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The concern rippling through the financial markets is only incidentally to do with Greece. The Greek economy is very small relative to the global economy. A commenter called it “a rounding error”. The significance of the Greek debt crisis is the light it sheds on a bigger problem of European debt, which this diagram from the NYT illustrates.
That is the can of worms that is now opening up. Whether or not the sudden fall in the Dow Jones was exacerbated by a technical error should not obscure the main problem. The world has been living beyond its means. As Real Clear Markets explains:
Virtually every country in the EU spends more than it takes in and has made long-term fiscal promises to an aging work force that it can’t keep. A little over a year ago, economist Jagadeesh Gokhale, writing for the National Center for Policy Analysis, produced a pithy – and scary – summation of the fiscal challenges faced by Europe. Don’t read it if you have trouble sleeping.
“The average EU country,” he concluded, “would need to have more than four times (434%) its current annual gross domestic product in the bank today, earning interest at the government’s borrowing rate, in order to fund current policies indefinitely.”
In other words, Europe would have to have the equivalent of roughly $60 trillion in the bank today to fund its very general welfare benefits in the future. Of course, it doesn’t.
Things haven’t changed much since that study was done. So suppose they don’t put aside all that money. What then? By 2035, Gokhale reckons, the EU will need an average tax rate of 57% to pay for its lavish welfare state.
Today, Greece is only the tip of a very large iceberg. Portugal, Spain, Italy and Ireland together owe $3.9 trillion in short- and medium-term debts, an amount larger than their combined GDP, estimated last year at $3.3 trillion.
Only a realignment of spending with receipts can cure the patient. An analyst at the Economist exemplifies the problem European policymakers find themselves in. He argues that by refusing cut Greece loose they have made Portugal and Spain suspect. But they were also afraid that by cutting Greece loose they would make Portugal and Spain suspect. It’s a classic double bind.
This is the contradiction in the rescue plan. EU governments and the IMF refuse to discuss the possibility of an eventual rescheduling of Greek debt for fear that it would spark uncontrolled contagion. In fact, the logic may increasingly be the opposite. By refusing to admit that Greece faces an obvious solvency problem, whereas Spain, Portugal and Ireland do not, Europe’s policymakers have made it harder to draw a clear distinction between Greece and the rest. As a result contagion has intensified…
But Portugal and Spain are suspect — as well as many of the larger EU economies too. Their problems can be fixed to be sure. But they cannot be fixed by any kind of bridging loan, “put” or ‘shock and awe’ intervention. None of that will work in the long run. However things are stabilized in the short term, eventually a scaling down of the welfare state — and indeed the size of the Western state itself — will be necessary. There’s simply not enough money to sustain it. A wave of change, but not the kind of change that President Obama imagined, is following right behind the financial tsunamis. All of his ill-timed “investments”, like bloated Federal Health care, immigration “reform”, and cap-and-trade have come at a time when they simply can’t be borne. Institutions like featherbedded unions, monopolies and obsolete gatekeepers should view recent events in the same way that dinosaurs who looked up at an enormous descending meteor should. The enormous tower of quangos, EU commissions, massive agencies, vast entitlements is trembling beneath that most quotidian of assaults: lack of supply, “like a cut flower in a vase; fair to see yet doomed to die.”
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The fatal flaw of the scions of the Age of Idiocy is that they are too stupid to know they are not smarter than the markets, and can never be. Individual smartness at Goldman Sachs is almost certainly higher than 99% of anybody else’s in the population but the aggregate brain power within that other 99% dwarfs the collective wisdom of every Goldman Sachs look-a-like on earth by a cosmological measure.
While there is no doubt that the economic fundamentals of industrial civilization are dismal (e.g., peak energy, geriatric demography), IMO it is a mistake to attribute any particular day’s market action to events in the news, as per the broadcaster in New Zealand. Price action on, say, SPX has a particular set of dance steps to go through as price finds its various temporary equilibria. The most basic diagram of the steps that I use entirely expected the indices to fall to the intra-day low that was reached today, once the current dance had been defined by the two preceding days of decline and their monotonic character. Price could have reached that expected point precipitously, like today, or it could have used up a week getting there. There are reports that today’s collapse was caused by an erroneously large futures sell order by a bank trader. That rings truer to me than that the Greek crisis caused it. The Greeks are among the causes that the market is likely be significantly lower this time next year, but not likely the cause of today’s market behavior, nor certainly how far the market fell before it rebounded.
Today I bought insurance against the world going insane…
Ammo
All of the doom and gloom math inre pensions assumes that today’s retirement age must always remain the same.
When Social Security was crafted back in the Great Depression very few people were living long after 65.
Pre-OSHA, many a man left a widow due to job hazards.
Obviously, today current medical art and better nutrition have so extended the pension years that the retirement age simply must go up.
If that ONE adjustment is made, the VAST bulk of the government future spending nightmare just goes away.
It is in the nature of politics that such an obvious resolution to the multitude of troubles cannot be discussed.
The Missleading Stupid Media are exactly the same kids that stunk at arithmetic and higher math — like exponentials and statistics.
The Pols are right there with them: you must go a quite the distance to find a real brain in Congress. Most Pols are not just attorneys, they are failed attorneys.
They entered politics because they couldn’t build a practice, and stunk at hard, detailed work.
Instead, they were all arrogance and charm. (Sex,Lies and Video Tape — remember?)
——
As for the Second Law of Thermodynamics… They’d have to look it up in a book/ phone a professor.
Of course, the Second Law covers more than heat engines. It also describes the math of converting chaotic action into directed force. Which, after a fashion, is what politics is all about.
The political engine of today runs at the apparent efficiency of a classic steam engine of the 19th Century.
But in the MediaMind government intrusion occurs with God-like perfection — if not now — upon this latest and greatest reform.
Now there’s a mangled term!
Why don’t we call it change-up, after all, it’s just a fresh pitch with some English on it.
Ridgerunner…
A Fat Finger jammed the market down?
That’s some boo-boo.
Much more likely, to my mind, was HFT.
High Frequency Trading is trading on an algorithm at speeds beyond human reflex, let alone contemplation.
Once the HFT program was triggered — probably by another HFT attacking it — then it was a whipsaw killing.
We’ll probably be reading about some crippled hedge fund in the following days.
An alternate speculation would be that GS is gaming Congress and the Fed.
It is not just Europe. Or America. Japan, South Korea, and China all have the same problems:
1. Aging populations.
2. Too much spending needed to prop up internal economies.
3. Not enough productivity growth to make existing workers more productive.
4. Not enough internal consumption because people don’t make enough money.
China does not have outward social spending, but rest assured the Red Princes crony capitalism is every bit as State supported as that of Europe’s Quangos and the rest.
Point being — “you know who benefits from this” (apologies to Hugh Hewitt?) MUSLIMS! Because Islam depends only on conquest by raiding terror, no productivity, money, or anything else required. Merely ambush and tribal raids. Not even China will inherit.
It seems Osama was correct in diagnosing Western weakness after all. Not that a universal Caliphate is in the offing. The first four “rightful Caliphs” were all assassinated. As Osama did his own mentor.
What is @3, I’m thinking a Saiga 12 gauge might be the most useful single insurance policy, if a person had one only.
b@5: Much more likely, to my mind, was HFT. High Frequency Trading
Mark Fisher, a HFT trader, appeared on CNBC Fast Money today making that claim.
Although I prefer the GS explanation.
Am I the only one who, seeing his retirement investments sorely lag, employment prospects for his children diminish and the possibility of massive social unrest soar (even here is good old USofA), yet feels a new found hope growing in my bones? As if the medicine we have so sorely needed for so long is on the way?
And I don’t mean this in some smug ‘I told you so’ way. Quite the contrary. The part about my children is frightening. I have seven – with 5 grandkids. All are producers or still in school…one just back from second deployment in Iraq. It’s tough to contemplate what is heading our way. What I do is prepare to deal with it and hope it is not as difficult as I fear. My wife would have been a fine pioneer woman…has always done what is necessary. And, I believe my kids are of the same cloth. When the time comes we will circle the wagons in whatever fashion is needed and persevere. In America, for all its newfound shortcomings, the DNA of our forbears still exists and will be selected for once again to lead this country. Carry on.
b@4: If that ONE adjustment is made, the VAST bulk of the government future spending nightmare just goes away.
I’ve been saying as much. Obviously without the punch.
Since reaching that conclusion, I have heard numerous pols and analysts state – with no measurable equivocation – “ain’t gonna happen” and “not politically feasible”.
There it is.
Good Tea Party issue for 2010 and beyond.
“But Portugal and Spain are suspect — as well as many of the larger EU economies too. Their problems can be fixed to be sure. “
Not everyone agrees in that assessment, consider the following projections from the Swiss based Bank of International Settlements, often thought of as the central bankers’, central bank.
Government debt-to-GDP for Britain will be 94% in 2011 and rise 10% a year after that. Greece’s level will swell to 130%, Spain is set to rise to 74% and unemployment is currently at 20%. Portugal to 97% in the next two years, and Japan will end 2011 with a debt ratio of 204% and growing by 9% a year.
How Civilization Ends: http://www.economicnoise.com/2010/05/05/how-civilization-ends/
The politics of expectations and ‘long held beliefs’ is a consideration as well. A strong case can be made that neither Europe’s workers nor US workers will accept that there’s simply not enough money to support the socialist state that they believe to be their ‘right’.
They have been told all their lives that the greedy rich have all the money and are hoarding it. At the very least that would mean volcanic turmoil ala Greece.
Providing the Maxine Waters of the world the political cover to resist spending cuts. Her threat to nationalize the Oil Companies is just the tip of the iceberg. She and the left will demonize the ‘rich’ and demand confiscation of all their money before she’ll acquiesce to spending cuts.
Her inability to impose such a threat is immaterial, the point is that out of her beliefs, she and all the rest will block critical spending cuts. As even should the mid-terms be a complete victory for the Republicans, the left will retain the ability to block spending cuts. And as the numbers above illustrate, without spending cuts, the financial system’s collapse is certain.
Sovereign bankruptcy’s will follow with the dissolution of Europe, levels of economic turmoil never before seen in the US. While Russia and China look for any leverage useful in achieving long-term regional advantages.
Re the “bailout” of Greece: tonight on Fox one of the panel mentioned that, buried deep in a NYT story about the terms of the deal, was a requirement that Greece privatize its medical system. How about that!!!
G L @10 and b@4,
Raising the retirement age would be good economics. Cutting current pensions would not because it would increase the deflationary pressures. Better to maintain current pensioners’ incomes, but require work for the money.
Technical fixes will be necessary to manage the crisis at various points. There is nothing wrong with that. But ultimately the underlying defects in public policy have to be addressed. You cannot expect Central Bankers to fix what polity cannot. They have to operate within the givens the larger environment hand them. Even with the greatest financial geniuses in charge there is only so much they can do.
I think that the powers that be are focusing on financial solutions because they don’t want to focus on the hard choices which they cannot escape, although they will certainly try. But in the end the day comes and the most important role that reformers can play is to gather together a certain rational core so that when the bridge is reached the hard choices can be made intelligently, fairly and wisely.
rr@12: Raising the retirement age would be good economics. Cutting current pensions would not…
Too late. Those private sector (defined benefits) pensions that were dumped into the PBGC (Pension Benefit Guarantee Corp) after the businesses went belly-up from corporate mismanagement,t including underfunded pension plans, are now worth 10-20 cents on the dollar.
The ‘current pensions’ argument is fine. The practical reality is not so kind.
Comment #4:
Blert is a big ol’ meany who wants to throw Grandma into a sweatshop where she will have to work 20 hours a day for a can of catfood!
Wretchard:
I am sure someone here will correct me if I am wrong, but wasn’t the original social security retirment age set above the average life expectancy? I believe it was 65 before you got anything and most people were considered lucky to make it that far. (Remembering this was the age before modern medicine – plenty of people lived to be very old indeed, but on average not too many lived past 70 – and so could be counted on not to collect too much from the government.)
Now, if the age of collecting social security is raised (as I fully expect it will be) to 75 or perhaps even 80 that would indeed take a lot of the strain off the system – but only if people were not allowed to retire earlier and get partial payments. Of course, all this is predicated on the need for people to die and not burden the government. That being the case, why not encourage smoking, drinking and other life-shortening habits? Perhaps I should not be giving our political masters ideas.
“The average EU country,” he concluded, “would need to have more than four times (434%) its current annual gross domestic product in the bank today, earning interest at the government’s borrowing rate, in order to fund current policies indefinitely.”
In other words, Europe would have to have the equivalent of roughly $60 trillion in the bank today to fund its very general welfare benefits in the future. Of course, it doesn’t.
Gibberish.
That’s not how nations finance things.
There is no rational mechanism for anyone or anything on this planet to pay interest on $60t.
Just like (most) families, nations work, and their income has to exceed their outgo, or bad stuff happens.
pyramids, I think life expectancy at the time was just a year or three over 65. but since it was financed as a ponzi scheme, that’s the best they could do. one might argue that fifty years later, it’s not unreasonable if it should be expected to pay off customers for ten or fifteen years … unfortunately, we’re starting to exceed even that. maybe free cigarettes should be a SSN benefit!
The lesson of Greece is not that retirement ages are too low for everybody, but are ridiculously low for the government unions and their elected cohorts who join together to rape the public treasury.
The Germans are not going to work to 70 so that Greek union members can retire with full pay and benefits at 50 or 55. You can find the same pernicious sweet heart deals in other social-democratic countries in Europe and here in the USA in California and NY.
