The Pentagong Show

The Pentagong Show
United State of Terror: Is Drone War Fair?

Tuesday, August 17, 2010

Capitalism = Constant War.

The Great Recession is that different from a mild depression?

Double-dip recession.... how is that possible when we've not come out of the first dip?

Oil prices: the more the price of oil increases, the faster anthropogenic climate change accelerates. Burning oil, even hi-sulfur oil from Citgo, is, in the Northeast, being replaced by burning wood in fireplaces as the price of oil has doubled, with barely a comment, in the past year. The ensuing particulate pollution from an ancient fuel source being used by a modern-sized population is having catastrophic consequences as the soot covers snow in the Arctic drastically reducing its albedo factor. Meanwhile, coal, the next dirtiest fuel, is burned in prodigious quantities in both China and the US to generate electricity.

Peak Oil Production: if peak oil production is not a factor in the above problems, why is it that the largest burners of fossil fuels don't burn oil in preference to coal? And not by happenstance, but by policy preference, even as they argue about Cap and Trade?

Unemployment = 9.5%, no it = 22.5%, no it = 9.5% ... which do you believe? Which do you feel is real?

Banks made their outrageous profits only by deceiving their clients and customers and issuing "products" they then sold to suckers. This is called hucksterism, in a folksy milieu, fraud in a legal framework. This is all our banks have left to make profits from. This is all the government has left to collect taxes from. Do you feel recovered yet?

Recovered is also a term used in upholstery. In the present context it is that meaning that is more descriptive of our current economic recovery. Throw a TARP over it and hope that that recovery will fool people into thinking that something has essentially changed when nothing has, even though the economy is in dire need, by its own definitions that were promulgated and forced upon lesser, developing economies for decades, of restructuring, ie a SAP (Structural Adjustment Program) for the saps who believed in ever escalating property values, even as wages atrophied and the industries under-girding the economy that was supposedly supporting those valuations, was dismantled and systematically moved overseas in a matter of decades.

An economy recovered via a TARP being thrown over it has no hope of recovering in the medical sense of systemic health being restored.

I remember that when I was a wee child our family had a sand bank in the back yard. This is the concept most people have, left over from the days of the gold standard, of a bank: a Place of stored value, full and protected. The more people realize that it is neither full nor protected, and the more they realize that there is, in fact, risk involved in putting their dollars in said depositories, risk for which they are completely uncompensated, the less they will be inclined to keep said dollars in the hands of banksters determined to take the value of their money and transfer it to that of their shareholders. Something they are, as are all Corporations operating under the auspices of the United States of America, required to do.

Remember, in ruling for the Ratings agencies of Moody's and Standard Poor's and Filth's, oh, I mean Filch, no, Fitch's, whatever - the third one - the Supreme Court called their rating service protected by the 1'st Amendment's free-speech clause (even though you had to pay to hear it), which means the banks can sell you any product, the insurance companies write any policy (see MBIA's claim that the insurance against Vallejo's default wasn't really insurance, or AIG's Insurance for CDO's with no capital allocated to cover losses, again entire business models completely based on Fraud, backed by the full faith and credit of the US Treasury ... YOU), so if they rated a security AAA, and you bought it, and it turned out to be junk, toxic waste, valueless, the ratings agency can not be held libel for you believing that they provided the service you paid them to.

If that's true of a mere ratings agency, a Bank, whose losses are covered by the FDIC, their gambling debts back-stopped by the Central Bank, which has access to the full vaults of the Treasury and the pockets of the Taxpayer, whereas their bondholders and investors are made whole by duplicity and chicanery, is held even less accountable. Literally, as the Accounting firms that audit them merely change the rules under which Bank holdings of collateral are valued. All under the auspices of those very same banks.

This will be money kept quite literally "on the sidelines", as it is pulled out of the banking sector completely and stored in a safer place under the mattress, a rock in the backyard, in knickknacks bought specifically because they have a nook in which cash can be sequestered where it is deemed safer.

It may not in fact BE safer in any of those places. However, the one thing the banking industry has succeeded in doing is convincing the public of banking's untrustworthy nature. The one thing the free market now understands is that the banksters, by dint of the very free-market dictum they promulgate, are, the public is finally coming around to understand, under no rubric to return money to its depositors. That is unless there happens to be some remaining when they're through with it. Once deposited in their virtual vault, it ceases to be yours, but is, from thereafter, theirs.

The cynical trickle of trickle-down economics, is beginning, but not in the way it was envisioned. It is already showing signs of turning into a torrent as billions are being pulled out of, not only mutual funds, but simultaneously from money market funds and savings accounts. It is not just paying down debt and deleveraging that we are witnessing. There is a loss of trust in our financial institutions more profound than anything I've ever witnessed, not by the underclass, who never really trusted them to begin with, but by the complacent, somnambulant middle classes who have been roughly shaken from their American dream of security to the stark reality that they are to be skewered on the altar of Free Market Economics. They are slowly waking up to the fact that they are the Isaacs to the Free Market's Abraham. Trusting children held in Bernanke's hand that has stayed their execution for the moment, but which is still poised, glistening blade in hand, ready to deliver the deathblow, as the same forces that brought Free Markets reforms to Russia, decimating that population and trimming it by the millions, delivers the same fate to the middle class of the good ole USA.

