Constitutional scholar who writes that Article 6 of the Constitution grants the federal government as the law of the land in any dispute with states. That may be true but the Constitution also states that "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

In other words, the federal government is limited in its powers and Article 6 is in reference to those powers. The federal government cannot simply decide to infringe on State's Rights with no Constitutional authority and claim Article 6. A rather misleading and incomplete quote in the article. But generally the article is neutral in its tone.
posted by TimingLogic at 10:42 AM links to this post

What The Greatest Con Artists Of Our Time Got Away With

posted by TimingLogic at 10:34 AM links to this post

Tuesday, March 16, 2010

Federal Government Transparency Goes From A Joke Under Bush To An Even Bigger Joke Under Obama

Link here.

I'm bored with all the secrets our overlords thrust upon what should be a democratic society. Apparently so are other Americans. This Letter of the Day at the Detroit Free Press pretty much sums it up. Here is a clip of that letter: FOIA(Freedom of Information Act) is obstructionist, and no different than any information outlet that fails to provide an open and honest accounting of activities and events that affect people. To control, edit or censor information is generally associated with dictatorial rule and should not be tolerated in a free and transparent society.

That sounds mildly familiar. It sounds like President Kennedy's speech on secrecy and how a democratic society cannot survive secrecy. One we have cited snippets of on here a few times. This dynamic is playing a major role in the destruction of our economy.

If "secrets" are a matter of national security, the government should have to get a temporary injunction from a federal judge or some other equally painful process to stop the flow of information until the national security issue passes. Withholding information from the the sovereign people is anti-democratic and bureaucrats should have to prove each and every case before a federal judge.
posted by TimingLogic at 6:56 PM links to this post

Call Your Congressperson And Demand A Public Option For Health Insurance

It looks like we are going to get a vote on health care reform quicker than I would have guessed some weeks ago. So, maybe I won't get my health care overhaul ideas up in time. We shall see. I will put them up though just to show you how absolutely absurd it is to believe political nitwits telling us this represents the best and only real options for health care reform. This plan has nothing to do with reform. It's really a mandated coverage bill. A gargantuan one at that.

That said, I haven't thought it through in any detail nor am I a Constitutional scholar but I have to wonder if the federal government, in particular, mandating the purchase of for-profit services has some issues with Constitutionality. This plan may end up being challenged in the courts. I am not thinking terribly clearly on this issue at the moment but I want to get this post up quickly.

If health care "reform" a term I use incredibly loosely, is going to pass or even has the chance of being passed in its current form yet this week, I believe Americans should have a chance to buy a not for profit health plan. That would be a Medicare-type plans.

So, if nothing else, if you agree, I would encourage you to call your Representative and Senator at (202) 224-3121. The switchboard will connect you. (Courtesy of Alan Grayson's advice.) And do it this week before a vote. I already called both of my representatives and told them I would work diligently to boot their asses out of office if they didn't include a public option. Well, I wasn't so crass. I didn't use that specific word but I clearly told them I would work to have them removed from office if they voted on any bill that did not include a public option.
posted by TimingLogic at 1:07 PM links to this post

Democracy Is Starting To Stretch Its Legs - Congresspersons Seek To Repeal NAFTA

"Diplomacy means all the wicked devices of the Old World, spheres of influence, balances of power, secret treaties, triple alliances........" -- Barbara Tuchman

"Peace, commerce, and honest friendship with all nations, entangling alliances with none." -- Thomas Jefferson

Fascism - A neoliberal authoritarian nationalistic political ideology seeking to organize a nation and its economy on corporatist ideals and values. Rule by special interests, corporate lobbyists and bankers.

Democracy - A political government carried out directly by the people or through their elected representatives. Rule by the people. The the sovereign of a nation. One citizen, one vote.

Do you help rule this country? Is your vote counted in equality to all other votes? Do your elected officials value your individual vote with the equality of lobbyists toting suitcases full of cash? Or special interests offering politicians riches after leaving office? Or do lobbyists, special interests, corporations and bankers have a greater say in determining the rule of law in this country? Many journalists willing to push the envelope are willing to use the word corporatist but let's be honest with ourselves - our nation has been and continues to be destroyed by corporate personhood.