All the players knew there was a day of reckoning to come. The only thing they cared about was that it wouldn’t happen to them.
When people attain positions of power within a political system that allows them to rob the public treasury for their own benefit – they will. Always have. Always will. Obama-Pelosi-Reid are doing exactly the same thing here and will continue until they are stopped in 2010 or 2012.
blert @ 5 said:
“A Fat Finger jammed the market down?
That’s some boo-boo.
Much more likely, to my mind, was HFT.”
The Fat Finger story is an obvious MSM lie intended for the sheeple. Over at Zero Hedge, they’re saying that the Dollar/Yen spiked just before the S&P collapsed. The S&P collapse was triggered by HFT algorithms. Then in panic mode, the PPT poured in billions to pump up the S&P before the 10% circuit breakers were triggered. Today the curtain was briefly pulled back revealing the Wizard of Oz working his levers and turning his cranks.
$64,000 question: Does the PPT have enough green backs to defuse tomorrow’s panic?
blert @ 5 also said:
“An alternate speculation would be that GS is gaming Congress and the Fed.”
I would not be surprised that the previous week’s market declines were initiated by the squid to punish the political process over the civil fraud indictments. Essentially the squid was jerking its leash to reduce its out-of-court settlement costs.
Except for health reasons, move that retirement age on up now! I worked full-bore until I was 72.5 and would’ve gone even further but had already maxed out my return. In fact, if I’d continued my pension would’ve slipped slightly. Not much incentive to keep going, was it?
7. ridgerunner
What is @3, I’m thinking a Saiga 12 gauge might be the most useful single insurance policy, if a person had one only.
I am not an expert by any measure…
that is why I have mossberg 500′s, ar-15 and a couple of glocks…
diversify my insurance….
Arthur Laffer should be laughing. If the tax rate is raised to consume 57% of GDP then investment and productivity will decline. That will result in demands to raise the tax rates to retain the same income for the government. The wonderful concept of Bankruptcy, like the biblical Jubilee, was designed to ensure that the spiral of debt can not eat the future eternally. In order to prevent moral hazard some cost for profligate spending or fraudulent borrowing must be paid. Those are the three sides of the controls that prevent unlimited borrowing and debt that is not devoted to increased productivity for individuals or nations;
1. declining returns,
2. temporal relief,
3. reduced consumption.
What is needed is a defined limit on expected outcomes. Returns obtained from political activity are extracted from productive members of society. Those returns must not be allowed to exceed those that accrue from real work. The best way that I can see to do this is to establish what a minimal floor is and guarantee everyone who exceeds the average lifespan exactly that return and no more. For example, and I am completely pulling these numbers from thin air, if human life needs an intake of 500 calories per day with so many grams of protein then the government will deliver exactly that to each person over the average life expectancy. If a human needs 160 ft² of living space then that is what should be provided. Pensions for civil servants should be kept separate. Provide all benefits by marketable vouchers whose value are just under the individual tax exemption or value of the rebate if a “Fair Tax” system is adopted. That would effectively means test the delivery of these benefits.
Politicians have been thinking for years now that promising things they could not deliver was the way to get elected. I’d say they are at the bottom of the economic armageddon that faces many countries. You know, once your opponent starts promising the moon, what’s left to make your candidacy more appealing? Even GW Bush got caught up in trying to outpromise the Democrats on things like education and bank bailouts. It’s an ever-descending spiral and we’re all on the way down. F
Here is an article by Felix Salmon talking about today’s volatility: http://seekingalpha.com/article/203532-how-a-market-crashes
The amount of money involved with Greece may be a rounding error, but that and the larger disease Greece symptomizes has traders touchy. Fat finger or otherwise it is bound to get human traders going, not to mention the automated trading.
Blert @ 4: “Obviously, today current medical art and better nutrition have so extended the pension years that the retirement age simply must go up.”
Only problem with that — an official unemployment rate near 10% and a real un/under-employment rate around 20%. So what are all those 65+ year olds going to work at? Or are old guys going to have jobs while even more young people hang around at street corners?
Yes, the entire Social Security Ponzi scheme needs to be reworked. And the politicians responsible for it need to be tarred & feathered. But once the fun is over, we really need to start creating productive jobs again.
How do we create jobs? Roll back regulation. Add thousands of bureaucrats to the rolls of those seeking whatever work they can find. Greatly simplify taxation, which will add who knows how many accountants to the pool of jobseekers. Especially, encourage investment in productive assets. It would be very nasty in the short run, but in the long run, once the burden of excessive regulation is removed, real productive jobs would start to grow again.
Once we do all that, energy demand will start increasing again. (Much of the reduction in energy consumption per $ of GDP over the last couple of decades has been the flip side of exporting industry & jobs to China). We need to expand natural gas production to feed the new steel mills, and get serious about nuclear power. Then all those old workers could get nice jobs tending the flower beds at the local nuclear power plant.
The only problem the world faces is political. But it is hard to see how that nut gets cracked short of a real revolution.
Eggplant @20,
My personally-developed set of protocols for understanding stock index price action on scales from 5-minutes to years is based on the premise that the market is an organic being whose patterns of behavior are inherent. Just as the behavior of any vertebrate species can be broken down into fixed action patterns dependent on context. If persons/entities of immense power are manipulating the market, then they are doing so while using the same play book that I am; that is, they are timing their actions at the inherent strong and weak points that I see, and always doing it that way.
So, my choice is between believing that the market is an organic creature larger than anyone or believing that it is manipulated by the powerful in a way that makes it appear organic. It seems to me that to believe the latter is similar to the position of the creationists: that God made organic creation at one point in time but left millions of clues that organic evolution had done the job. Not a plausible position, by my lights, for either topic.
A couple of random thoughts- I think it’s a given that the Euro debt crisis won’t blow over, but will get worse before it gets better. If the economy collapses, people need a scapegoat. Who else but the Jews?
If anarchy spreads (the photo of rioters in Athens chasing police are just weird), eventually, folks will get tired of anarchy and want a strong man.
It’s deja vu all over again.
16. BattleofthePyramids
I’d be happy if they would just back the hell off from their efforts to “help” me, for my own good.
Jim in VA
that’s why I have mossberg 500’s, ar-15 and a couple of glocks…
b@105: Deals that have been presented as pure brokerage turn out to be an unprincipled hedge fund assault upon client capital….Government Sachs is RICO writ large. [emphasis added]
Succinct. And very well said.
Blankfein is getting good press – all things considered. So I wonder about carefully appointed cover.
Although I also take wretchard’s point:
w@13: I think that the powers that be are focusing on financial solutions because they don’t want to focus on the hard choices which they cannot escape, although they will certainly try.
Denial on both sides (who me? drinking in this bar?)
It has been interesting (of a piece) to watch the up-and-down of 2008 causation – government policy and CRA versus financial services and synthetic derivatives.
The tangled web of “hypercorporatism” provides ample cover for both antagonists in this post-modern morality play. The Tea Party movement has this tension at it’s core. So far it has not been fully articulated except in the sense of “anti-incumbency” and Noonan’s “The Big Alienation,” which some here viscerally reject in favor of a more partisan explication.
The big story – yet to be played – is whether the Middle Class can “deconstruct” crony capitalism. It’s a two-sided coin of the realm.
I think we can but it won’t be pretty – or for the faint of heart.
THE WRITING ON THE WALL
Yes there’s writing on the wall
It don’t bother me at all
I will sing and dance till dawn
For tomorrow I’ll be gone
Sipping wine and cutting roses for the table feast
Yes the sun will rise tomorrow though not in the East
Yes there’s writing on the wall
It don’t bother me at all
If it crashes let it burn
It’s all right, I’ve had my turn
Let the people who come after clean the stinking mess
I will dance and sing and sip my wine for I confess
I know there’s writing on the wall
And it don’t bother me at all
I see the writing on the wall
And it don’t bother me at all
I doubt the event was begun by a “fat fingered” trade or somesuch. It may very well have been an error, in that various high-frequency trading algorithms may have over-reacted. But thing is, this episode reveals that the tuners of these things are thinking they’re on the hairy edge. It seems they’ve got their “Katie bar the kitchen door” thresholds set on hair triggers?
Nothing has made much sense to me in this market for a while now, I can’t see how the fundamentals beneath it can support its currently overvalued position. These are perilous times!
I wonder how people today had stop-loss positions kick in and got taken to the cleaners. I hope it was nobody here, but rest assured, not a few innocents got wiped out today. Let’s hope for fewer of these kinds of days, although that’s probably a dim hope atm.
20. Eggplant said ” ….the PPT poured in billions”. What is the PPT?
blert, cowboy, … I (too) guess the low trades were no accident at all. just waiting for some fool to put in a market sell order, even tiny ones that competing high-speed systems put in as probes, then it’s a race as to who can cancel before acceptance.
Next federal reg: all publicly traded stocks must always move over an exchange. I have trouble seeing the legal or ethical justification for this, but I’m afraid a practical necessity may be all too clear.
Plunge Protection Team.
Though I prefer the Plunge Protection Posse.
A (mythical?) group of major financial houses and individuals in cahoots with the federal reserve, the illuminati, and the quadralateral commission.
33. Cowboy
See Karl Denninger’s Market Ticker for today.
32. Walt:
Yet another good one. I don’t know how you do it, but I continue to enjoy your work. Yes, I recognize it: Statler Brothers. Good job.
The Phils have been on a tear lately, huh?
I recommend to you all the book “This Time is Different” (http://www.amazon.com/This-Time-Different-Centuries-Financial/dp/0691142165/ref=sr_1_1?ie=UTF8&s=books&qid=1273201329&sr=8-1-spell) which makes the historical case that quasi-defaults on sovereign debt have been common in the last 8 centuries, and that many of these crises had the same warning signs as our current mess, but the smart people in charge truly believed that “This Time is Different”.
The most astounding thing I learned was that Newfoundland, currently a Canadian province, was an independent country for over 70 years until it got upside down on its debt in the 1920s. Britain said either default or join Canada.
#37 rickl
Are you another Phan of the Phightin’ Phils?
Sad about Robin Roberts’ passing, isn’t it?
37 rickl
Don’t know how I do it? Genius, dear boy, genius. As for Flowers On The Wall, I realized too late I had neglected to put up the YouTube link. So maybe I’m wrong about the genius thing. In fact, now that I think on it, the only genius I know is Charley Manuel.
Walt
I’m telling you a good crusade will cure Europe’s economic woes. Invade Saudi Arabia & Iran then sell their OIL to the Chinese. I call it the Two birds, one rock plan.
The Plunge Protection Team is the FRNY and JPM and GS…
Lesser players may be invoked.
——
For those so unsophisticated…
These players have access to market moving information beyond all others. Hence, they can corral the herd.
The herd at Wall Street and in The City…
#42 blert
One other point to add to yours. They are doing it on our dime. A recent, and I think inadvertent, disclosure about the books of Maiden Lane I and Maiden Lane II [the Limited Liability Corporations formed by the Federal Reserve Bank of NY to facilitate the merger of Bear Stearns and JP Morgan-Chase, and to support the purchase of AIG's real estate backed securities; respectively. There is also a Maiden Lane III that was formed to acquire non-real estate AIG securities.] show a less than statutory admixture of public and private funds. Of course, the rule of law does not apply to the Federal government in these degenerate days. These organizations are part of the funding and cut-outs for the PPT. FYI, “Maiden Lane” is the street behind the Federal Reserve Bank of NY whose street address is on Liberty Street.
Subotai Bahadur
jWarrior @34:
Incase blert’s explaination @42 was still more confusing;
FRNY = Federal Reserve of New York
JPM = J.P. Morgan
GS = Goldman Sachs
As for Josh’s quip about them being part of the illuminati…
I used to be convinced that was strictly for the aluminum foil hat crowd, but after 19 September 2009, I’m not so sure…
Maybe I need put on my aluminum foil hat, quick?
jWarrior @34:
Incase blert’s explaination @42 was still more confusing;
FRNY = Federal Reserve of New York
JPM = J.P. Morgan
GS = Goldman Sachs
As for Josh’s quip about them being part of the illuminati…
I used to be convinced that was strictly for the aluminum foil hat crowd, but after 18 September 2008, I’m not so sure…
Maybe I need put on my aluminum foil hat, quick?
It’s the mind control beams!!!
Where did I leave my aluminum foil cap?
….must concentrate……
Ahrghhh!
To understand what is happening in “Yurp”, imagine California being able to tax Arizona, Utah, Nevada,
Oregon, Washington and others in order to pay California debts.
Or imagine Fannie and Freddy foreclosing on YOUR house because somebody else defaulted on their mortage.
If the EU promptly (like yesterday) eliminates the ability of everybody to obligate everybody else, then they can work their way out of this jam. If they don’t, then the EU will vanish and the Euro along with it.
Exactly how, remains to be seen.
However, Pope John Paul II who was very astute geo-politically always believed that the blow-up would be in Europe and not the mid-east or elsewhere. Let us hope events do not make His Holiness look like a genius.
This looks a little too much like some fool thing in the Balkans coming back for a repeat performance.
Greece is on the headlines, but the Rubin/Emmanuel/Summers bailout of Puerto Rico hardly even registered:
http://dailyreckoning.com/7b-in-bank-failures-include-about-25-of-puerto-ricos-bank-assets/
This was timed perfectly with the move to get PR statehood and the Democrats 2 guaranteed senators.
The question is: Are the Yurps allowing or even promoting these non-stop Greek bankruptcy headlines, or is there some kind of a currency war going on in the background. My guess is the latter, and that this also ties back into gold price suppression.