That is why Mr. Bernanke, the head of a Corporation, a private Corporation, can by mere fiat, declare the value of your money worthless, the risk of your losing it negligible and pay you zero, da nada, zilch, while paying his wholly-owned subsidiaries, the Federal Reserve Banks (again, private institutions beholden to no one but their shareholders), a premium by giving them dollars for nothing which they can then use to buy Treasuries, effectively taking money from the public to shovel it by the boatload into the vaults of banks to pay for the bad loans they reaped enormous bonuses to make, but for which they'll never be paid back.

Those loans, even after the dog-and-pony-show of the Obama stress tests, are worth far less than what the institutions claim they are worth. To such an extent that the whole process is called extend and pretend. Again, we come up to that word that encompasses so much of the banksters' "recovery" plan - Fraud. That is all extend and pretend is: a catchy phrase for: Bank Fraud. On a global, international scale. And not just fraud in the parlor sense of the word, FRAUD in all caps, not only running throughout the system but, more accurately, running the system. The fumes of fraud, by the pronouncement of bankrupt Central Bankers and insolvent Governments worldwide, including the IMF and The World Bank, is all that 's keeping the globalized financial system from undergoing a shuddering cataclysmic collapse.

"Consumer protection", whether presided over by Ms Warren, or Ralph Nader, is something forced down the throats of Corporations, not because they're big bad she-devils, but because protecting profits by exploiting people is what their charter demands of them. If a product, such as tobacco, kills your customers, kills those in the vicinity of your customers, including their children, degrades the soil in which it's grown, costs the State billions upon billions in healthcare costs, and costs other industries, oftentimes right across the street, an additional billions of dollars in lost productivity and health-related costs, that, legally, is not your problem. Your shareholders are richer. And that's a plus, because in the taxes collected, the government is richer (or used to be), so the only entity capable of stopping your killing spree is profiting from it along with you.

Shumpeter trumpeted that the soul of Capitalism is Creative destruction. "Creative" is an adjective, a modifier. The essential sense is therefore that Capitalism = destruction. First of nature, then of societies, as in its latter phases it cannibalizes what has been previously wrought.

But, as any scientist knows, each conversion loses energy to heat in the process. Capitalism depends on a store of wealth that it can cannibalize. Upon the "discovery" of the Americas, it had an entire two continents to feed upon and suck the value out of. The product, in terms of energy, most amenable to extraction and utilization to energize the business environment was, of course, gold, and then silver. Once that was sucked dry, the next target was, naturally, soil, which went hand-in-hand with slavery, and then it was coal and finally was - is - oil.

The rate of extraction of oil was so great, however, that, as predicted by M. King Hubbert, it reached its peak barely 100 years after it's discovery, necessitating a revamping of the entire economy to accommodate such a seismic shift. That was the entire nature of the so-called Reagan Revolution. To rejigger the economy to enable it to extract the value built into it over a generation, that had been meant to serve a larger portion of the economic pie to a larger swath of the population, and instead slowly suck that investment away from the public whose toil paid for it into the hands of a few oligarchs, the upper class, who, the argument went, since they were the Owners, could be better entrusted with it.

Part and parcel of this plan was ultimate destruction not only of American unions, but of the Soviet Union. The access to its enormous oil reserves, with the arrival of Peak Oil in the US, could no longer be foregone. Detente was for the sissified Left. In a race against time during which the huge sucking sound was not just the jobs being moved to third world economies that Ross Perot warned about, but the sucking of the insatiable thirst for oil in the US that must be satisfied. And the place to get those reserves was in the oil-rich Baku of the Caspian Sea and Central Asia. And the behemoth that stood astride that particular piece of geography was the USSR.

That Russia is now the Number One oil producer in the world, replacing the US, which was the Number One oil producer in the world when Nixon started detente with the USSR, is not an accident.

Obama, like his predecessor, insists that we must wage constant War to maintain the peace. What he's really saying, is that since unrestrained Capitalism = Destruction, and the most efficient engine of destruction = War. Capitalism = Constant War.

To further prove this thesis, merely go back to the definition of entropy, the basic law under which the entire universe must bend. It states that all matter and energy tend from a state of higher concentration to one of chaos. So an economic system that dictates that all people should tend to their own selfish needs and ignore others, pushes that tendency to chaos towards its ultimate solution: the chaos of War.

That is what the reality of America translates into. The American Dream, in its real atavistic dreams and puerile fantasies embraces and ultimately worships the nihilistic testosterone-drenched trappings of an overly-militarized Capitalist War Machine. It's baked into the yellow cake.