Our economic ideology is determined not by market-based policies but by corporatist policies. And now these policies transcend not only economics but our personal liberties. While we are still a society of many freedoms, fascism in this country is indeed very real. That's a pretty tough statement for most people to swallow. And, therein lies the hope of a nation. The direction of this country is completely disturbing to the virtues of most Americans. Economic policy is determined not for what is best for democracy but what is best for special interests. Economic assistance since this crisis started has been directed towards corporate interests. Wars have become less about just causes and more influenced and even driven by corporate agendas and profits. Our regulatory structures benefit special interests over market-based merit and competition. Our food and drug safety benefits corporate interests over safety. Our banking system generally serves no useful purpose for the sovereign people of this country. Our health care debate is really focused on legislation benefiting corporate interests before citizens with a fascist government mandate that citizens must buy for-profit private corporate health insurance. Trade is conducted via secretive negotiations and agreements our founding fathers warned us about. Agreements which serve corporate interests over our sovereignty or the individual rights of a democracy.

The future is up to you. Do you plan to sit back and accept things as they are because the problems appear bigger than you? Or do you plan to participate in peaceful dissent and activism to take back your government? To vote out the corporatists. To demand your Congressperson work for you. To demand law changes supporting individual and national sovereignty. To overturn corporate personhood with a Constitutional amendment. To seek to upend Wall Street permanently. To reject corporatism by supporting local businesses and banks. To repudiate the greed of an elitist class by rejecting their self-serving view of America. In this defining moment of history, will you be remembered as part of a greater good?

This NAFTA bill won't see passage any time soon but it's more than likely to pass at some point in the future regardless of any chuckles this statement may garner today. Globalization is dead and rising national sovereignty is right on track.

This ties in nicely with our lengthy posts four years ago about the myth that American industrial businesses cannot compete - lies perpetrated by financial bureaucrats and self-serving special interests. Maybe now people will start to understand why I made my Detroit real estate comment years ago. ie, That were I to buy real estate any place in the world, it would be in Detroit. We made this statement when most everyone was a true believer in the development of emerging markets, America couldn't compete with emerging markets, real estate should be purchased in emerging markets and of course in California/Arizona/New York/Florida. (Detroit hasn't been part of any frenzy in decades other than the frenzy of economic decimation.)

Our Detroit call is beginning to show signs of prescience today. Why do I say that? Crazy you say? Detroit is a completely devastated community with no hope of recovery you say? Quit listening to financial opinionators and babbling idiots. If you still haven't put the pieces together with regards to my Detroit remarks, let me enlighten you to a few interesting tidbits not generally understood outside of Detroit. Definitely not understood on Wall Street where deceitful paper-pushing is the skill of choice. The Detroit metropolitan area may have the highest concentration of world class scientific, engineering and industrial talent focused on the essence of making things of any comparably sized metropolitan area in the world. The regional research university powerhouses across the midwestern states have the largest industrial research budgets in the United States. Ohio's universities actually hold the top distinction with Michigan not far behind. But Cleveland is right down the road from Detroit and I like Cleveland real estate too. :) (Kalyfornia, an industrial powerhouse as well, is obviously near the top of that research spending too but that great state has many structural impediments dissimilar to midwestern states.) The logistical dynamics of waterways, rail, interstate highways, geographic center of locality for production, shipping, etc, of the midwestern industrial states are without equal. Production capacity, eager state and local governments, educated workforces, industrial talent out the wazoo, an unmatched work ethic of middle America, well-developed industrial policy and industry-friendly regulations are in excess supply across midwestern states as well. So, now do you get the remarks regarding my pleasant affinity to Detroit real estate or do I need to actually blurt out the obvious?

Every single major economic theme that defines this blog since its inception is working out exactly as we said it would. Exactly. Gonna be lots of bagholders out there. Many of them very wealthy and most of them on Wall Street and in the financial community - another one of our themes. The great revolt against anti-democratic elitist neoliberalism continues.