I only laugh so that I don’t cry.
I entirely believe the crackpot idea that some secret group, call it the PPT, is using federal money to move stock prices. This has been done openly in other countries and markets, but has never been seriously discussed here – not openly.
I suspect 1,000 to 2,000 Dow points are entirely the product of such manipulation.
And I don’t wonder if there weren’t a lot of frantic phone calls among the participants during the Thursday market.
Bartender, aluminum foil for everyone, and get the babe at the end a pumpkin and some white mice, we’re going to the ball in style!
41 Rosinante: “a good crusade will cure Europe’s economic woes. ”
Sure, but for which God? The Pope doesn’t have the pull he did a thousand years ago, and Gaea won’t stand for a war for oil. Maybe we need to make Saudi Arabia safe fot solar panels?
The main result of the UK election has been to ensure that neither of the two major parties, both of which are left of center by American political standards, get an outright majority. There is some uncertainty about whether Nick Clegg can or be sincere about forming a coalition with the conservatives; and equally whether he can politically get away with forming an even more marginal coalition with Labor. Either way nothing remotely resembling a “conservative” program will be implemented in Britain.
But they’re probably not going to get around to any program, conservative or otherwise, unless a mindless shamble forward counts as a platform of government. The arithmetic implies gridlock and another election within a year when the whole thing falls apart.
In a way they are jostling for the right to sit in the electric chair. Even in the best of circumstances, a hung Parliament will result in finger pointing in all directions. But odds are that the next few months will be tough ones for Britain. A financial time bomb is ticking underfoot and when it blows, all the bets will be off. Only the sheer desire for office can overcome the reluctance that should come with taking over a foundering enterprise.
One of the things the election demonstrated is the tenacity of Labor. After 13 years of misery, the usual constituencies voted Labor again. It’s almost like Chicago. The Left is really a deeply rooted subculture, another country almost, which cannot be seriously dented by a mere electoral defeat. About the only thing that can make an impression on it is an upheaval, usually one of their own making, which winds up blasting them out of fashion for a generation. The real enemy of Marx has never been the Republican Party; it has always been Darwin.
I would be happy to see Gordon Brown connive his way back into Downing Street so that he can grasp the financial cherry bomb with both hands. About the only way you can defeat the Left is to give them what they want, then duck and batten down the hatch.
Wetchard@51 said: “The Left is really a deeply rooted subculture, another country almost, which cannot be seriously dented by a mere electoral defeat. About the only thing that can make an impression on it is an upheaval, usually one of their own making”
This describes the Greek Communists and Labor Unions who have participated in strikes that are not only crippling the economy and especially the vital tourist industry, but they have actually been a part of the manslaughter of 3 innocents. And yet they still feel no pressure to apologize or even acknowledge the misery they are inflicting on the population. This same callous disregard for the public interest is also on display in the actions of various public sector labor unions in the United States protesting the smallest threat to their yearly COLA increases or their job security.
IMO, this split between labor unions and grievance groups sanctioned by the progressives on one hand, and everyone else on the other is slowly tearing society apart. I can see it in my own attitude towards liberal family members and colleagues. This rift can only get larger as the pie shrinks, and this is a recipe for a conflict like the Spanish civil war.
I find it odd that the market turmoil was well known by overseas markets during the night and then at the end of the trading session in the US a huge load of sell orders flooded in and buyers vanished. That’s pretty interesting timing.
[WSJ]
Multiple stocks, ranging from Accenture PLC to Boston Beer Co., momentarily lost nearly 100% of their value, changing hands for just one penny. Exchange-traded funds, which are index funds that trade like stocks on exchanges, were also temporarily vaporized. The $9.5 billion iShares Russell 1000 Value Index Fund went from $59 to around 8 cents in the blink of an eye.
“It happened so quickly, it was like a torpedo,” said Scott Redler, chief strategic officer at T3 Capital Management, a hedge fund. “It was mayhem.”
http://tinyurl.com/23uw373
Bert and Rex have covered the PPT/Fed injection operation so I will not go into it. I will say in the olden days the Fed would tell GE Capital to buy and the fed would temporary reduce the capital requirements for GE Capital. The buys would be done by a legit company and market “temporarily” corrected.
Other posters have noted that the European Union with it’s single central bank is not only deeply in debt but is a single point of failure. That is not good.
US banks most likely have considerable exposure to the EU via debt and derivatives – as seen by the rapid decline in the banking sector during the fall. That’s dangerous.
Next, Social Security is a Ponzi scheme pure and simple and it is comming to a painfully slow death. It really is a wealth distribution mechanism. It’s not really an insurance fund. It has no “fund” to actually draw from. It needs to be fixed or tossed into bankruptcy (the people who unfairly gained from it should pay restitution).
Fannie Mae and Freddi are still fairly weak given the deflation in the housing market. Both are sensitive to inflation. With oil going to $77 per barrel and the possible of more red tape hampering off-shore drilling, the possibility of inflation is real – and really hurts mortgage lenders in all areas (plus home owners).
All of the above could have contributed to the melt down and Fed intervention but I am wondering if there is more.
For example, Strata Sphere squarely blaming the 0bama Administration for allowing both the Fort Hood and the would-be Times Square bomber Faisal Shahzad to slip through the Home Land Security net.
New York Traders clearly remember 9/11 and now have this new bombing attempt on their minds. The traders probably don’t like the idea of 0bama helping them into their graves – which is understandable. This is not helpful to a health stock market.
This make one go hum. Is it cumulative or an isolated incidence?
See Strata-sphere for degradation of Home land security:
http://strata-sphere.com/blog/index.php/archives/13292
wretchard
I do not know what you mean by saying that Darwin is the enemy of Marx. I see Darwinisim, the treatment of human beings as just another animal in the forest, as another pea in the pod with Marxism.
I think the entire Age of Idiocy can be traced directly to the intellectual developments of the 19th century, which for one reason or another, were the perfect storm of cultural transformation.
Wretchard writes:
“In a way they are jostling for the right to sit in the electric chair.”
Isn’t this what success by conservatives in 2010/12 portends, here in the US? The unwinding-of-pensions process must become gory, as the Dems, then hopefully as the minority, obstruct every effort to right things, screaming racial slurs and clamoring for social justice, instigating work slowdowns, sickouts and strikes by public employees at the local, state and federal agencies.
Land of Hope and Glory
If the Lib-Dems and Labour stitch together a coalition after both were repudiated in this election then they will ride into the maelstrom of fiscal, social, and strategic insolvency that the policies of the Left have advanced for decades. Why would they want it? Why shouldn’t we cheer them on to disaster? For two reasons in both the UK and the US.
First there is real damage done. Lives are blighted. People die. Assets are wasted and opportunities lost.
Second are the systemic changes imposed to ensure future control by the Left, despite their record of disaster. In America that will include immigration reform and Puerto Rican statehood. In the UK that will take the form of “Electoral Reform.” The replacement of the First Past the Post system will lead to Proportional Representation. It may be done incrementally but that will be the price for Lib-Dem support in a coalition. That will permanently cripple the Westminister system and ensure that the radical fringes will grow at the expense of the moderates.
If the Tories get to form a government and promise, and then deliver, a referendum on the EU they can set the stage for a clear majority in a follow on election within a year. They may need to spin off Scotland but the revival that they could oversee if extricated from the EU debacle might make that unnecessary. Can the Conservatives get the support now to force Brown and Clegg out of Downing Street?
PB @54,
The definition of Darwinism in your appositive is absurd. Darwinism was and is the explanation of organic diversity via evolution powered by natural selection. Darwin was a humane person of the highest order. What you should be complaining about is “scientism,” the belief that there is nothing other than what science can discover. That derives as much from physics and from the success of technology as from the discoveries of Darwinism and the Modern Synthesis.
Scientism link http://en.wikipedia.org/wiki/Scientism
Modern Synthesis link http://en.wikipedia.org/wiki/Modern_synthesis
Life of Mind #23:
“That will result in demands to raise the tax rates to retain the same income for the government.”
It already is happening. Increases in fuel prices have led to vehicles with higher gas mileage becoming more popular. That has led to a decrease in gasoline sales, and since the taxes on gasoline are per gallon, some politicians are calling for an increase in gasoline taxes to keep the revenues up.
By the time someone is 65 they should not have to work, SS, pension or not. They should have made investments over their life that will support them, whether it is buying a house, owning a business, putting money in the stock market, or simply saving a lot of cash. Or depending on their children to take care of them. The objection to privatizing SS is that everyone knows that at age 18 a man will choose a car over retirement investments, at 30 will choose a boat over investments, at 40 will choose a big screen TV, at 50 a trip to Europe, and so on. And they seem to get away with it. Not everyone can put away a lot of money, but far too few people even seem to try.
And one reason they do not try is that the tax system is designed to punish those who do try. The Democrats seem to be enraged over the idea that some people would not have to pay taxes on a $2000 a year to put in an IRA. Oh come on! $2000 a year! Do they think that Bill Gates and Warren Buffet salivate over that amount?
ridgerunner @57
I beg to differ. Darwinism is a metaphysical explanation and extension of Charles Darwin’s observations.
PB@59
Metaphysical explanation of what?? I provided links to support my assertion. Please provide evidence to support your allusion.
The two basic theories behind the collapse, “Fat Finger” and HST . . . I humbly submit are both incorrect . . . I suggest the “Golden Finger Scenario” . . . that being what we saw was a test . . . only a test . . . we were witness to the “test” of the first “implosion” experiment. There is a clandestine hacker, perhaps even a government, that has the virtual nuclear bomb and there will come a time when it is used . . . after all are we not in an economical war?
I’ll call it social Darwinism if it makes you feel better.
Tallgrass
What is an “economical war?” Is that a war done on the cheap? Just call it an economic war with occasional kinetic episodes. Your point about government sponsored *cough SCO cough* hackers is correct but this is not the first such test.
RWE
You lost my definite article.
Precision and accuracy always make me feel better. As I’ve noted before here, I feel that any conservative who reflexively rejects evolution because its home is in academia is making a mistake because evolutionary psychology provides plenty of evidence for the imperfectibility of man. The Age of Idiocy is based on would-be tyrants selling their real, self-aggrandizing agenda disguised in an argument for equality and perfectibility, to paraphrase Camus.
Leftofthemind . . . sorry about my typo . . . I meant to say what you correctly stated.
A good term “kinetic episode” . . . and I accept that this is not the first such test . . . there are many attempts every day I would suspect . . . but the “secret weapon” must be tested and if successful . . . will be kept secret until such most effective time to use it. The most effective secret weapon is the one that the defense has no defense for and no way to retaliate, even though they may be aware that it exists.
LOTM @ 56: “If the Lib-Dems and Labour stitch together a coalition after both were repudiated in this election”
Repudiated? Repudiated? According to figures reported by the BBC, Labour & Lib-Dem together got 52% of the votes. The Conservatives were “repudiated” by getting only 36%. If we believe in majority rule, then a Labour/Lib-Dem coalition has more right to rule than those minority Conservatives. Especially since there is only one significant policy difference between Labour and Lib-Dem — reforming the broken electoral system in the UK, which this time round gave the Conservatives far more seats than they earned, and the Lib-Dems far less.
It is fairly clear that Lib-Dems will make priority reform of the UK’s gerrymandered electoral system the price for any coalition with anyone.
#41 Rosinante
uh if a invasion of oil lands was a certain sign of gaining richnesses, then you should be Cresus, and you still aren’t !
me think, like “global warming” failed because of the Chinese, “global government” is another face of the design, some “generous” organisations want us becoming serfs like the Chinese, and that is rejoicing IFM and BIS, for their pockets are going to be filled
The problem is that our politicians are all corrupted or too weak, they are bought by big money organisations or prisonners of them. What we need is warriors like leaders to clean the Augias Stalls, like De Gaulle, Churchill, Roosevelt… that assume their responsabilities, and don’t let the bankers diktate our policies. De Gaulle said “La politique ne se décide pas à la Corbeille” means that policy ought not to be decided at the stock exchange.
So, “politicians with nuts are wanted” !
looks like we have one, probably the only one that refused the bailing out of Greece in our parlement, saying that the solution is that Greece, France… should leave the eurozone, which is a shema to catastrophe.
see what he says in this video (sorry in french)
http://www.debout-la-republique.fr/Sortons-de-l-euro.html
uh the video is here
http://www.dailymotion.com/video/xd6w3v_crise-greque-interview-de-nda-a-l-a_news
“Only problem with that — an official unemployment rate near 10% and a real un/under-employment rate around 20%. So what are all those 65+ year olds going to work at? Or are old guys going to have jobs while even more young people hang around at street corners?” This is why reading Fareed Zakaria’s claims that we all need to calm down, since we can simply raise the retirement age to 70+ and presto solve the Medicare/Social Security insolvency plus all our other crises rings hollow. The tin foil hat wearers are gaining credibility precisely because the happy Establishmentarians from David Brooks to Paul Krugman (he who thinks the Government isn’t spending and borrowing ENOUGH to dig us out of this hole) look so ridiculous.
PB and Ridgerunner:
Interesting side discussion – sounds like you got it worked out…
Made me think of the eminently decent man Jacob Bronowski and what he had to say on the topic, among other things (it’s worth a look):
http://www.youtube.com/watch?v=8mIfatdNqBA
#41 Rosinante . . .
You wrote: “I’m telling you a good crusade will cure Europe’s economic woes. Invade Saudi Arabia & Iran then sell their OIL to the Chinese. I call it the Two birds, one rock plan.”