That is the final unmentionable. Like the economic collapse before it, it will supposedly arrive unbidden to our shores. Who could have foreseen that turning every country inward toward jingoistic exultation of their own Superiority and contempt for International Law could result in Nation against Nation? But when citizen is turned against citizen the only thing that unites them is a common hatred of "the other". And united we will stand. Because the haves and the have-mores know all they have to do is present a common enemy and the have and know nothings will rally to their side and gladly give up everything: their life, their liberty, even their progeny, just so long as they can know they're depriving some alien of it.

Tuesday, August 10, 2010

The Spoils.

SEC Secretary denying regulatory capture.

A USA TODAY analysis finds that, while private sector workers' pay and benefits have stagnated, federal employees' average compensation has grown to more than double what those private sector workers earn. What the data show:

Benefits. Federal workers received average benefits worth $41,791 in 2009. Most of this was the government's contribution to pensions. Employees contributed an additional $10,569.

Pay. The average federal salary has grown 33% faster than inflation since 2000. USA TODAY reported in March that the federal government pays an average of 20% more than private firms for comparable occupations. The analysis did not consider differences in experience and education.

•Total compensation. Federal compensation has grown 36.9% since 2000 after adjusting for inflation, compared with 8.8% for private workers.

Colleen Kelley argues that, "The data are not useful for a direct public-private pay comparison." She's the self-serving  president of the National Treasury Employees Union (NTEU), and believes that, "the compensation gap reflects the increasingly high level of skill and education required for most federal jobs".

Such statements would have been impossible in the days when private-sector Unions really united workers, at a time when government unions were not even allowed. But having colluded in the destruction of unionization in the private sector, the NTEU is now completely complicit in the rapidity of transformation, the frenzy for enjoyment, and the blindness to growing government expense that is crushing the productive part of the economy, to rock any boats in Washington. Just like Municipalities that, despite finding themselves face to face with crushing deficits, will not hear of prudence, of economy, of a calm and respectable existence, the Federal Government prefers to keep up their own useless luxury and continue to hide the real penury of new-fangled financial innovations whence can be derived colossal fortunes, coming into being each morning only to be swallowed up at night.

Passing from adventure to adventure, the Capitol now possesses only the gilded facade of dried up capital: promissory notes now just a broken promise and insincere "sorry". In this period of meagerness and madness, not even Enron, Donald Trump, Bear Stearns, or Lehman's risked their future with greater rashness, nor marched straighter towards every folly and every trick of finance than does the Capitol now, yet Colleen Kelley can say with a straight face that "the compensation gap reflects the increasingly high level of skill and education required for most federal jobs".

The fortunes being made that are the offspring of those federal jobs, in this "free-for-all mark-it-up" economy, seem to be at their zenith. They blaze in the midst of ever-swelling homeless populations like a colossal bonfire. These appetites, let loose by the Bush tax-cuts for the rich, can be satisfied only with the shamelessness of triumph amid the sounds of crumbling cities, as Detroit disintegrates and Facebook's fortunes spring up in six months: real estate crumbles while the ominous thunderCloud of cyberspace rumbles. Overnight Washington has become a sheer orgy of gold and trophy women. Vice, coming from on high, flows through the gutters, spreads out over ornamental waters, shoots up in the fountains of the public gardens to fall down again upon the roofs in a fine, penetrating mist.

And at night, when you commute to your suburb, it seems as though the Potomac drew along with it, through the sleeping city, the refuse of the town: crumbs fallen from the tables, food enough to feed a city sloughed off into dumpsters, bows of lace decorate crotches, false hair forgotten in cabs along with dollars that have slipped out of brassieres and jockstraps. All that brutality of desire and the immediate satisfaction of an instinct flung into the street bruised and sullied. Then, amid the feverish sleep of the apparently unskilled, uneducated workers of the private sector, and even better than during its breathless quest in broad daylight, you can feel the unsettling of the brain, the golden and voluptuous nightmare of a city madly enamored of cash and flesh.

There, the Treasury, embedded in its center, yawns like a Neo-Classical alcove, large enough to accommodate the amorous exploits with trillions of dollars. Here, in this hothouse atmosphere rife with corruption and dank decay is fortune bloomed and insolently displayed. It spends money madly on pure folly; handfuls of bills flung out the window, the Federal Reserve emptied each evening to its last nickel, filling again every night, no one knows how, and never supplying such large sums as when Hank Paulson pretended to have lost the keys.

Only with such a backdrop can the conditions exist for a burgeoning government that for almost two generations has been steered by avatars of small laissez-faire government, claiming that it needs to get out of the way to let the private sector do its work, yet now claim that that supposedly feckless, know-nothing institution that is increasingly sloughing off its most sacred trusts and important responsibilities onto the private sector, is somehow deserving of its dazzling salaries because that same private sector, the one now responsible for carrying out the governments'  responsibilities, is not only poorly educated, but is sorely lacking in skills.

If consistency were indeed the hobgoblins of little minds, Colleen Kelley must need a crane to carry her hypertrophied encephalic grey matter.