Remember, as we wrote four years ago, as the Wall Street bubble implodes, the tremendous scientific talent misappropriated to that industry will rejoin the real economy and that will be long term bullish for America. The current economic ideology cannot be saved. All in due time.
posted by TimingLogic at 7:29 AM links to this post

Monday, March 15, 2010

Michael Lewis - Inside The Fraudulent Collapse Of Wall Street

For those of you who don't know Michael Lewis, he is the author of Liar's Poker. Taken from the opening lines of Amazon's editorial review of Liar's Poker, "As described by Lewis, liar's poker is a game played in idle moments by workers on Wall Street, the objective of which is to reward trickery and deceit. With this as a metaphor, Lewis describes his four years with the Wall Street firm Salomon Brothers, from his bizarre hiring through the training program to his years as a successful bond trader.".

That book was written to describe Lewis' experiences 25 years ago. Now, if you believe Lewis, and you should, our economy has been built on the thinking of complete economic idiots. And while I make many sardonic remarks on here using colorful adjectives, I use the word idiot in the literal sense. These are truly economic idiots running Wall Street. And the tens of billions they have spent buying our government has resulted in completely idiotic economic policy. So every economic decision that has negatively impacted you over the last 25 years where some idiot in Washington, the mainstream media or Wall Street has fed you endless pablum on how it was good for our economy was more than likely a result of legalized bribery and/or stupidity.

We linked to an excellent Michael Lewis article over at some time ago. (I still highly recommend it for its timeliness.) Now he is on 60 Minutes giving one of the most succinct and excellent interviews on Wall Street's endless stupidity. Lewis completely dismisses the prima facie view adopted by society and Wall Street's megalomaniacs that there is any brilliance associated with any of their endless deceits and maneuvers meant to defraud society.

These are the cretins that your tax dollars have bailed out. The crooks, the liars, the deceivers. It's very hard for me to believe thousands upon thousands of them should not be in prison right now. That includes most of the CEOs. But then since there is no rule of law, we'll likely never see a full accounting and responsibility. The state apparently wants to brush aside fraud and deceit. To chalk it up to unfortunate circumstances created by our morally pure Wall Street mobsters.

I don't want to idealize human nature but we would see none of this with public banking. None of it. We may see politicians seeking to spend more money than they should, but they would also be directly within the view of American voters who could directly remove them from office. Our current banking system is completely insulated from the rule of law, democracy and American voters. The outright fraud and complete misappropriation of capital in the economy to schemes, frauds, gambling, trading and derivatives to name a few, would never happen. Any deceits could and would be contained because the incentive to do so would comparatively be small for endless reasons. Not the least of which is public banking would pay public banker salaries.

posted by TimingLogic at 8:46 AM links to this post

Friday, March 12, 2010

State's Rights And State Banking - A Repudiation Of The Washington/Wall Street Fascist Corporatocracy. Kill The Beast That Is Wall Street.

There are many things to be excited about in the United States. Many. People who attempt to curve fit the past into the future are going to be sadly disappointed. People are remarking that it could take twenty years for the U.S. to get back to full employment. They are looking in the rear view mirror. They are limited by the lack of imagination that defined yesterday. They are showing their lack of creative thinking and understanding of what is truly wrong with the American economy. Creativity is the most important form of intelligence. And if the American people are enabled to become self-determined, they will prove all of these naysayers wrong.

I have remarked repeatedly that the U.S. economy would roar with the right policies. We could be back to near zero unemployment within five years. I haven't told you explicitly what policy decisions that would take or what fundamentals would be required but if you have been reading my blog since it's inception, I pretty much have told you indirectly exactly how that is possible with countless posts on a wide array of topics. I'm not ready to put it all together but needless to say we are far from a constructive outcome. Yet. We will more than likely have to see some type of collapse or incredible crisis first. As we have said before, I am not bullish on the future of America because I have faith in political idiots or because we have elected a brilliant Savior as President. Contrarily, I am bullish on America's future because I am bullish on the American people. This during a period of our existence that the media and Wall Street generally portrays Americans as uncompetitive, uneducated, unskilled, fat, dumb and lazy. This from the most incompetence and uneducated leaders in our history. A complete and utter lie.

We have written extensively on here about State's Rights. And not for the hell of it. There aren't any economists out there who have been writing about State's Rights over the last five years. Yet, it is an enormous dynamic in economics that is going to blind side the status quo.