I don’t know if you were kidding or not, but that’s been my plan ever since 9/11. I call my plan “neocolonialism,” and I think it’s a good plan.
In addition to taking over the oil, I think we should send Christian missionaries to convert the Muslims to Christianity. In Iran, we could also encourage the Iranians to restore their ancient religion, which had a huge moral component, unlike the craziness of Islam.
In any case, I hope my ideas will take root. We and the Chinese can divide up the oilfields in an equitable manner. There is no reason for us to be enemies with China.
So that’s my neocolonialist plan, and if it takes hold, I’ll reveal my real name, and it can be called the __________ Plan.
Wretchard @ 51 said:
“The real enemy of Marx has never been the Republican Party; it has always been Darwin.”
What is interesting is that the Right (some of whom claim not to believe in evolution) do everything possible to make it work.
The Left (who claim to believe in evolution) do everything they can to keep it from working.
Promethea,
Ann Coulter, is that you?
My plan remains to enforce that there can be no compulsion in religion. Any parent should be able to advocate any religious belief, but not resort to force against any child over 15 years old. That age limit would avoid unnecessary side issues. There must be no penalty for apostasy. Just enforcing that, and we should have insisted and enforced that as the price to be paid for forcing us to bring our troops into countries, would draw the teeth from Islam. Once it was safe for Missionaries from all faiths, Catholic, Protestant, an Arab Nestorian revival, Jewish, Buddhist, Zoroastrian, Socialist, Atheist, etc, to come and go freely the aura of invincibility, which is a form of inertia, would fall from Islam.
Langley @73
The left has done plenty to make evolution work by subsidizing the reproduction of low intelligence, low energy individuals. Those traits will propagate well under any welfare system. Natural selection works both by survival selection and by selection on fecundity.
The SNP selling themselves to Labour is bad. The Tories have 306. That should be enough to form a government with the minor parties backing on votes of confidence. If they deal with the Lib-Dems they lose. If they deliver a referendum on the EU they win a general election. Why is this hard for Cameron to see?
I think the comment that Darwinism is the enemy of Marxism implies that even in the realm of economics/political structures it is survival of the fittest. Capitalism/Democracy eats Socialism/Tyranny’s (ie Marxism) lunch every single day of the week. Darwinism is the enemy of Marxism because it shows what an utter failure it is against the competing social-economic model.
75. ridgerunner
Yes.
Langley #73:
Evolution from amino acids into single celled organisms and so forth is one thing.
Natural selection relative to already existing organisms is quite another.
The curious thing about the Left is that they profess to believe that all that we see came from evolution but they think that Natural Selection should not be allowed to apply to socialist economies, unions, and so forth.
MX@70: So what are all those 65+ year olds going to work at?
That’s a different question – one that should be raised and one that is being raised by the current market volatility vis a vis the class warfare erupting in Greece between workers and government.
Where is the growth coming from to support the equity markets? Once this question is answered (and it will be), then the question of what to do with us old geezers solves itself.
Given – a big given – that corporate management is willing to entertain a not so subtle change in mindset that acknowledges (1) the value of investing and working towards long-term objectives that require short-term sacrifice on the quarterly balance sheets and provided they can pull this off without the GS raiders making at pit stop first, and (2) the experiential value inherent in older employees who seldom require disciplinary treatment or a whole lot of training (please no anecdotal stories about grandpa snoozing during the client meeting). Value is not solely a function of age but age is often a critical determinant of value. And I’ll leave that there as another subject that needs more treatment than I can give now.
RWE@58: By the time someone is 65 they should not have to work, SS, pension or not.
Just as not everyone should “have to” own a house. That is a statement of social policy that, in the hands of government, becomes a “weapon of mass destruction.” But private “should’s, would’s and could’s” do not argue either for or against modifying the current SS structure.
Speaking of which, before the public debate ignites into a “Death Panel” version, a sliding scale can be implemented to reduce the pain on near-retiree’s and put the burden on younger people.
RWE@58: Not everyone can put away a lot of money, but far too few people even seem to try. … And one reason they do not try is that the tax system is designed to punish those who do try.
In part. The real issue is human nature and responsibility as both impact The Commons. Neither political party has a particularly good answer to that age-old problem. The social engineering of progressives is imploding in front of our eyes. The social vacuum of the Republicans is not much better.
The fundamental point still stands: SS can be transformed into a sliding scale of timed benefits – with means testing – that slashes the deficit and still preserves some civilized treatment for retirees who need it.
Have a look here:
http://blogs.the-american-interest.com/wrm/2010/05/07/its-a-crisis-of-faith-not-a-crisis-of-stocks/
Two things. The first involves the stock market melt-down yesterday. Whether it was caused by the officially sanctioned explanation of a “fat finger” mistyping on a computer terminal to trigger “High Frequency Trading” computer algorithms, or by either more nefarious or more fundamental causes that pulled the HFT trigger; the market went full bore Chiroptera feces, and was out of control.
I am not an investor. Two reasons for that. One, I am too poor and two, I acknowledge that everybody else in the game knows a lot more than I do about complexities I cannot comprehend. That would make me what is technically termed “the mark” in this game. For anything more complex than buying a share at a set price and hoping it goes up; I understand Stephen Hawkings’ popularized explanations of Quantum Theory a lot better than I do ‘long’, ‘short’, ‘put’, ‘calls’, and derivatives of all sorts.
Admitting my ignorance, I still watch the markets broadly because they influence and sometimes control policy and politics. We have already mentioned the Plunge Protection Team [which incidentally goes back to the first Bush, I believe]. The game is partially rigged already with that. Right now, until it reaches the point where it cannot be forestalled; politically it is inconvenient for the administration to allow the market to go down. Which explains how the market has kept edging up in the face of reality. Wall Street traders were not the only ones taking delivery of cases of Depends yesterday.
One of several sites I watch is called Zerohedge. It has the normal range of writers in the business; albeit it has more on the bearish side than most, and I find that they are generally the ones who can bring real world facts and not jargon into the discussion.
One item that has come up repeatedly today is that individuals, smaller investors, and brokerage houses outside the big 5 firms that have made up most of the trading volume for the last several months were blocked out from trades during the fiasco. Computer and financial channel feeds of the market were also disrupted to a great extent, blocking non-connected investors from access to the market.
It may be that the system just could not take the strain, or it may be that it is a feature and not a bug. I don’t know. But it seems that even assuming the best case scenario, if you ain’t connected to the right people; if the market goes stupid y’all are scrod. You are not going to be able to make trades until after you are wiped out. One interesting thing. In at least some cases, margin calls were running up to date during the meltdown. I seem to remember inability to pay off margin calls having something to do with a problem in 1929.
One of the writers there also did a piece on the nature of HFT algorithms, asserting that even in the best of times they are rigged to cheat the small investor. I offer it here for your consideration.
http://tinyurl.com/2ahc7ck
Make of it what you will. Personally, if I could afford to invest right now, I would not be buying anything I could not hold in my hand and protect with 7.62 mm NATO. But then again, I operate under the presumption that even paranoids [like me] have enemies.
Second, the Brit election. While I agree with Wretchard about the leaders of the Brit parties fighting for command of the TITANIC after it stopped to take on ice; there is another factor that aggravates it.
I have been watching the Brit press pretty closely for the election, and there are severe problems.
1) their equivalent of absentee ballots for Brits overseas have been screwed up badly. They are blaming the Icelandic volcano for the inability to get ballots in by the deadline to be counted.
2) their military absentee ballots have somehow not made it back home in time to be counted. Given that most of HM Forces [especially the SAS and Royal Marines] would crawl over ground glass to vote against Brown, this has an impact even with the miniscule size of their military.
3) the process of voting in Britain was a cross between Monty Python and the Three Stooges. The turnout was so high that people stood in line for hours, literally tens of thousands had the doors shut in their faces before they could vote. It happened all over Britain. The police had to be summoned to control irate crowds. It seems that “swing” constituencies which would determine which party would control Parliament are most affected.
That means that either the Brit courts [which end with the Labour controlled Parliament, or Brit bureaucrats appointed by Labour will have to finally determine the winners of those seats. You think "hanging chads" were bad, how about refusing to allow people to enter the polls and vote? Brit papers are openly calling it a "Banana Republic" election.
When the scone with clotted cream hits the Pukka fan; not only will Britain have an incompetent and unstable government [regardless of how they put a coalition government together], it will quite possibly not be regarded by a large segment of the population as having been legitimately elected and of being in power without consent of the governed.
Mr. Cromwell, Mr. Oliver Cromwell. Please pick up the white courtesy phone at Westminister.
Subotai Bahadur
When the Brits have been straightened out, we need to have Mr. Cromwell over to this side of the pond for an extended visit to inspire and supervise general house cleaning and other chores…
Geeze Louise #80:
I have assumed for many years now that SS will not be there when I am due to get it because at a minumum means testing will be applied.
But realize that this simply constitutes another lifelong tax on those who have some degree of personal responsibility and foresight. If means testing is imposed, then at a minimum an equivalent amount of taxes should be forgiven for those whose benefits are given to people who did not earn it.
And people who do get SS should get two checks. One marked SS for their actual benefits and one labled “Senior Welfare” for the part they never earned.
And also, the all too common practice of providing disbaility benefits and free medical care to young people who are too fat or too drugged up to work should be eliminated completley .
Obama says that people who earn money from investments should not get a “free ride” and should have their investment income taxed additionally to pay into Social Security. This, of course, ignores the fact that they paid SS taxes when they earned the money they invested.
LOTM @ 76 asked: “Why is this hard for Cameron to see?”
Because, gentle reader, David Cameron is not very bright. Think of Tony Blair without the intelligence or the charisma. Or Barack Obama without the interesting life history.
Don’t worry, Dangerous Dave intends to do something serious about the most urgent problem facing bankrupt Britain — Reducing its Carbon Footprint.
Well, only 1 Brit voter in 3 voted for Cameron’s watered-down soup of Right-of-Left-of-Left-of-Center nonsense. Maybe in Brit-Land that constitutes a mandate?
27. ridgerunner
So, my choice is between believing that the market is an organic creature larger than anyone or believing that it is manipulated by the powerful in a way that makes it appear organic. It seems to me that to believe the latter is similar to the position of the creationists: that God made organic creation at one point in time but left millions of clues that organic evolution had done the job. Not a plausible position, by my lights, for either topic.
…….
This is a restatement of a very old argument that reoccurs in many forms
Is God sovereign or does man have free will.
The answer is that both are true God is sovereign and Man has free will.
However, there is tension between the two.
It has been the tension between the two that has been the source of the dynamism of western civilization.
#84. RWE
That is really the political dynamic of our time. What is a “free ride” is the first question. And the second is, not whether they should be abolished, but rather who should have them.
Sad, but IMHO, true.
Josh @ 49 said:
“I entirely believe the crackpot idea that some secret group, call it the PPT, is using federal money to move stock prices. This has been done openly in other countries and markets, but has never been seriously discussed here – not openly. I suspect 1,000 to 2,000 Dow points are entirely the product of such manipulation.”
Years ago in another life, I managed a supercomputing facility at an Australian university. The machine that I ran was a two headed Cray-YMP (completely obsolete by modern standards). The Cray technicians who maintained my machine also maintained all of the other Cray mainframes in Australia. From those Cray technicians I found out that the biggest supercomputer in Australia was a four headed Cray-YMP owned by the Australian Ministry of Defence. Upon hearing this my immediate reaction was to ask whether the Australians were quietly running a nuke program (Cray-YMPs were primarily designed to do nukes and cryptography). The answer surprised me: Australia has or had no nuclear weapons program, instead they were managing a fully functioning economic warfare capability. What this entails is a potential adversary’s economic system is precisely modelled and weak-links are identified, e.g. single point failure opportunities in their electric power grid, bridges accessing significant economic resources, critical reservoirs, etc. The idea was that in the event of war, a small special ops team could knock out these weak links and bring an adversary to its knees with no obvious connection to Australia. Important point: all of this occurred over 15 years ago with computer technology that was orders-of-magnitude weaker than what is commercially available today. George Soros could easily construct a private economic warfare capability that is a 100 times more capable than what Australia was running 15 years ago. Of course, the United States almost certainly has such a capability that would be run at the national labs on the big nuclear weapon’s computer clusters. These are huge Beowulf clusters typically built around thousands of AMD Opteron and Intel Xeons. I do not doubt for a moment that the United States government has the economic modeling capability enabling it to engage in massive financial market manipulation. If anything, there is probably a cyberwar going on today where the Europeans, Russians, Chinese and Americans are trying to manipulate each other’s economic systems for maximum political advantage. The PPT must exist. America’s national security interests requires that the PPT exits. We saw the PPT go into action yesterday to prevent an all out market collapse.
RWE @ 79 said:
“The curious thing about the Left is that they profess to believe that all that we see came from evolution but they think that Natural Selection should not be allowed to apply to socialist economies, unions, and so forth.”
The Left would sincerely argue that their political/economic system was the end-point of Darwinian natural selection. Those Leftists who believe in religion might even argue that God created the universe with the intent that something like Marxist-Leninism would eventually crawl out of the woodwork. The argument follows that when you oppose socialism, you are opposing the trend and force of history/providence. Of course, the irony is that socialism appears to be a dead end fork in the road of human social development. Intelligent people started to figure that out in the 1930s when it became clear that the Soviet Union was not working out as planned. Europe’s current economic problems represents another “whack of the clue stick” indicating that socialist systems tend to self-destruct.