Friday, July 30, 2010


S.E.C. Charges Wyly Brothers With $550 Million Fraud ... Wyly brothers....would you invest with them? Plus they're from Texas, the largest criminal enterprise in the country. Like expecting to get balanced views from someone who calls themselves Fox News.

Would you entrust Madoff with your money?

If, as Einstein said, "Compound interest is the most powerful force in the universe", where do you suppose the twerp that imposes ZIRP on the economy is trying to lead us? Zero interest rate policy = zero compound interest = zero growth.

Military-Industrial complex. Since we've systematically taken out the industrial, what it leaves us with is not complex; it's simple, it's The Military.

Market bull while a China shops: Let the arrogant behemoth snort and thrash itself to exhaustion. Since the 9/11 attacks, the US government has done more to destroy US democracy and the US military more to undermine US security than anything any ragtag bunch of virgin-ravager-hopefuls could have dreamed of.

Climate change: The most efficient way to slow down CO2 growth is to slow down its largest perpetrator: Cap that Trade. The elimination of the mere 5% of the global population that consumes in excess of 20% of the fossil-burning, CO2-spewing fuel heating the planet, leaves plenty for the rest of us. Most of the US's citizens haven't made that calculation. Most of the rest of the world has.

Go Ogle Google: The clamor over internet privacy and google spying on everybody is truly mind-numbing when the marching orders of the firm to its employees is right there in its name: Go Ogle.

Homeland Security: People thrown out of their homes and off their land in ever-increasing numbers have no security.

Land of the free: By far the largest prison population on the planet. By both sheer magnitude and percentage of its population.

Home of the brave: Where we conduct war in the Stealth of night against civilian targets and use Predatory, unmanned aircraft to carry out war by assassination.

Build America's Bonds: a borrower is slave to the lender. BAB'll on.

Tuesday, July 27, 2010

The Krugmaniac's "Nospeak".

In this week's The Institutional Risk Analyst's article on government malfeasance, they started with a quote from "Words", a piece by Anthony Judt published in the July 15, 2010 issue of The New York Review of Books. In it he states that "Rather than suffering from the onset of "newspeak," we risk the rise of "nospeak ..."

In his championing of this new genre of obfuscating journalism, The Krugmaniac has been proving himself the master ever since the onset of the financial crisis, but with this week's piece entitled, "Who Cooked the Planet?", he outdoes himself.

Here we have the loudest proponent of Central Government stimulus, all but standing on this desk and yelling More, More, More!, accusing his Washington counterparts of greed and cowardice. The reason? They, (and he singles out John McCain here for special chastising, as he's "
a man willing to sacrifice his principles, and humanity’s future, for the sake of a few years added to his political career") are not taking enough action on climate change legislation.

But Krugman's just doing the same thing as the Senator he disparages. Every job created in the US economy creates an energy hog. It enables another American, whose carbon footprint will thence be 5 X's the size of the rest of the planet's inhabitants, to trundle up to the energy trough and burn more energy, support an energy-voracious, out-of-control military machine, and stoke oil companies to more hazardous areas of discovery and extraction. It is completely hypocritical to yell coward at the Congress (not that he's not right) while simultaneously screaming for more stimulus.

The danger that the world will continue down its insane path to humanity's self-inflicted demise comes not from climate-change-denying fools like McCain and his idiotic Palindromic running mate, Harass Sarah. They're politicians. Their self-interest, corruption, hypocrisy and use of "nospeak" to assure they never get caught in a lie, by simply never actually saying anything, are all in their job description.

The Krugmaniac, however is supposedly an economist and a journalist (although, with that clownish buffoon Ben Stein writing for the same paper and claiming the same credentials, it's hard to hold anybody to account anymore) , and the job of both those titles is to elucidate the issues for the public, not becloud them by spouting nonsense.

The answer to The Krugmaniac's question, "Who cooked the Planet?", is an undeniable, "We did". Call it "The Washington Consensus", "The End of History", "Globalization", "The American Dream", whatever you like, but you can't foist your energy-intensive, carbon-spewing, winner-take-all-and-the-rest-be-damned, capitalist model of resource extraction and capital accumulation-cum-creative destruction onto our entire earthly sphere, bringing our freedoms to them at the point of a gun, and then demurely ask "Who cooked the Planet?" It's like asking "Who Cooked Fallujah?" Gee, I wonder? Who do you think that could've been? Must've been those guys Greed and Cowardice. It sure as hell wasn't moi.

Instead, by pretending to be incensed at the Congress while simultaneously demanding that that same Body stimulate the very economic model that's brought the globe to this hazardous state, and pretending that there's no connection between the two, The Krugmaniac shows himself to be just another man willing to sacrifice his principles, and humanity’s future, for the sake of a few years added to his "journalistic" career.

Friday, July 23, 2010

TGIF: Timothy Geithner is Fatuous

While watching Charlie Rose interview Timothy Geithner the other night, I felt my cheek smart as Geithner gave me a resounding slap.