The Nation just put up a piece on state banking. This is a prime example of States asserting their rights and sovereignty in a repudiation of the fraud in Washington and Wall Street. For every action, there is an equal but opposite reaction. As we have asserted countless times, public banking is the only legitimate form of democratic banking. Period. There is no plausible argument to the contrary. None. I can repudiate any argument put forth for private banking and democracy. Anyone who supports private banking is either an ideologue, uninformed, lacks an understanding of public banking or is putting capitalism before democracy. That last reason is why our economy is collapsing in the first place. And please don't tell me a public bureaucrat is not capable of being as good a banker as a private bureaucrat. Do you like your Medicare? Social Security? Your fire department? NASA? Our brilliant public scientific labs? Our State universities? If any bureaucrat, aka banker, was brilliant, they wouldn't be a banker. They would be part of the creative energy of society. The creative energy which drives society's wealth. Banking is a necessary, even potentially noble, but mundane business. A public banker is just as capable of guessing whether a business plan is viable and employing the same risk controls as a banker on Wall Street. A public banker is just as qualified to process a student loan application. Let's get real. This isn't rocket science. And if we have public labs employing rocket scientists doing brilliant work, we can sure as hell have a competent public banker.

This article doesn't describe the type of public banking system I would envision but it's a start. One brick at a time. We'll write about public banking in some detail at some point but for now this article will suffice as showing one of the great transformations taking place in America. There are many. They are all exciting.

The consequences of this action are absolutely incredible. If you think through this dynamic, every single piece of our economy would change forever. For the better. If every state creates it's own bank, Wall Street will never recover. Ever. And, that is as it should be. Wall Street's monopoly on capital in a democratic society can be classified as nothing short of tyranny. It breeds racism, lack of economic opportunity and perpetual underachievement for many capable people who are denied access to capital.

Long live democracy. The sooner Wall Street dies, the better.

Link here.
posted by TimingLogic at 10:02 AM links to this post

Update On Credit Default Swaps And The Great Wall Street Scam

It appears the European Union is attempting to ban CDS contracts. Let's dig into our past and pull up some text from our lengthy post titled "The Great Scam" - a lengthy look at the fraud that is Wall Street and specifically derivatives and other sources of income derived from asymmetric access to information. ie, Lack of transparency. Is anyone really surprised Goldman Sachs entered into a CDS contract with Greece where profits would be derived from the collapse of the country? The only thing that is surprising is that the American government is continuing to allow this fraud to exist. I have seen some ad hominen attacks on the EU for seeking to ban these instruments. You must be kidding. This is the morally bankrupt status quo trying to portray this type of legalized extortion as some type of free market issue or trade dispute by banning predatory financial products. What in God's name do these instruments do to benefit a democratic society? What new capital do they create? None. It's simply a way to prey on the misery of taxpayers often using taxpayer money. I think I would classify that as theft, if not legally then morally.

From The Great Scam, another self-fulfilling prophecy of the future. That would be Greece today:

I saw Jason Trennert comment one time on the ability to create a "run" on a company using CDS contracts. (Applicable to creating a run on Greece in this instance.) He said it was akin to taking out a life insurance policy on someone and then killing them to collect the policy. And, doing it legally. Unfriendly governments attempting to destabilize the U.S. or hedge funds raiding a targeted firm or Wall Street firms attempting to destabilize a competitor could possibly attempt to manipulate the CDS market. It is almost a surety that illegal activity in the CDS market has led to the demise or financial instability of at least one firm. But we don't know because no one knows anything about this market. It is completely deregulated. There were even rumors some of the recent panics created by the CDS market came from overseas locations friendly to terrorists. Legal shorting methods cannot cause insolvency. Illegal shorting coupled with manipulation of the CDS market does have the potential to literally destroy a firm that might otherwise survive. So, what does the SEC do? They leave the CDS market unregulated and ban legal short selling. I wonder what role lobbying played in these decisions.