Excuse me for the addendum to comment #87 above, but actually the two questions cannot be separated. It is not a question of the chicken or the egg. First we determine who is to get the free ride, and then we change the definitions so that the ones getting them aren’t and the ones picking up the tab are.
The logical fallacy of equivocation used to be considered the mark of a dishonest or less than capable mind. Today it seems to be the primary characteristic of those who call themselves “statesmen.”
One does not have to be James Jesus Angleton to see that Mr. Soros, while he appears to be an individual, has become a kind of network node for all sorts of interests. The steel baron Vladimir Lisin is presently the richest man in Russia, according to Forbes magazine. Who did he buy his largest steel mill from? You guessed it, George Soros. How did Soros manage to hang on to a steel mill as a foreign investor in Russia’s vicious metal wars of the 1990s, of which Oleg Deripaska is one of the survivors? How did he acquire it for a song? Nobody knows. He may have seen his opportunities and took em’, or acquiring assets dirt cheap in privatizations might have been payment for services rendered to governments prior.
Soros funded the foundations that were active in Bulgaria before the Wall came down, indeed throughout the Eastern Bloc. He funded, if you believe Wikipedia, the first Internet connection between the USA and USSR way back in 1984. So perhaps Soros was a loyal servant of Uncle Sam, or at least played a major part as a conduit, along with our old friends those National Endowments for Democracy (what one D.C. lawyer sarcastically calls the ‘Demintern’) and International Republican Institute, USAID, the usual ‘legends’ – with the WaPost and WSJ loyal to the end, even if the former institution passes away.
My question is, what has George been up to and what geopolitical goals has he been serving since the USSR disappeared? They would at first glance appear to be his own, since even Ukraine and Georgia had attractive assets to acquire on the cheap when he bought their governments with Yuschenko and Saakashvili respectively. But now things are getting messier, there is more competition from the Russians and Chinese for the assets, more peasantry in revolt from the U.S. to Greece, all the pieces on the board are being reshuffled.
The Chinese are launching their own English language channel, pretty soon someone’s going to go on their programs and claim Google is not being kicked out of the Middle Kingdom because it’s taking on the Chinese state, but because it’s an arm of the U.S. government. Want to spread all kinds of crazy stories about the Russian and Chinese leadership through the usual propaganda channels? Right back at ya, Uncle Sam! I don’t think anyone sees what is happening. But it’s pretty clear if in the past Washington manipulated certain outcomes to bring about the geopolitical goals its elites wanted, said manipulation can come back on their heads. Or if not theirs, then ours as citizens.
What’s been happening over the last week with the equity markets is interesting. The hallmark of the PPT is the markets go up on bad news in low volume. Typically the PPT pumps money into trash stock to push up the overall averages. Robotrader over at Zero Hedge likes to do the forensics about how the PPT does its thing. However lately the markets have been going down on low volume. Has the PPT run out of money or has legitimate market forces overwhelmed the PPT? Of course the PPT would be anticipating market behavior for many months in the future using their advanced economic models (perhaps this is some sort of weird nonlinear phenomena). Maybe the financial situation has become so pathological that their macroeconomic models are breaking down?
Eggplant @ 88: yeah well I think what we are seeing is what happens when such programs have bugs.
This chart pattern is horribly ugly. I see the PPT 1,000 points melting away, and crazed arguments in the back room about what it will take to restore them, and if it should be done, and out of who’s pocket. Of course the answer to that last part is, my pocket, and yours.
#4 Actually, just raising the Social Security retirement age won’t do the trick in our current situation. We’ll also need to raise each worker’s SS contribution percentage, as well as reduce promised future payouts. The fundamental problem is demographics. Too many people coming to retirement age with fewer and fewer workers contributing. Ponzi schemes will always collapse because they eventually run out of people to feed the scheme (see Bernie Madoff). The retirement trend in business switched quite some time ago from “defined benefit” to “defined contribution” because the defined benefits could not be supported actuarially. Social Security should be a defined contribution system but that wouldn’t lend itself to the redistribution found in the current system.
Josh @ 93 said:
“This chart pattern is horribly ugly. I see the PPT 1,000 points melting away, and crazed arguments in the back room about what it will take to restore them, and if it should be done, and out of who’s pocket. Of course the answer to that last part is, my pocket, and yours.”
Technical analysis assumes an efficient market. The PPT through manipulation removes market efficiency thus making technical analysis invalid. In March 2009, I believed in the PPT but I also believed that the best medicine for the world economy was to default on bad debt and force the TBTF banks and government entities into bankruptcy. Consequently, I shorted the market and had my pants pulled down.
It appears that someone told the PPT not to enable financial market healing. Why? That’s the real mystery. My fear is the macroeconomic models signalled checkmate and there was nothing the PPT could do to save the economic system. They then opted for Plan-B which was to simply delay eventual financial collapse (allow the major players to cut-and-run) rather than attempt at preventing it.
Eggplant @88:
The technicians were feeding you a bad cover story. The Cray and its twins were used for this:
http://en.wikipedia.org/wiki/Pine_Gap
http://en.wikipedia.org/wiki/UK-USA_Security_Agreement
The replacements are still there, chugging away, and the information processed is used for much, much more than guiding national economic strategy.
Re: #13: “You cannot expect Central Bankers to fix what polity cannot. They have to operate within the givens the larger environment hand them. Even with the greatest financial geniuses in charge there is only so much they can do.”
It is a very serious error to regard polity as an exogenous variable, when in fact it is the central bankers who shape the “larger environment” and control the politicians (today, we learn they even control Bernie Sanders, the supposed socialist). They are responsible, through the destruction of Constitutional money, for the very making making the “larger environment”.
Jefferson and Jackson foresaw it all.
I used Darwin in the sense of the Darwin awards. But whether you believe in evolution or not, consider the related concept of conformity [my term], which is at least the first cousin of notions of intelligent design. We are fitted to the universe. Any thought process or physical form which does not correlate with the way the world works is at a disadvantage. There may once have been people who thought things fell upward or that lions were sweet and cuddly, but those individuals have since fallen to their deaths or become lunch and have left the genetic pool.
You are a Child of the Universe, no less than the trees and stars, you are bound to its nature. The authors of the declaration understood this. Marx thought he knew better and invented his Laws of History driven of course, by his ideas. It determined events. The problem is, it did not.
The Left’s biggest problem, one which it cannot solve with any amount of protesting, rallying, or propaganda, is that it’s ideas are not conformed with reality. Some politician in the Philippines was once told that the cause of high prices was the Law of Supply and Demand. He retorted with a straight face that if he were elected he would propose it’s repeal. The politician was an uneducated populist. But there are any number of academics, some of them at Ivy League institutions, who will say the same in more clever terms.
Something for nothing. The repeal of the laws of thermodynamics. A denial of the conservation of matter and energy. God may be able to create something from nothing, as in the Big Bang, but no Leftist god, so far as we can tell, can top it.
What the Left can do in the short term is create the illusion of something for nothing by income transfers, selling off the savings of past generations, juggling the books. But it’s a cheap conjurer’s trick, not a real miracle. Illinois failed to resolve its pension shortfalls yesterday. The Dems wanted to raise taxes, the Republicans refused. Finally, one person suggested that they simply pay the pension checks from principal, not interest. Problem solved, right? Well, for now.
So when I assert that Marx is checkmated by Darwin, what I mean is that Marxists are almost always better at spin and politics than mere working stiffs, but they are almost always worse at actually doing anything. They win the battle of the spin, but they lose the war with reality. Ultimately the worst enemy of the Left is itself. This is literally true. Show me a revolution and I’ll show you a bunch of guys who will jail each other six months after attaining power. But more to the point, Leftism is it’s own cure. Give them Germans and Koreans and Chinese they’ll reduce them to penury. That’s a miracle in its own right. Midas could turn base metals into bold. The Left performs the even the greater wonder of reversing the process.
Armageddon Rex @ 96:
Pine Gap is just a satellite tracking station and gets way too much attention from the Australian Left. Even an old obsolete Cray-YMP would be too powerful (and uneconomical) for reducing tracking data. The only national security applications that would make sense for a 4 headed Cray-YMP would be nukes, code-busting and economic warfare. I believe the story that the Australians were not doing nukes so that leaves code-busting and economic warfare.
RWE@58: Not everyone can put away a lot of money, but far too few people even seem to try. … And one reason they do not try is that the tax system is designed to punish those who do try.
Another reason RWE: regulatory excesses have pushed the cost of living through the roof, while depressing income particularly in those fields that are not related in someway to guvmint largesse.
Saving is much more difficult that it used to be. Period.
Thank the Dems and the Rinos fo dat.
85. Kinuachdrach said:
“Don’t worry, Dangerous Dave intends to do something serious about the most urgent problem facing bankrupt Britain — Reducing its Carbon Footprint.”
“We found that many obsessive compulsive disorder patients were concerned about reducing their global footprint,” said study author Dr Mairwen Jones.”
Scotch wha hae with Wee Davey, Wee Davey, Wee ….
…-
“AUCKLAND, New Zealand, May 6 /Medianet International-AsiaNet/ –
The Royal Australian and New Zealand Collage of Psychiatrists’ Congress at SkyCity Convention Centre in Auckland brings together mental health experts in a diverse range of areas; from children and adolescents to old age, mental health across the lifespan will be discussed. Here are some highlights from this morning’s program.
Global warming fears seen in obsessive compulsive disorder patients
A recent study has found that global warming has impacted the nature of symptoms experienced by obsessive compulsive disorder patients. Climate change related obsessions and/or compulsions were identified in 28% of patients presenting with obsessive compulsive disorder. Their obsessions included leaving taps on and wasting water, leaving lights on and wasting electricity, pets dying of thirst, leaving the stove on and wasting gas as well as obsessions that global warming had contributed to house floors cracking, pipes leaking, roof problems and white ants eating the house. Compulsions in response to these obsessions included the checking of taps, light switches, pet water bowls and house structures. “Media coverage about the possible catastrophic consequences to our planet concerning global warming is extensive and potentially anxiety provoking. We found that many obsessive compulsive disorder patients were concerned about reducing their global footprint,” said study author Dr Mairwen Jones.”
http://www.voxy.co.nz/national/psychiatry-congress/5/47523
Eggplant @99:
I said the Crays were used for Pine Gap, not at that site.
Did you know that one of the first single-mode fiber optic bundles installed in Australia runs from Pine Gap to Canberra?
http://en.wikipedia.org/wiki/Defence_Signals_Directorate
What city was the university in?
#100. Unsk
Yes, and the coming specter is that when things get really ugly the government will come in and demand that you turn over your real wealth for one of their shiny IOU’s. In the Great Depression the government demanded that everyone turn over their gold in exchange for pieces of paper.
In the near future I expect that the US government will be demanding that you turn over your 401k’s for one of their IOU’s. At this point in time, saving anything that leaves a paper trail for the government to trace is a fool’s game. You might as well just flush your money down the commode.
47. Dave
To understand what is happening in “Yurp”, imagine California being able to tax Arizona, Utah, Nevada,
Oregon, Washington and others in order to pay California debts.
—————-
California is, in essence, already doing that.
I live in Georgia and have rental property in Calif. Even though I do not make enough from that “enterprise” to pay California income tax, they have put out a requirement for all property managers to withold from rents a 7% amount that is sent directly to Sacramento.
Now I’m wondering when I file my CA state taxes for 2010, if they will then send me an IOU for my trouble.
In short, the government – especially those in financial difficulty – have already started “stealing” from the “haves” to prop up their wonderful “gifts” to the have-nots.
Wretchard (98)…
You just outdone yerself, and that’s saying a lot! Beautiful little essay within a blog thread.
“You are a Child of the Universe, no less than the trees and stars, you are bound to its nature. The authors of the declaration understood this. Marx thought he knew better and invented his Laws of History driven of course, by his ideas. It determined events. The problem is, it did not.”
That’s a keeper, alright.
#104. RCM
I shall cease taking up Wretchard’s bandwidth after this post, but really the major drift isn’t taking from the “haves” and giving to the “have nots,” its taking from the non-politically connected and giving to the politically connected and their groupies.
The riots in Greece seem to show an evolution in man that is the exact opposite of what Darwin ponders, or exactly what he expected to happen, red in tooth or claw. But if the latter, it may serve the individual above his community, but in this day and age, it seems quite short-sighted.
I am not a scholar of the Depression in the 30′s, but the main thing I remember seeing was the long, long bread lines filled with people whose pride would usually prohibit them from asking for a handout – no matter how little money they made annually. Personally, I think what might have sustained them was their faith and the acceptance of their responsibilities as Men – back then taught to them by their fathers and a society that supported the masculine role they should play. But there they were, pride in deep remorse for the position they were in. They may have been angry about what they did not understand about the Depression, but they stood tall and fought the best way they knew how. They pressed on. Prideful, to be sure. Nonetheless, they were not demanding, they were asking. They knew their families needed them to act “like men” and providers. They were grateful, too, but did not wish to wallow in the miasma they found themselves. They were also very rugged folk, generally self-reliant, and painted as humiliated to have to stand in lines for hours waiting for handouts. They had a very good grasp of reality and a common man’s sense of what “ought” to be. I think we’ve lost our “oughts” in the greater scheme of things and focused them narrowly – only on ourselves; on our “rights.” I have no problem with acknowledging or honoring the rights addressed by the wisdom of our foundering fathers, but one should never make himself immobile, waiting for someone to deliver something that is attainable through honest hard work.