"The government doesn't create jobs", he told Mr. Rose.

There sits the Secretary of the Treasury, one of the plum positions in the federal bureaucracy, some would say it is the highest post in the President's cabinet, yet the holder of it doesn't consider it his job. That explains so much of what goes on in government. Like any slap in the face, it smarted, but it also left an afterglow, a tingling sensation reminiscent of pleasure as I remembered my post of 8/23/2008, entitled:

GM Drives itself off a Cliff.

In that post I reminded us of the fact that,

"On May 28, 1987, Mathias Rust took off from Helsinki, and, flying at low altitude to avoid radar detection, landed a small, single-engine plane in Moscow's Red Square.

This caused considerable embarrassment to the Politburo, and within a year the entire top echelon of the Soviet military was replaced.

On September 11, 2001, airline jets slammed into NYC's largest towering skyscrapers and into the Pentagon itself, killing thousands and wreaking havoc in not only those cities but to the airline industry and the economy as a whole. Not one government person lost their job."

But, now I see. No one lost their job because, as TG states, the government doesn't create jobs, so quite logically, no one in the federal employ is expected to perform a job function. Their positions are mere sinecures. How else to explain the Secretary's remark? His entire career has consisted of government positions, which, he can sit there and declare on national television were not jobs, which must be the truth, since, instead of falling out of his chair, the journalist Charlie Rose didn't even blink an eye.

Now doesn't that explain everything? Now there's logic to how Reagan can fire the entire staff of striking FAA employees for demanding more money, but after 9/11, GW fired nary a one for not noticing jet planes completely changing course and flying for 45 minutes, heading straight for the twin towers and the pentagon. Well, to lose one Twin Tower is unfortunate, but to lose two sounds like carelessness. For such carelessness, anyone in the private sector would be sacked and never find a job again. But now I see. As long as their keeping the chair warm, and dutifully taking their paychecks, Government sinecure-holders are safe from worry of dismissal, because, unlike a job, they have no actual responsibilities.

That's how Timothy Geithner can sit there, never having held down a job in the private sector, and even as government is the largest employer in the country, and regurgitate his Wall St. buddies' mantra that government doesn't create jobs, with one statement, making all federal, state and city employees, into little more than thieves, leaving the US in a worse state than the USSR was in. There, "We pretend to work, and they pretend to pay us" was the paradigm-du- jour. Here, they don't even have to pretend to work and they get not only better pay and access to union membership they get health care services, pension plans and no worries about peremptory dismissal, all by taking part of the earnings of the poor slobs who do have jobs, but who get none of those benefits. Instead they have to work at least five months of the year in order to provide those benefits to all those who don't.

No wonder everyone wants to get a federal sinecure.

No wonder China has been threatening for many months to replace the dollar as the world's reserve currency.

No wonder our largest creditor thinks American debt should be downgraded to junk.

Thanks for setting us straight Timmy. We can't wait to see how you "fix" the GSE's. But I'm sure it'll be to make sure those hard working stiffs pay even more for the housing of those who rake in more money than they can ever dream of making. Because don't forget, all those poor working stiffs, not only have to pay for all those sinecured positions, they also have to pay to guarantee their homeowner loans, and to pay for their mortgage interest deductions that they make on their over-valued homes, kept at that overpriced value by the illegal machinations of your partner at the Fed.

Just think. Between the two of you (yes just 2 of those federal sinecures, and not the highest paying, either), that's half a million bucks. And over you, Mr. Geithner, must be kept careful watch, because you're a well known tax cheat (

Wednesday, April 28, 2010

Match Point, An American Tragedy: As the Gulf Burns

Jonathan Rhys Meyer's character in Woody Allen's "Match Point" starkly illustrates one of the writer/director's own quips: "...His lack of education is more than compensated for by his keenly developed moral bankruptcy". A phrase that, not coincidentally as it turns out, is also a spot-on description of Clyde Griffiths, the sad, rather pathetic protagonist in Theodore Dreiser's novel of murky emotions and desperate greed, "An American Tragedy".

Although Wikipedia says the movie "borrows heavily" from Dreiser's novel, the more accurate phrase would be, "unabashedly lifts" the entire plot and, via some adept manipulations, modernizes it and makes it adaptable to Mr. Allen's medium of choice.

In Dreiser's novel, Clyde Griffiths is not only related to someone in the higher echelons of society, he even closely resembles his cousin, making his initial employment as a drudge unacceptable to his uncle who encouraged him in his move from Chicago to upper state New York, and employs him, as well as his own son, in his Company. That leads to Clyde's promotion to floor manager, overseeing a workforce composed almost exclusively of women, the rule being, one must not fraternize with the lovely ladies over whom you preside.