The CDS market is just a sample of the concerted efforts at removing transparency from financial markets. Lack of transparency extends into nearly every financial market and has fueled remarkable and completely unsustainable profits for Wall Street. Profits that were often achieved at the expense of some legitimate concern be it a municipality, a homeowner, an individual investor, the taxpayer, governments and on and on and on. Even stock trading is being removed from public view. Lack of transparency is systemic and has no basis I can find except for criminal intent. Why? Because it fuels massive profits. Who cares if they are sustainable or even ethical.

One must understand an environment lacking in transparency to understand why firms would spend billions lobbying government and even more billions creating vehicles outside of the scope of transparency. These schemes present tremendous opportunity for profit by anyone who controls the flow of market information - that typically being a monopoly or someone able to distort market forces by subverting government oversight. In this case, that would be Wall Street who has monopoly access to capital. Restricted access to transparency creates an environment where manipulation and substantial profit is possible at the expense of any counter party be it individual investors, governments, businesses, school districts or anyone else partaking in the scam.

posted by TimingLogic at 9:22 AM links to this post

Thursday, March 11, 2010

Goldman Sachs Sucks The World Dry

posted by TimingLogic at 4:20 PM links to this post

Tuesday, March 09, 2010

Stupid Is As Stupid Does - Forrest Gump Running Public Pensions

posted by TimingLogic at 10:50 AM links to this post

Update On Our Theme Of Volatility, The Global Economy, Our Prior Post On Chaiten Atmospheric Energy Activity And The Recent Earthquakes In Chile

One of the major themes on this blog is that we are in a cycle of volatility. As part of that we have called more economic outcomes further in advance of them coming to pass than any blog, media source or economist I am aware of. (Even more outcomes we have talked about are still developing.) My point is the rest of this post isn't coming from some voodoo crackpot or Ouija board analysis. As part of that, people should learn to expand their mind to beyond what they read in the newspaper or learn in a history book. That includes learning to trust their inner self and their own intuitiveness of what is right and wrong, of what is true or not true.

As we have written numerous times, I believe there is ample anecdotal evidence that no distinction exists between the economic crisis we are now experiencing and much of the volatility we see in the world today. Two forms we have written of quite a few times are increased global strife and the volatility we see in nature. I have held off on talking about any detail behind these posts but I have had numerous posts highlighting volatility above and beyond economics. One is the Chilean Chaiten volcanic storms we posted on here eighteen months ago. The initial Chaiten eruption in early 2008 started within days of rally failure where the S&P 500 attempted to retake its all-time highs. From there the S&P started its decline into the eventual global economic collapse. Coincidence? Maybe. In our original post we noted natural energy disturbances possibly being associated with Chaiten's electrical storms and with tectonic activity in general. Now with recent tectonic activity in Chile, we see Chaiten sits atop the very plate borders involved in one of the most severe tectonic events on record. Are the atmospheric energy disturbances over Chaiten from 2008 related to today's tectonic events? In any event, the forces that shape our world, both from this planet and beyond, are far more than anything man could ever muster. The first Chilean earthquake actually shortened the day and tilted the earth's axis.

There is substantial reason to believe the world is not as it seems, and definitely not as humanity views it. That includes physical and metaphysical forces clearly not understood. Our inability to holistically determine and process the known and unknown interconnectedness of the world around us is is a major limitation of science in my estimation. And this lack of a holistic perspective perpetuates faulty educational programs and inaccurate conclusions both in and out of the realm of science. Which then in turn perpetuates even more inaccurate scientific conclusions across a wide area of study. In other words, a self-reinforcing dynamic of inaccurate conclusions that is likely leading many of our fundamental views of the universe further off track from ultimate truth. By conclusion, many of the generally held beliefs of much scientific theory are most likely either very incomplete or completely inaccurate. I don't care if that is the Big Bang theory, Natural Selection Theory, Global Warming (Not really a well-deserved position as a theory. More like a social movement interspersed with some rudimentary analysis not met with substantial scientific rigour.) or countless others theories of how the universe or our world really exists. So when media and political commenteurs come on television or in mainstream media print and attempt to marginalize scientific dissent through the same strong-arming tactics they use to run political parties, no one should listen. What particularly comes to mind are the true believers of human-induced global warming as an example - most of whom are broadcasters (mouth pieces for political idiots) or political idiots. Of course, that goes equally for the fear-pumping History Channel in their endless 2012 end-of-the-world fear campaign. These are just two examples.