Today’s man seems to have no pride, and it seems that that plays right into the hands of those who would be their puppet masters. In fact, when one clamors for one’s “rights,” he often does so while totally ignoring his “duties” – to himself, his family, his community and even his nation. Rights, then today, seem to trump even self-respect. And once one ventures down that path, one gets neither.
I think how we extricate ourselves from a growing dilemma is to apply what C. S. Lewis says to do after one finds oneself off track. Simply, you go back to the place where you made a wrong turn and shove off on a different course. But one might have to give up one’s wrong-headed concept of government as one’s “daddy.”
106. Tcobb
I would agree, Tcobb. But under President Obama, isn’t that essentially the same thing? It’s just in a state of transition.
Premature retirement dictated by age’st policy notions discards human capital into the urn.
Where such rules don’t hold it’s common to see seniors going well into late life.
A perfect example would be sports announcers, artists, sole-proprietors, actors, on and on.
Edward G. Robinson and James Cagney would be particularly egregious sinners. ( Soylent Green: actors dying in the part!)
——
The days of very hazardous heavy industry, brutal mining, cotton-picking serfdom are gone.
Today’s farmer jumps into his air-conditioned John Deere and tools around the spread with GPS accuracy.
Ditto for most high-power human exertion: it’s all gone to the machine.
Not surprisingly, the rapid and unstable nature of commercial operations is forcing all but the government crew to switch career tracks with age.
The labor market for seniors needs to be freed up so that they can be economically employed. This will replace the output that is NOT coming from the unborn cohort.
———
Large screen displays and fat key-boards mean that seniors can troll the internet… and much else.
———
The real axis of contention is between individualism and collectivism.
Old Europe is the ass in the coal mine — and we all know that they are blinded before being set to the harness.
Let’s NOT follow them into the pit!
#108 RCM
I suppose I’ve lied once again in regard to taking up bandwidth, but the point I tried to make is that the supposed transfer of wealth (and actually its not even that, its the transfer of income, which is a subset of wealth) doesn’t even end up in the lap of the have-nots, it ends up with the people who are in charge of making the transfer.
But that is the real point of compelling the transfers. Its not about the people who are compelled to give charity to the poor, and its certainly not about the poor, its about all the parasites who administer it: the blood-sucking ticks in the middle.
Armageddon Rex @ 102:
When I lived in Australia I did some contract work for the DSTO (I’m an aerospace engineer) but was not familiar with the Defence Signals Directorate. Based upon the website that you linked, the DSD is the Australian analogue to the American NSA. Pine Gap is a satellite tracking station but its main mission was to collect intelligence data from polar orbiting “store-dump” satellites. Polar orbiting satellites have ground tracks that roughly follow lines of constant longitude in the inertial frame. During the Cold War, store-dump satellites would overfly the Soviet Union, suck in radio traffic that was accessible and then dump the data down to Pine Gap. Most of the data that was down linked would have no national security value, i.e. random private telephone conversations. A tiny fraction might be telemetry data from an ICBM test or encrypted official Soviet communications. It was my understanding that all of the data was immediately hosed off to the NSA for reduction. The Soviets recognised the strategic importance of Pine Gap when they tasked their operatives in Australia to do agitprop against it. Perhaps with the end of the Cold War, some data reduction is being done in Australia. As you correctly linked, Australia is a member of the UKUSA alliance. Australia is among America’s most trusted allies and has access to United States classified information.
Australia is now in a significant strategic dilemma. Prior to the end of the Cold War, Australia could consider itself safe under the American nuclear umbrella. With the collapse of the Soviet Empire that safety became less assured. Since the election of Obama, Australia would be derelict in its national defense to continue having blind faith in America. Arguably, Australia is the richest nation on Earth in terms of cheaply accessible natural resources, e.g. the huge iron ore deposits around Port Hedland, bauxite deposits near Weipa and anthracite in Queensland, etc. Unfortunately defending those natural resources from a potential adversary (China, Indonesia, etc.) is only going to be more difficult. To some extent, Australia has a huge neon sign overhead flashing “Invade Me!”. Australia will need to spend more of its GDP on national defense and develop independent national security capabilities, e.g. do their own code busting, intelligence gathering, etc. Eventually Australia will be obligated to pull out of the Non-Proliferation of Nuclear Weapons Treaty [NPT] and develop an independent nuclear weapons capability. Of course these concepts are completely beyond the comprehension of your typical politically correct Australian. Hopefully there will be an awakening before China does its strategic calculation towards Australia after America completes the process of neutering itself.
Kinda whatchu call a Pyramid Robin Hood Scheme.
http://www.youtube.com/watch?v=qLkhx0eqK5w
“The riots in Greece seem to show an evolution in man that is the exact opposite of what Darwin ponders”
Natural selection doesn’t apply to humans. Animals adapt to their environment, Humans adept their environment to suit them. Climate cools and animals with more hair survive to breed more hairy animals. Humans discover fire and invent the fireplace, then skin hairy animals for their warm hide.
Applying Darwin’s theory to humans is some sort of religious thing. Humans haven’t evolved appreciably over the last 100,000 years. You could take a Cro-magnon man, dress him in Brooks Brother and Gucci, walk him down Broad Street and he would look like any other Stockbroker or Attorney.
3,000 years ago, a horse was the size of a very large dog. Men used them to pull sleds. Then a breeding program was started to produce a horse big enough to ride. It worked.
Darwin’s theory didn’t cover political evolution, AFAIK. I will admit to not having read “On the Origin of Species by Means of Natural Selection, or the Preservation of Favoured Races in the Struggle for Life” since the 50′s. That was before the religious attack on the his theory.
O/T but maybe not so much. I went to a funeral today of a precious 2 1/2 year old little boy who died after battling pulmonary hypertension his whole little life. The testimonies at the church were of a selfless mother and father giving their all and making incredible sacrifices materially, etc. for their boy. I was sitting in that teary eyed service thinking, this is why we fight. This is why we don’t roll over for leftist haters who mock tradition and despise freedom. We stand in stark contrast to the Barbaric followers of allah the moon god who love death and would poison all the well of life and liberty if we surrender. This is a fight worth fighting for the America we’ve all loved and sang of her “purple mountain majesties above the fruited plain. It is a fight for our families and our posterity and the precious life that God gave us to enjoy. Surrender to the forces of evil? Hell no!
R @ 113: Natural selection doesn’t apply to humans. Animals adapt to their environment, Humans adept their environment to suit them. Climate cools and animals with more hair survive to breed more hairy animals. Humans discover fire and invent the fireplace, then skin hairy animals for their warm hide.
Then humans who can deal with fire are selected for.
And there was some serious adaptation during the repeated bubonic plagues in Europe, for genes resistant to the bacterium – which it turns out also related to resistance to AIDS!
–
Is that bit about horses true, that they were bred to current size only 3k years ago? Seems … unlikely. But I’m not up on the latest research on the evolution of any farm animals. So no culture previous to 3,000 years had modern horses?
103 TCobb
“At this point in time, saving anything that leaves a paper trail for the government to trace is a fool’s game. You might as well just flush your money down the commode”
The Credit Unions are safe (for now) but of course that doesn’t mean they will be later. All of our group have taken all of our money out of the banks and either put it in a CU or invested it in other things. Think Barter.
Then Think Barter Again
For those of you in the Urban areas think hard about getting out. If your out, think about becoming as self sufficient as possible. In the future paper money will be good only for one thing and actually it is a little small even for that.
Papa Ray
trangbang68 @ 114:
“I went to a funeral today of a precious 2 1/2 year old little boy who died after battling pulmonary hypertension his whole little life.”
The death of a child is a terrible thing. I presume the boy had a heart related birth defect. Did they mention what it was?
Rosinate…
I hope you’re pulling my leg.
Intra-species warfare guarantees that un-natural selection still occurs, it just morphs into alternate pressures/selections.
The evolution of the horse occurred in North America, right along with the camel, both of which went extinct when super-volcano Yellowstone National Park blew.
Fortunately before that extinction they had spread to the old world. It would take the Spanish to bring the horse to the plains natives by way of rustled steeds.
——
As if we don’t have enough to worry about, Yellowstone is morphing so much that we may be a lot closer to a big blow than can be imagined.
The last big blow, Toba,
( http://en.wikipedia.org/wiki/Toba_catastrophe_theory )
is estimated to have almost snuffed us out.
Yellowstone would be about another order of magnitude just based on the size of its caldera.
What, me worry?
Unsk #100
Absolutely!
And don’t forget the litigation explosion. Everyone pays for that, too.
It’s not just the country’s Design Margin that has been used up by special interests – it’s all our individual margins, too.
Wretchard #98
“Some politician in the Philippines was once told that the cause of high prices was the Law of Supply and Demand. He retorted with a straight face that if he were elected he would propose it’s repeal.”
Reminds me of an e-mail I got describing a visit from an Obama team sent to the auto companies to describe what kind of car they wanted. Powered by liquefied natural gas, 50 miles per gallon, 500 mile range, etc. When told by a senior Chrysler engineer that violated the laws of physics they replied “We have control of Congress and the White House. We can get those laws repealed. Now what did you say they were called?”
107 RCM
Well said. Very Well said and I have tried to instill those thoughts and beliefs in my grand children.
So far I am not disappointed in any of them. Worried about their futures for sure but confident that they will be survivors.
The strongest headed and smarter of all of them is my 9 year old grand daughter followed by her little sister of 3. They will make their parents and myself proud but even more important they know how to think for themselves and make things happen. The teachers and caretakers at day care are always relating to me things that please me and sometimes astound them.
Of my 3 grandsons, one is in the Navy, one in the Air Force and the 14 y/o says he is going to be a United States Marine.And I believe him.
They are all fine young men and brook no nonsense and take no insult. They are friends to be depended on and enemies that no man would want.
The trick I believe is to start teaching kids early and give them a good role model to follow. I’m not the best nor are their parents but we try. We Try.
My family, be it because of me or in spite of me are survivors. They will fight for our State and our Republic and they will help re-build her.
And make sure her enemies are punished.
Papa Ray
P.S. 114. trangbang68
You have identified it correctly and with passion. May all your efforts be rewarded and your faith always strong.
One of the great conceits of the Left is the idea that government can control and direct the animal spirits of the market in anyway the Left so chooses.
The problem with this idea is that like many organic systems, when pushed and pulled way out of joint, the reaction to cleanse and right itself is often more severe and violent, and more destructive that the original malady. The more pulled out of joint, the greater the violent reaction.
Many have feared that the stock markets have been severely manipulated since Buraq took office to his benefit, much along the lines of Josh’s PPT. With the machinations of the market yesterday, as described by ZeroHedge, Market Ticker, and others, these manipulations have started to become exposed. It has been often speculated in blogs like ZeroHedge that the individual investor has stayed on the sidelines since the Crash because of a distrust of the large Investment Bank/Brokerge firms activities to manipulate the market. This distrust may be in the process of going mainstream.
The big Investment Banks, and whomever inside or outside of government who is helping to push these manipulations along are playing a very dangerous game. Our financial system is built on trust and confidence. If the ordinary Joe in the street, loses confidence, and starts to think that Wall Street guys are as corrupt and fraudulent as it appears they are, our financial system could quickly become toast, unless heretofore unheard of massive, honest, and hardnosed prosecutions of the Wall Street fraudsters takes place first. And good luck on that wishful thinking.
Wall Street, much like Buraq, has doubled down on a bet in a game where the endgame is only destruction and ruin. I don’t get it. Wall Street thinks they can run this con forever without getting burned. I think in the end, they are not only going to be burned, they are going to be scorched if not figuratively burned at the stake if there is any justice in the world.
Our financial system is built on trust and confidence
hmm, no the system is no more that, it’s too abstract to have to rely on a person’s words, it has become a game, computer games, where there isn’t persons that can be hit but abstract entities, so funny to win and get the winning part of “game over”
Don’t look now, but the conservative flagship The National Review just detonated three decades of conservative orthodoxy: supply side economics is pure magical thinking!
http://article.nationalreview.com/print/?q=NmE3Yzg4MmFjNWZhZDZiNThhNzU3MjllZjU3NzZhMWY=
What is conservatism if it can’t face hard truths? This ideological fantasy could only evade math for so long — nowwait for conservative intellectuals to defect to the new heterdoxy. The larger movement should take a bit longer.
One of the unspoken fears about the trading glitch is that it is some form of malevolent action. That is a very dangerous suggestion because it will undermine confidence in the system. CNN Money mentioned the possibility, but it’s a dangerous allegation.
The business of fighting network intruders has been raging for a long time. The Wall Street Journal reports, rather unreassuringly that America is currently in the hands of Janet Napolitano.
The UK Register described the latest development of an old problem. Fake network hardware.
Now the interesting question is what the Obama administration would do if it actually found evidence that a cyber war attempt had been made on the US financial system — assuming for the sake of argument. Probably order up more trillion dollar defensive measures. But I don’t think they would order a counter-cyber strike (the most effective of which would be to pull up the fiber optic cables of the offending nation and cut them off).
#122 Marie Claude
You’re right about it being a game, that is the problem, and much of the game comes from the tax structure and the laws. It would be far better if investors could buy a certificate that would entitle them to a fixed percentage of the company’s yearly profits (as calculated before management’s salaries and bonuses are subtracted from the total). If you invested in a stable company with a good product you wouldn’t be quite so concerned as to the going rate of the certificate, the main issue would be how much income you can expect from it.
That’s really what capitalism is and should be about, not phony games where its more about psychological and/or political manipulation. Unfortunately Wall Street has drifted away from focusing on profits and production to speculation and high level versions of three card Monte. I agree fully with #121–the people behind it should be burned at the stake.