Naturally one of the delectables proves irresistible to Griffith's lonely romantic yearnings. And Rhys-Meyers is a perfect Clyde Griffiths, only Allen puts the forbidden fruit out of reach by casting her as the fiancee of his future brother-in-law. From there it's by now almost stock:

The seduction, the pregnancy, the insistence on the part of the woman to have his illegitimate baby, the phone calls, the threatened exposure, the murder, which, as commented on by the police, appeared so haphazardly planned as to make it seem like he wanted to get caught, the police's discovery of a diary kept by the murder victim of which the murderer was ignorant, the confrontation with the authorities, the investigator's confidence that our erstwhile hero is in fact our killer.

But this is not to criticize or harangue Mr. Allen for his uncredited lifting of Dreiser's character and plot, but more to marvel at his directorial handling of Jonathan. For we are confronted here not with the same person who appears in "The Children of Huang Shi", but instead with the word made flesh, as Dreiser's Clyde Griffiths appears, as if produced by alchemy, in the cool, bland exterior of Rhys-Meyers, hiding an amoral, materialist, impassioned pretender to wealth who sees nothing in the upper class personality that makes them any more deserving than himself of all the riches and luxuries they take for granted, but which will always, unless he connives to make it so, remain out of his purview.

No. For me, what caught my eye and made for a strange (stretched?) analogy, was the similarity between Mr. Allen's reaching back into the past for a vehicle on which to ride into the future. The reason I say stretched, is because it made me wonder if there wasn't an analogy there of the current Fed. By placing an "expert", in the form of Bernanke, at its head who was a student of the Great Depression, and who fancied himself capable of steering the economy as though it were a car, it was fancied he could orchestrate an economic crash, (blandly referred to as "demand destruction", in economists' parlance), in order to slow global growth (and therefore escalating oil consumption), but one from which we could emerge badly shaken, but not severely injured.

But why would he want to do that?

For that we must not only believe the DOE and United States military's Joint Forces Command's projections of future oil production, and its inability to meet projected oil demand, but also realize the utter dependency of the globalized industrial economy, not only on cheap energy, but on that cheap energy coming, in large part, from petroleum and its byproducts.

This was an alarm that was sounded by none other than Dick Cheney in the late 90's, yet not mentioned once during his 8-year tenure in the Bush White House. Because then, before it came to light that the reserves expected in the Caspian basin simply were not there in anywhere near the quantities that had been rosily predicted, Cheney believed peak oil production was something that was in a faraway future.

But by the turn of the century all that had changed. To those, such as Cheney, who had an insider's knowledge that Peak Production was rapidly approaching, it was/is tantamount that the public know nothing about it. Because if peak oil production's imminence were known to the public, it would have the same profound effect on their knowledge of the crimes of the Bush Administration, the Financial industry, and the rest of the Superclass, as the Police's discovery of the murdered woman's Diary in both "The American Tragedy" and Allen's "Match Point".

Namely it would lay bare the fact that, just as in the financial industry, where risk has been surreptitiously collectivized, and profits privatized, the risks associated with the onset of peak oil have been SUV'd onto a hoodwinked public that believes the black gold 'll flow forever, encouraging them to take on more and more debt, believing in a glorious future that will pay for it, and keeping the bank accounts of the Superclass expanding, when all along, that smug band of Oligarchs is fully aware that the party's nearing its climax and the oil-filled punch bowl's about to be taken away, leaving the hoi polloi holding a bag of empty promises and unpayable debt.

So unlike Dreiser's American Tragedy, which concludes with the long trial and execution of the murderer, Woody Allen's ending has him getting off scot-free, with someone else taking the blame for his crime. That is how the denouement of our own American Tragedy will end, with those believing that the oil would flow forever, being blamed, like those who took out subprime loans, for their own credulity, and those who blatantly lied to their face not only flaunting their riches, but, just as Wall St is doing now, patronizingly sneering at the rest of us for being stupid enough to let them. Match point and SET.

Wednesday, April 21, 2010

The Financier: Goldman Sacks and Pillages.

The Finance Seers predict we lose.

In an article entitled, "A Backlash in Europe Has Politicians Calling for a Goldman Ban", the WSJ writes that Goldman Sacks (and Pillages), "is in danger of losing business with a key group of clients as a result of the fraud allegations it faces: governments in Europe and the U.S."

Reading that reminded me of something:

In Theodore Dreiser's epic tome "The Financier", he tells the story of Frank Cowperwood, a not-quite rags-to-riches saga of a banker's son who deciphers the financial subtleties of Philadelphia's City Treasury in such a way as to work its mechanism to provide him, and those in government who aid and abet him, with a substantial fortune, lifting them out of a humdrum, and for some, marginal, existence, into undreamed of luxury (well, not quite undreamed of).

Dreiser explains how the city of Philadelphia allowed the Treasurer to lend quite freely from the City coffers to certain brokers and dealers that sold the City's debt, and how our hero, Cowperwood, by manipulating the market on 'change, was able to get the City's debt to sell at par, whereas before his manipulation, it could be brokered for 80%, at most. This legerdemain left the Treasurer breathless and quite agog at the Wunderkind he'd unearthed. And because the Treasurer was allowed to make loans at no interest, since, for some reason, the city allowed those banks it used as depositories to return any amount allocated without paying interest on it, the more Frank Cowperwood could leverage the amounts loaned to him, the more money he could make, and instead of paying the City the interest, he could pay the Treasurer, say, 2%, and everybody's happy with no one the wiser.