The pursuit of truth is a wonderful ideal and without politic, group-think, ideology and ego, science is a most noble of human endeavors. But that doesn't mean any particular prevailing scientific theory void of these taints is based in incontrovertible truth. As we have said before, scientific theory is simply the limit of man's perceived knowledge at any given point in time. I don't take much of any scientific theory as proof of anything other than a plausible and hopefully rational observation in a best case analysis. One that will eventually be proven to be incomplete or even completely inaccurate. Yet we must always persevere and continue our quest for scientific truth and greater knowledge. A substantial part of that quest is to be open to completely new ideas and to merge seemingly completely disparate disciplines of science into more holistic views of the universe.

Humanity's base of irrefutable knowledge is very, very, very thin. Did I say very thin? (Wall Street's Frankenstein finance supposedly based on science is our most frequent reminder of this fact.) Yet today hubris defines science as our new god. And the true believers marginalize anyone with a modicum of sense or reason who may doubt their conclusions. Just as today's religious fanatics seek to attack those with differing views. Is there any difference between the two? Really? In our arrogance we often take theory for fact, have little respect for what we don't understand, for the world around us, for the enormity of the universe's impact on our existence or even intuitive or metaphysical perspectives often influenced by our unknown yet undeniable connection to an unknown universe. Scientific theory is continually portrayed as fact, often with a rabidly unreasoned fanaticism shared with religious zealots.

Our new, most popular scientist is Al Gore - a man who apparently has few reasoning skills given his countless outlandish scientific gaffes. What do you expect from someone who has no foundational experience in strong scientific principals and appears to have a limited intellectual inquisitiveness. Nor a healthy respect for intellectual or scientific debate but rather is interested only in furthering his ego-driven ideology. When have billions of people ever accurately anticipated the future of our planet re global warming? When has all of humanity been right? Especially when they have received most of that information from a bureaucrat with no understanding of rigorous scientific principals or the enormously unquantifiable gap between scientific theory and scientific fact. I think we call that ideology. Dogma. Brainwashing. This position is just as anti-science as the Luddite opinion of the anti-science religious fanatics and "conservative" (more accurately neoliberal) politically-motivated ideologues.

Volatility is a well-misunderstood phenomenon. One of the dynamics associated with volatility that is not well understood is its association with the creation of new paradigms. Put in simple terms, often volatility is accompanied by a change in trend. Something we have beaten like a drum on this blog. Something the status quo across a wide range of topics is completely oblivious to. So far.

Let's apply this to our countless expectations for a change in trend across a wide array of topics we have discussed. Some examples of volatility-based topics and the macro dynamics surrounding volatility we have discussed are:

-We are not in an economic recovery from a recession but instead in a global economic meltdown which is still metastasizing
-Global finance is dead
-Globalization is dead
-Wall Street's domination over our economy could very well be ending. Forever.
-The dollar would rise from the dead
-The U.S. would reassert itself with an economy that could rival its comparative GDP advantage not seen in fifty years.
-The Federal Reserve could and should print a fair amount of money to ameliorate this crisis. That they haven't exposes them as not having the people's or community bank's interests at heart. They are a special interest organization perpetuating fraud.
-Globalization will be replaced by localization
-The stream of high-demand mindless MBAs in finance produced by mindless universities would eventually find little demand in the market.
-Emerging markets heretofore considered to be economic miracles would collapse
-The S&P has a downside target of 200-450 before this crisis has passed
-Value stocks are in a massive bubble and will lead a market fall
-Large cap stocks, once considered safe havens, will ultimately prove to be some of the riskiest investments
-Interest rates will rise because of risk not inflation
-We are in the biggest financial bubble the world has ever seen
-All global wealth created since 2000 could very well disappear
-The Washington bubble will pop and State's Rights will rise to challenge the destruction of Federalism by a national corporatocracy run amok
-Global peace would be replaced by the potential for strife
-Unprecedented global wealth would be replaced by economic collapse
-Detroit would be the only real estate in the world I would buy (Add Cleveland, Buffalo and a few others in there as well.)
- The true believers in this economic model, the most wealthy, will disproportionately be impacted by the unwinding this cycle.
-The commodities boom would be replaced by a commodities bust
-Volatility would return to financial markets as the horror of Wall Street's inventions failed
-China's economic miracle would be replaced by economic bust
-The economic unwindings this cycle will not only impact banks but people, countries, governments, etc.
-Our complete repudiation the mythology that the US has lost its way and cannot compete in a global economy as perpetuated by the psycho-babble coming out of the bullshit economy aka Wall Street idiots and its financial no-think savants. An utter lie of massive proportions completely believed by the top 5-10% of wage earners in America.
-Peak oil would be replaced by an oil bust
-The federal government's hegemony would be replaced by local-influence in the dynamic of self-rule
-Great global demand for food being replaced with the potential for great global famine
-Those countries perceived to be immune to this crisis with large currency surpluses would turn out to be the biggest crises (eg China, Russia, Germany, emerging markets)
-The two-party monopoly in American politics would come under attack
-The lobbyist bubble would collapse
-A private banking system perpetuates racism, a class system and limits economic opportunity for a democratic society. We need is a public banking system.
-Global warming will more than likely turn out to be global cooling (a few years ago we highlighted scientists with this view who recognized the incomplete nature of weather models.) thus refuting the entire argument for global warming. (Until Al Gore curve fits some new climate theory onto a selective group of new data.).........Right now based on history and the work of many paleoclimatologists far more brilliant that mathematically-challenged Ag Gore, I would say it is a near certainty that the future will in fact be global cooling.

..........and on and on and on. The breadth and disparity of our volatility-based posts has been quite substantial. Most of our posts have been discussed for years and yet the majority still aren't on anyone's radar today. They will be. When it's too late. Just as we would expect it to be given human nature, regurgitated group-think and herd behavior which marginalizes dissent.

Of course, I didn't take these positions simply to be a contrarian or because I believe we are in a cycle of volatility. They were based on some substantial understanding of science, the understanding of the limits of scientific theory, the clear understanding that most economists are not scientists and hence their opinions are generally without scientific merit, the use of reasoning over ideology and the application of my own economic models - models that are based on sound science.

So, here's something to ponder on this fine Tuesday. Is the recent Chilean tectonic activity (and many other clustered tectonic events in the last few weeks in Taiwan, Haiti, Turkey and Japan.) and the unknown forces associated with this activity foretelling an imminent change in economic trend? Is this dynamic similar to the Chaiten storms and initial eruption that were possibly foretelling of a change in trend at the peak of 2008's global economic boom? (Commodities and many financial markets actually didn't peak until mid-2008.) Are we now close to entering the next phase of this crisis driven by dynamics that aren't even acknowledged let alone understood on rudimentary levels? Dynamics which affect humanity as well as our planet?

Remember, as we have cited often, I believe we are in the eye of the economic storm. And that the back end of the storm will decimate those who have convinced themselves the crisis has passed just as happened with the temporary stabilization post 1929. As we have cited, most of those convinced the 1929 crisis had passed were, in fact bears leading up to the 1929 crisis. Bears who were eventually devastated by calling an end to that crisis. And as we have also remarked, most winners on big bets, be it hedge funds or entrepreneurs are one-hit wonders. In other words, they are unable to replicate their success - a strong supporting position which will likely decimate true believers in the status quo and many bears who have turned bullish.

I believe the hurricane is more than appropriate to describe this crisis given the spiral, some would say Fibonacci spiral, (defining the hurricane pattern) is one of the most common recurring patterns of nature and the universe. And just as we know the metastasizing energy of the hurricane is most powerful on the back end, so too we have witnessed this similar pattern in prior economic crises. Why wouldn't economic crises potentially have similar characteristics to patterns in nature? Especially that of a storm given we are indeed in an economic storm. Are economic crises in fact natural phenomenon? Of course, human nature and human activity could be completely disconnected from the universe and the world around us. Our behavior, including economic behavior, could be completely random and without impact from the universe. Ahem. Not.

I didn't put up the first Chaiten post or this post just for grins and giggles but we shall watch how global financial markets unfold together.

Regardless, the cycle of volatility continues.
posted by TimingLogic at 9:29 AM links to this post