#124 Wretchard
Now the interesting question is what the Obama administration would do if it actually found evidence that a cyber war attempt had been made on the US financial system —
I fear that in the case of the Obama administration they would do nothing for the simple reasons that (1) it was (at least partially) an inside job and (2) many of the people behind it are too politically big for them to fail, at least in the view of the present powers that be.
Steve, I call BS on your post. It is a lie by the sin of omission. Mr. Williamson’s title does his piece a disservice. Supply side economics is a theory that if you lowered taxes AND decreased spending you would get economic growth AND sustainability in a “FREE” market. What his history lesson tells us is we didn’t get what we were sold. So the theory is still valid as long as we play by the rules set forth. Which hasn’t been done by the pols in DC of either stripe.
What Unsk at #121 gets wrong is the strangely talismanic notion that the current financial system is somehow not man-made, that it is an “animal spirit,” a priori, organic. In actuality it was constructed through modern bureaucratic regimes and can be, indeed will be, remade by them.
It is not some form of higher, impartial intelligence that democracies can cede decision-making over to. History has provided abundant recent examples: the S&L crisis, Enron, Worldcom, the dot-com bubble, the current credit crisis, Madoff, etc.
Wretchard @ 124:
Your post is the most damning evidence against procuring hardware outside of our own nation for critical systems. If they are only a fractional percentage successful in placing such bogus/altered hardware in our system we could see actions on the markets such as yesterday. The conspiratorial assumptions aside it just makes good common sense to prohibit in the harshest terms possible such actions. I would go so far as to categorize such actions as treason. That the govt would not be proactive in ameliorating such actions gives one the thought that they are involved in some important way. The time honored way to determine who, what, when and where is to follow the money.
“fat finger” is nuts –the law of averages, the behavior of large numbers, means if that could happen once, if it could happen that way one single time, then it would have already happened many, many times before.
I was hoping you would show up Buddy. Hope you didn’t get scalped! Denninger and Durden are en fuego about HFT and PPT warping the game. It really is gambling for the big boys isn’t it? Does anyone have info on what the 401K fund managers did or didn’t do during the blip in the matrix?
I’m glad to be watching this from the sidelines. I sold everything I had about a year ago, at the exact bottom as it turned out. Yeah, there’s a reason why I’m not rich.
One of the unspoken fears about the trading glitch is that it is some form of malevolent action.
Trading glitch, what trading glitch?
The only glitch was getting caught, and just who is the malevolent actor in that?
“I’m shocked, shocked, that gambling is going on here!”
S7/128; History has provided abundant recent examples: the S&L crisis, Enron, Worldcom, the dot-com bubble, the current credit crisis, Madoff, etc.
–pretty damning alright. But thru those bubbles and scandals, unemployment stayed pretty low, GDP pretty high, productivity gaining and inflation tame, and no particular frets over the viability of the financial syatem. Relative to most other economies, this one chugged along behind those awful headlines, too healthy to flop over dead from a spell of flu or a migraine.
Matter of fact, re that list of scandals, an awful lot of the current players, even some then-shavetails like the current chairman of the CFTC (AKA “Obama’s head regulator”) have been more or less the drivers (from first one side and then the other, then back again, of the regulator/regulatee divide) of the since-mid-90s peculiar evolution of financial regulation that has repeatedly and regularly coughed up these bloody spumes.
It’s very easy to blame it all on too-much capitalism but as usual when the victim is blamed for the crime, the claim won’t hold up to even the most desultory challenge.
The trick is to define ‘capitalism’. If the definition includes robbery and exploitation, then there’s a communication problem with the definition referring to open markets and free choice and the Golden Rule. That broader definition obscures the critical right vs wrong stipulation, which renders it ideological rather than economic.
***
jfs/131; thanks for asking –yes i got scalped but only on paper –i quit using stops long ago –the damned specialists would screw you on them back then –in the horse and buggy 80s.
I dunno what the fund managers are doing –i presume you mean the ones that took the hits in the funny place vacuum that the ‘away’ markets put underneath the exchange bid/asks –
There are so many victimized parties piling up –i’m still flabbergasted at the car bondholders that Uncle Sam Obama told to go frog themselves, cuz the law don’t matter no more –
Eggplant, The little boy had pulmonary hypertension and heart complications. He never really was healthy. He received some of the best medical care available through his dad’s insurance. Under full blown Obama care; he probably would been relegated to die and save those precious health care dollars so Chastity Bono could have a new appendage attached. We must persevere.
http://www.marketwatch.com/story/citi-sees-up-to-20-correction-over-greece-2010-05-07
Citigroup got things off to a bearish start with a prediction that fears of sovereign debt contagion over Greece could trigger a near-term correction of up to 20%
Sounds to me practically like an announcement by the PPT invoking the sanity clause, 20% correction is almost exactly what I think the PPT has larded into the market to date.
Now, I’m not necessarily saying this is a bad thing, only that it’s been done under the covers, which practically guarantees the funds expended are being robbed by all the participants, “carrying charges” as Signor Ferrari explained to Rick in Casablanca.
Several above mention Denninger –i think this snip is worth copying:
http://market-ticker.denninger.net/archives/2283-More-On-Yesterdays-Plunge.html
(snip)
You can fix an illiquid system with more liquidity. But if the problem is insolvency – that is, firms have more debt than they have assets and are in fact bankrupt then more liquidity makes the problem worse!
Why? Because all liquidity is in fact debt.
You can’t add more debt to someone that has too much debt and make their situation better. It makes the situation worse! Accounting gimmicks only work for a while, in that they can change how one reports assets and liabilities but cash flow can’t be altered by accounting gimmicks.
Ultimately, cash flow always wins. As I have repeatedly pointed out when evaluating a business I first spend my time on the income statement and cash flow figures. You’re never going to get away with fudging the deposit tickets at the bank, and the money you claim to have either exists or it does not, and is easily verified.
(ellipse)
The large financial institutions took the “liquidity” and used it to play games in the equity market. But this generates no real liquidity in the equity markets – that is there is no depth in the market itself, and as such when the computers come in to sell there’s nobody on the other side willing to buy and the bid collapses.
This madness must be stopped, but doing so means doing what we should have done in 2008 and 2009 – forcing every financial institution to eat it’s own cooking and absolutely barring financial firms with access to fed and government liquidity from trading or speculating in the markets.
Glass-Steagall would have prevented the illusion of liquidity from existing and thus what happened yesterday wouldn’t have. Of course without that illusion we would have also not powered the S&P from 666 to 1219.
So choose your poison folks: either we start telling the truth and have a market that more-clearly reflects actual buyers and sellers, or we will continue to run the risk of the sort of collapse we saw yesterday – and there will be more of them.
(close quote)
Buddy, I wasn’t sure if you were that close to the sidelines. Yes, I was talking about those managers. It seems to me that they are the middle men. Kind of like the shepherd who watches the sheep until the fleecing commences. I was wondering why no squawking from them? Maybe they are being paid handsomely to shut up and bring in the flock? I am glad I quit gambling long ago. I got out in 1989 when I decided I didn’t have the stomach for it. I too cannot understand for the life of me why the bondholders have not lawyered up big time. There must be some immense pressure on those guys to bend over and take it.
You know it may be in the public interest to start compiling a list of the big fish in this cesspool. Must be some real bottom feeders. Not company names but individuals that have the ability to make decisions on a strategic scale.
Another guy who like our host is doing yeoman’s duty is Trevor Loudon over at New Zeal blog. I just started reading him so I may be way back in the pack on this but I hadn’t seen his name mentioned. He actually does paper research on these miscreants.
jfs/139; miscreants? the gov’t has the tapes on the naked shorting in that Panic of 08 week in September. That’s getting to be a long time ago –and STILL we have the same sort of trigger pulls as yesterday?
but re the ancient history miscreants of ’08, Matt Taibbi has even publicized the one guy –presumably at Bear –who –well you know ‘puts’ are an option to go short, and are sold with 9 month terms to expiration –well if a ‘put option’ is a week or two from ex date the so-called ‘time decay’ is almost total on an ‘out-of-the-money’ strike price. so you can buy ‘em for next to nothing, if you want to take a wild flyer like you’d bet the loooong shot at the track, but only for pocket change.
well, Taibbi’s tip was that one of these insiders naked shorting their own banks (imho trying to collapse the stock price and get rich while forcing a banking system nationalization –nice job if you can get it, it’s not crime –not even greed –because its ideology, see?) bought a million plus bucks worth of these ‘decayed puts’ on Bear, puts that could only go ‘in the money’ if Bear’s stock completely and unprecedentedly collapsed in the next few days –which, whaddaya know, it DID, and he made 270 million dollars on his week-long hold.
Now here’s the point –the gov’t KNOWS WHO THIS GUY IS –and fifty others like him who didn’t happen to generate a confidential tipoff to Taibbi. But you don’t know who he is, and i don’t, and the NYTimes doesn’t, and the DOJ *surely* doesn’t, it’s too busy protecting the rights of Yemeni Al Queda soldiers.
***
http://www.bing.com/search?q=Trevor+Loudon+new+zeal&form=IE8SRC&src=IE-SearchBox
(thanks!)
You know that nothing ever goes away once it makes it to the internet. So these names have to be somewhere. But I do believe that it isn’t going to be Taibbi or some other “journo” unless they can make some flow from it. There was a guy (Patrick Byrne)who was fighting back and had his own website selling surplus? His position was that the players had been offered a deal they couldn’t refuse from the gucci suited crowd. And they were manipulating the markets through GS (surprise, surprise, surprise!) and hedge funds like Copper river management and Contra strategic short fund. Man we need a ball buster like Melvin Purvis to clean house. This is not going to end well I am afraid.
Akya over at Asia Times online has a good background article on the ECB’s shell game and the outright fraud being perpetrated by Eurobanks wrt to dead mortgage paper. I think the little kid with his finger in the dike is going to drown soon. Trust is nonexistent on mainstreet and if the baby boomers get scared and pull out of the 401k funds et al. We should see a GIANT mushroom cloud appear over yurp and Asia. I will be interested to see the NIKKEI open on Monday. Very interested.
This sort of zombie equilibrium persisted for two decades in Japan’s moribund economy; in theory, the US Treasury and the financial system could keep it going indefinitely. But there are a hundred ways in which this arrangement could go wrong.
Weaker governments like Greece and Spain, or even the United Kingdom, could snap the chain. A shift out of US dollars in response to monetary inflation could force the Federal Reserve to raise interest rates. An attempt by investors to ease out of the carry trade could provoke a stampede for the exits. Japan has managed to keep its bubble going for 20 years. But Japan did so on the strength of its domestic banking system under the supervision of the Bank of Japan; the United States depends on the reserve status of the dollar, which makes less and less sense when the Treasury is flooding the world with US liabilities.
We have never seen anything quite like this before, and one hesitates to make forecasts about an arrangement so absurd and unstable that the list of potential break-points is endless. Now that the whole world is buying US government debt on borrowed money, it makes no sense to own it. It will end badly – but it is too early to specify just how and when.
Spengler is channeled by David P Goldman, senior editor at First Things (www.firstthings.com). “
If this goes wobbly or even slightly sideways. Turbo Timmy and Bendover Ben should get a blindfold. Nah, on second thought no blindfold. I want them to see it coming. Kabuki theater writ on a global scale!
Have you got your 3B’s all arranged and ready to go? Strap in tight ladies this is gonna be one doozy of a drop.
Once upon a wild hair, I took a job in the wire room of a brokerage firm. Lady there told me that if I went to work there she would teach me how to strip, strap, spread, straddle and do it on the floor. How was I to know she was talking about options?
Well, I had a little bit of suceess going long on out-of-the-money puts and a few calls as well. But then the government and the boys decided that they should not allow little fellows like me to gamble their hard-earned savings on things that really should be the sole perogative of the well-connected.
And OF COURSE things like retirement accounts could not touch options with a ten-foot pole—–not even to write covered.
Result has been to leave the field to the chosen few to loot as they will. Since options ain’t futures—-there has to be actual shares for each option—–widespread participation would effectively preclude the giant economy sized fraudulent positions and render fraud not all that profitable even when there were no hitches in the plans. But the gobbymint luvs you boy and is gonna protect you out of everything you own.
Now as far as this latest sell-off and market jitters, looks like a bunch of folks are worried about being able to pay their euro-based debts and are ditching their dollar-denominated assets in a rather panic-stricken manner. Problem is much more over there than over here and should not cause any permenent doldrums in our markets. (If Good Lord Willing And Crick Don’t Rise!)
BTW Buddy: I done went and mispoke to you a while back. Fredericksburg arrival scheduled to 15 Oct, not 14. And be darned sure those spinners on yore beanie counter-rotate INWARDS you hear?
124. wretchard
“One of the unspoken fears about the trading glitch is that it is some form of malevolent action. That is a very dangerous suggestion because it will undermine confidence in the system. CNN Money mentioned the possibility, but it’s a dangerous allegation.”
Looks like the President beat everybody to it. Unspoken, no more:
White House doesn’t rule out sabotage in market fluctuation
http://thehill.com/homenews/administration/96713-white-house-doesnt-rule-out-sabotage-in-market-fluctuation
Yikes! He is really doing a great job as the President of “all Americans” – except, of course, those “tea-baggers.”
forcing every financial institution to eat it’s own cooking and absolutely barring financial firms with access to fed and government liquidity from trading or speculating in the markets.
Politicians with nuts are wanted !