So for years Cowperwood ransacked the Treasury's funds, buying up streetcar lines, setting up dummy corporations and using wealth to create more wealth, not of course, for the Commonwealth, even though it was in fact the source of his success, but always as it ever is, to pad his own pocket and those he knew in government who were allowing his defalcations to occur.

He became more and more extended, using larger and larger loans to buy up more and more of the public's property for his own use, using the very same public's funds, until one day in 1871 the City of Chicago caught on fire, and the entire financial district was transformed overnight into a smoldering pile of ash.

Now up to this point Cowperwood's ascendancy did not go unnoticed amongst the city's denizens, but because "all of the newspapers were so closely identified with the political and financial powers of The City,  they did not dare to come out openly and say what they thought. It would not be good for Philadelphia, for local business, etc, if they were to make a row. The fair name of The City would be smirched. It was the same old story."

Because the devastation in Chicago was so complete, it resulted in a concatenating failure of insurance companies reaching as far as Philadelphia and exposing the huge risks sloughed onto the public by the profit-hungry banks and brokers ... it was a time, "when all the little rats and mice were scurrying for cover because of the presence of the great, fiery-eyed public cat somewhere in the dark, and only the older and wiser rats were able to act."

However, while the Treasurer's face "was grayish-white, his lips blue", Cowperwood never lost his head; that "thing called conscience, which obsesses and rides some people to destruction did not trouble him at all. Good and Evil? Those were toys of clerics, by which they made money... Something - he could not say what - it was the only metaphysics he bothered about - was doing something for him" (as he went about doing God's work?).

Yes, in the parallel that's evident here, the citizen is now, thanks to our illustrious Supreme Court that bestows on an amoral fictitious entity the same rights but none of the responsibilities of a person, Goldman. The Goldman's that is indeed culpable of all the same crimes as Cowperwood, but will pay none of the penalties - you cannot send a Corporation to jail, which is where Frank Cowperwood ends up, as does the Treasurer, both of whom are thrown under the bus by the true reigning financial powers of the City, who walk away unscathed.

Before he passes sentence on our feckless duo, the judge addresses the Treasurer thus:

"The misapplication of public moneys has become the great crime of the age. If not promptly and firmly checked, it will ultimately destroy our institutions. When a republic becomes honeycombed with corruption its vitality is gone. It must crumble upon the first pressure.

"In my opinion, the public is much to blame for your offense and others of a similar character. Heretofore, official fraud has been regarded with too much indifference. What we need is a state of public opinion which would make the improper use of public money a thing to be execrated. It was the lack of this which made your offense possible.

"The people had confided in you the care of their money... a high and sacred trust. You should have guarded the door of the treasury against everyone who approached it improperly. Your position as the representative of a great community warranted that."

Hopefully you've noticed that those words, although in much need of today, are not being, and will not be, uttered. Instead, the head of the Central Bank is running the Fed's balance sheet the same way that Citi and other TBTF institutions ran their books: like a SIV, and doing so aided and abetted by the very Treasury that's disregarded its "high and sacred trust", and has, instead of "guarding the door against everyone who approached it improperly", has flung it open to be ransacked by fraudsters and embezzlers.

And, now that the WSJ, which was one "of the papers that were so closely identified with the political and financial powers of the Citi that they did not dare (care) to come out openly and say what they thought (knew), for years after the malfeasance that they trumpeted as American Exceptionalism so loudly during the boom, comes out to throw Cowperwood, oops, I mean Goldman's, under the train to hide their own and government's and OUR involvement in this confederacy of dunces' dance that even the Citi's Prince couldn't sit down from until the FED stopped playing the music.

Yes the FED. Because, without the backing of gold, it is only the full faith and credit of the Sovereign state of the US Government that backs our dollar. Banks are no longer the independent financial institutions that we all like to keep on pretending that they are: they are mere vassals of the Fed, completely lacking in resources until the Fed waves its magic wand and creates them. This while they promulgate dogma advocating "free markets" and idol-worshiping "entrepreneurship", as they work to undermine both.

City officials then, government officials on all levels now, were completely enmeshed in the financial legerdemain taking place. "The Financier" should be required reading in every high school in America. Instead we have them reading "The Great Gatsby" and "Grapes of Wrath", illustrating the perpetrators and the victims, leaving our students without a clue of the methods used by the Gatsbys of the world against the Judds. These methods are brilliantly and clearly set out in Dreiser's book, which, if read, would prevent the Superclass from using the same old tricks with no one the wiser, except the Chairman of the Fed who instead can stand in front of the citizens and claim he never saw the largest financial disaster of the century speeding down the tracks, coming straight at him with both the visibility and the inevitability of a locomotive, at both him and the people it was his bailiwick to protect. He still got re-appointed.