…and she don’t mean “nuts politicians” neither!
jfs, i hear ya on Patrick Byrne. His company, Overstock dot com, got burned by an early and now quaint-looking pump & dump using the crooked tools that the SEC had decided it would not see. Byrne’s blog, http://www.deepcapture.com is like that nightmare where you think you’re at a fine dinner party and you look up and somehow all the partiers have turned into ghastly corpses laughing it up. His two partners, Mitchell and Bagley, are ace reporters –credentialed mainstream guys who’ve slipped the noose and gone underground and are finding the demons stoking the furnace. Pay attention to the comments sections over there –whistleblowers galore dropping anonymous bomblets from inside the inferno. recommend start with “The Mitchell Report” (link @ the masthead).
RCM, what do you call it –tautology? –the warning about sabotage IS sabotage –weaponized stealth language is this president’s special specialty –
dave, of course inward –the other way would be like drinking out of the wrong side of the glass –you’d pour it all over yourself
btw –Take a look at instapundit:
JAMES PETHOKOUKIS: 4 ways Congress caused the financial crisis.
Posted at 10:06 am by Glenn Reynolds
#142 JFSanders031
If this goes wobbly or even slightly sideways. Turbo Timmy and Bendover Ben should get a blindfold. Nah, on second thought no blindfold. I want them to see it coming.
and
#140 buddy larsen
Now here’s the point –the gov’t KNOWS WHO THIS GUY IS –and fifty others like him who didn’t happen to generate a confidential tipoff to Taibbi. But you don’t know who he is, and i don’t, and the NYTimes doesn’t, and the DOJ *surely* doesn’t, it’s too busy protecting the rights of Yemeni Al Queda soldiers.
It strikes me that someone, somewhere, should be making a list and checking it twice. After all of this goes pear-shaped and we are dodging fan-flung organic matter; I do not think it would be a stretch for whatever remains of those who are non-TWANLOC to consider what has been done by those operating in a conspiracy with both members of our government and individuals and forces overseas to destroy our country for their own benefit as falling under Article III, Section 3 of the Constitution. Specifically, “levying War against them”.
What circumstances will dictate is whether the sequalae would resemble Nuremburg or Christmas day 1989 in Târgovişte, Rumania.
#145 RCM
Looks like the President beat everybody to it. Unspoken, no more:
White House doesn’t rule out sabotage in market fluctuation
Watch this meme closely. While ‘Teh Won’ may have been just flapping his gums to be the center of attention; he normally calculates and teleprompter’s all statements for a political reason. Consider.
This regime will never blame either the officially non-existent Muslim terrorists, or Muslim states. Nor will it blame China, whose cyberwarfare effort is officially also non-existent. He may be willing to blame the Europeans, because after all they are just whites; but that would mean both crashing the Eurozone if he follows up and harming the financial interests of some of his minions. Possible, but not at all likely. He is not going to claim it is the North Koreans, because any such claim would require response by force which is the only lever that will affect their actions. And they are China’s satrapy. He won’t say ‘boo’ to the Russians, because his relationship with Putin is best described in crude barnyard terms.
Who does that leave overseas that he has insulted, abused, and considers a scapegoat? Let’s see …
‘Od lo avdah tikvateinuה, Hatikvah hannoshanah, Lashuv le’eretz avoteinu, La‘ir bah david k’hanah.
If he chooses not to look overseas for a culprit, which group or groups of people are described as “terrorists”, “violent”, and as “threats” by this regime and their minions?
Is it not interesting, that we are already reduced to the same game as others in totalitarian countries who try to divine the “real” meaning of government statements, because we know that whatever comes from the official news sources cannot be taken at face value?
Subotai Bahadur
After you read the Pethokoukis piece, and savvy the DC end, read this excellent short overview of the truth behind the bland generalizations about the ‘subprime market going bust’.
There are of course the painfully obvious links between DC and Wall Street miscreants, but there is so much more here –for one small example, consider the career of one Bill Donaldson, who is now one of the esteemed members of the PERAB (“President’s Economic Recovery Advisory Board”). He sold his large brokerage firm (Donaldson, Lufkin, Jenrette) to Credit Suisse (later instrumental in injecting the poison into Europe–now see ‘Greece’) back during the late Clinton administration, then opened his own offshore dark pool “unanticipated consequence of Enron/Sarbox” fueled hedge fund, from which he was then under Bush, somehow, installed head of the SEC, which he then carefully defanged, then stepped aside, leaving to a hand-picked moron-patsy, Republican Chris Cox, the glaring 2007 SEC rules changes that facilitated the stampede of the financial scam into the full-blown market and economic-system panic that would not only insure a new Democrat president but would ALSO provide the crisis the new incoming president would need (as he boldly promised a couple days before the election) to “fundamentally transform America”.
As the Mitchell article makes clear, the vast bulk of the “lit-fuse” sales took place in the very constricted time-space of 2005-2007 –so quickly done that any following honest G-men or a Fox reporter or two, or an honest blogger like wretchard, would only be beginning to feel the stall while the perp pilots were already happily firing each other and and bailing out in their golden parachutes.
***fwd edit-
SB/148; regarding your closing paragraph, you’ve *got* to read Make a Noise Like a Cow –
PS; As the Mitchell article doesn’t mention but which you can easily verify via search, nearly to a man this small group of what must be called conspirators, have public records as supporters and donors to the Democratic party, and in some very large cases such as John Paulson and Joe Cassano, long-time supporters of a then and until recently obscure state senator from Chicago name of Barak Obama.
(as i’m typing this Fox is reporting some official spokesperson doing Thursday’s crash forensics is saying “…it seems to’ve begun with trades executed from Chicago” –hmmm –meaningless except as more sickly light from a bad moon rising)
“…and she don’t mean “nuts politicians” neither!”
uh they are too numerous ! even whyskey wouldn’t point on them !
also, by way of taking a quick look at individuals as a way of seeing into the present situation, and re Credit Suisse, the Clinton reversal of Glass-Steagall making Citibank the breakthrough first “too-big-to-fail” (read, the first socialist takeover of a vital national organ of private enterprise) and the Enron board members and consultants now running money and policy both in and out of gov’t for the Obama admin, please consider one Richard Holbrooke –another Credit Suisse & Citi board member (stepped down only a few months ago) & US gov’t via Democratic party triple affiliate.
Holbrooke is distinguished by having been hauled before congress (between stints as a top-level US gov’t official) as a principle in an earlier Credit Suisse scam, and having “taken the fifth”, and then despite that disgrace STILL having held his party place well enough to’ve become your current special envoy to an unimportant little backwater posting known as Afghanistan/Pakistan, from which perch he quickly halted the Bush poppy-destruction program. Now a year later, one reads of a new flood of high-quality heroin hitting the American end-user market at a high school lunch-money bargain price of $2.50 per ‘bump’.
An ‘unanticipated consequence’ of the war on terror?
Like those dark pool hedge funds are ‘unanticipated consequences’ of Enron loopholes having created Sarbox loopholes, et cetera & so forth?
Like an ‘unanticipated consequence’ of having so politicized white-collar crime that it is practically beyond ordinary statutory meaning is a market-murdering Chicago shadow syndicate that last Thursday sensed the Greece’d skids under the bids and then –just after the clock deadline for market-curbs (exchange rules to slow the action) –probably legally flooded Proctor & Gamble, collapsed the bid, and then covered their shorts (scenario includes that sabotage spectre raised at the highest level –simple opportunism? –simply too good not to use to advance an Orwellian national security ethos)?
Like the (so sanctimoniously proferred) responsible new taxes and regulations are now having the ‘unanticipated consequence’ of destroying the natural phenomena of zillions of small daily hourly quick efficient continual responses to individual P&Ls and balance sheets?
Like the death of western markets and economies and societies and cultures will be the ‘unanticipated consequence’ of never being able to anticipate any consequences at all, because, lets face it, not everybody is equally good at it so it gives brains and character an unfair advantage?
But…one wonders, according to whom, exactly, and for what ?
Thanks Buddy and SB, I knew you would remember. I am too busy farming to keep up with Richard and his prolific posting! Even with my Crackberry and a GPS driving the tractor. I have GOT to sleep sometime…
SB, I think Mr. Louden over at NEW ZEAL blog is doing a pretty good job of listing the miscreants. Check out the “Apollo foundation” and it’s connections. They are getting their funding from the suckers (read people who actually save a portion of their hard earned dollars). It is very displeasing (to put it mildly) to find out you are being driven to penury and ruin with your own money!
The use of the term “miscreants” (depraved, villainous, or base) is misleading when used in reference to the players in financial services. They are felons – in virtue, if not in fact.
The Pethokoukis piece, while factually accurate imo, hints of defensive posturing as the two titans of terror – Wall Street and Pennsylvania Avenue – duke it out. God made sin by inventing woman.
The incestuous “bonds” (triple play pun) that tie Washington to Wall St are probably too strong to be broken.
And buddy larsen, the financial contributions angle favoring Dems over Repubs must be considered in the context of likely electoral winners. If the Repubs had any reputation left, the money would reverse course. The Repubs are in a trough because the markets malfunctioned, which opened the door to Dem “management”. You can argue the ideological persuasion of those who contributed to the removal of effective market control but in essence they were agnostic players – following the money, not the dream.
(CRA being the great big exception – where were the Repubs? Protesting too much as the proper ladies they were.)
bl: Like the death of western markets and economies and societies and cultures will be the ‘unanticipated consequence’ of never being able to anticipate any consequences at all, because, lets face it, not everybody is equally good at it so it gives brains and character an unfair advantage?
I have to say, I do see that as well – concerted assaults on the markets.
I sort of side with Dave on the strength of American companies – good earnings, strong balance sheets, bottoming unemployment – which means I see a structurally sound upside to USA market growth.
Which means whoever is toying with us has a serious opponent.
Courtesy of the middle class I might add.
an interesting article:
http://www.atimes.com/atimes/Global_Economy/LE07Dj02.html
Public debt – prudence and folly “it is not the level of the public debt but how the debt money is spent that determines its impact on the economy.”
MC, right, debt that generates a risk/reward ratio ‘at the market’ is the fuel of the engine. It’s when the risk is not market but mob, and the reward is not capital but protection, that debt destroys its own value.
GL/154; great post –i agree on the power of the major companies, heck they may be the new states. the middle class IS a serious opponent –it owns property that it wants to usher into a future, and will grimly defend it (i hope!). It centers on the home, which makes this attack on home values all the more demonically deflating in every sense.
As far as those party affiliations of convenience, i’d agree except for the nagging realization that the fact that we just got tricked out of a whole bunch of our finest old investment houses and banks, leaving but two of the former and a special category of five toobigtofails of the latter, that this BOOTB new fact-on-the-ground dovetails so nicely with Marx’s “the end-state of capitalism is monopoly”.
As an apt description of whom is doing the felony theft of property I am sticking to my label of them as miscreants. They are base and heretical individuals and organizations. They are without virtue. And in my opinion are less than human.
I believe the quote goes, “The love of money over all else is the root of evil”.
I am also of the opinion that the institutional longs in the current markets need to make their displeasure known. Time to remove the real money from the game. If the mutual fund, pensions and other real money investors leave. The naked short/derivative players will have no targets and will begin to eat themselves.
Also, can anyone explain to me why there is no Russian representative on the board of directors at the BIS (Bank of International Settlements)? Isn’t the country now run by Oligarchs? There is a People Bank of China rep.
Russia isn’t in the WTO yet, jfs –that may be it.
BIS = WWI reparations…
Russia had ALREADY surrendered to the Kaiser…
AND WAS NOT AT THE REPARATIONS CONFERENCE…
She got nothing.
Ask Poland.
THE NEW GOVERNMENT OF RUSSIA Lenin’s USSR…
NOT so popular in the West.
Why would anyone invite an anti-individualist government to the BIS?
They don’t even believe in money… just ration cards for the neo-serfs, the NEW proletarian boy.
BIS orginal name was german
“The BIS was formed in 1930, the main actors in the establishment of the BIS were the then Governor of The Bank of England, Montague Norman and his German colleague Hjalmar Schacht, later Adolf Hitler’s finance minister. The Bank was originally intended to facilitate money transfers arising from settling an obligation arising from a peace treaty. After World War I”
“During the period 1933 – 1945, the board of directors of the BIS included Walter Funk a prominent Nazi official, and Emil Puhl, who were both convicted at the Nuremberg trials after World War II, as well as Herman Schmitz the director of IG Farben and Baron von Schroeder, the owner of the J.H.Stein Bank, the bank that held the deposits of the Gestapo. There were allegations that the BIS had helped the Germans loot assets from occupied countries during World War II”
http://en.wikipedia.org/wiki/Bank_for_International_Settlements#Board_of_directors
check the board of directors:
Bernanke… uh ?
JC Trichet, the head of ECB, is there a correlation why ECB still serves german interests ?
and a Chinese !
no Russians !
uh, blert, Russia has changed, money is quite the means for investing in western businesses !
Greek Debt Woes Ripple Outward, From Asia to U.S. http://nyti.ms/9YPuvb gthe money flu is a global threat
“Germany (like China) views its high savings and export prowess as virtues, not vices. But John Maynard Keynes pointed out that surpluses lead to weak global aggregate demand – countries running surpluses exert a “negative externality” on their trading partners. Indeed, Keynes believed that it was surplus countries, far more than deficit countries, that posed a threat to global prosperity; he went so far as to recommend a tax on surplus countries”
http://www.prisonplanet.com/can-the-euro-be-saved.html
ohlala, that’s the solution, tax the german products ! how comes none of our clever finances ministers thought of that !