While everyone's playing "Monopoly", Benron Bernankie knows that the real action is the game of "Risk", namely, how to hide it so you can dupe others into taking it on unbeknown to themselves: it used to be called fraud, now it's called "financial innovation".

And by perpetrating it the agents of the federal government, agents to whom we pay generous salaries and benefits, unavailable to those toiling in the private sector who pay their wages, supposedly in order to keep temptation at bay, have squandered the trust of the world (but not ours: Bernanke, Summers, Geithner, Rubin ... all still in power) and you will reap the whirlwind because of their treachery, while they, as with the Goldman case, will use sleight of hand to slough the blame onto their agent, that, as in Greece, merely did their bidding, making the Goldman all the richer and us that much poorer.

Tuesday, April 20, 2010

Atlas Mugged: Playn'd Brand of EconTerrorism.

In an article posted on Yves Smith's (author of "Econned") blog, "Naked Capitlism", written by Marshall Auerback, entitled: "Troubles in the Eurozone - Will the contagion affect the US?", he states that, "The President should be using his position of influence, and his considerable powers of oratory, to change public perceptions and explain why these deficits are not only necessary, but highly desirable in terms of sustaining a full employment economy."

Oh please. There is no such thing as a "full employment economy", and if there were, the Fed (and consequently Central Banks all over the globe, specifically, the ECB) has been actively promoting a monetary policy completely at odds with full employment, a policy it cogently refers to as anti-inflationary.

So what Mr. Auerback is suggesting is that the President should jettison any scruples he has and simply come out full-bore with complete lies.

What the financial crisis and its relatively benign effects on the Asian economies should be teaching the West is that industrial mass-production is now completely at odds with industrial mass employment and engenders suppressed wages via cross-border wage-arbitrage. Both India and China have huge reservoirs, (as measured in hundreds of millions) of forced-labor, poverty-stricken, homeless waifs working 12-hour days and mired in interminable hopeless poverty and life-crushing endless toil, that serve as human energy reserves. This is the New Economy the Neo-Liberal regime has fostered and - behind closed doors, as they face the specter of peak-oil production - embraces.

Public and private debt sustainability has exploded as a serious issue in advanced economies, most notably in the eurozone’s countries of Portugal, Italy, Ireland, Greece and Spain—but also in many larger OECD economies, including the U.S. and Japan. These issues stem primarily from a loss of competitiveness, high wage growth and labor costs which outstrip productivity, a nefarious Banker cabal, and undisciplined (to put it kindly) fiscal policies. All of which grew to staggering, unsustainable excesses during the very years the US was attacking sovereign nations in order to bring them our Friedmans (Milton, Thomas and George).

As we celebrate the 40'th anniversary of Earth Day, we should look at the sobering consequences of forcing a Capitalist society to pay for the externalities of their industries' behavior: it drives those industries off-shore where they can influence central governments better. It is no coincident that it was Nixon that "opened the door to China" the same year he instituted the first Earth Day. A dictatorship beholden to the Capitalists for its economic growth, and therefore preferring to shoot its citizens down in full view of the world to letting them think they have the least iota of voice in what "their" government does is much more in keeping with Freidman-ite economic planning than any so-called Democracy does.

So by using workers' pension savings to relocate industrial production to economies that use the power of their totalitarian regimes to suppress wages, ignore environmental degradation and their attendant costs, and consider health burdens to a coughing, asthmatic population to be the burden of the workers, we've shown that a blighted life-expectancy is more desirable than years of no-growth agricultural hard toil and poverty. The way we've seen the Atlas Mugged by Globalization is in no way accidental.

So it should be abundantly clear, from the actions of the Fed and by the Health Industry debates, that the radical Capitalism advocated by the Friedman School of economics that has driven the West for the last generation has no room in it for housing, Health-care coverage, nor education for a middle-class society. All the dynamics of the so-called innovative Neo-liberal regime are toward ensconcing a self-appointed elite class over the rest of society whilst draining the output of Labor into their own off-shore, tax-sheltered bank accounts. So that contagion he speaks of, it should be quite clear, has already occurred; but it went the other way around.

This is what Mr Auerback believes the President should indenture our children to preserving by "using his position of influence, and his considerable powers of oratory". With such claptrap is the road to war paved.

Wednesday, February 3, 2010

Obama Hitches a ride on Volcker's Vagon.

Since I couldn't put it better myself, I thought I'd use Clive Crook's logic (yes, a financial reporter who's name's Crook ... who says there's no irony left?):

"Suppose Goldman Sachs were to comply with the Volcker rule by relinquishing its bank status (which it adopted after the crisis was upon us, with the authorities' blessing, to avail itself of the full range of assistance). When the next crisis comes round, would the Treasury be able to let Goldman fail? The Lehman experience answers the question. Lehman was not a commercial bank. If Goldman, having reverted to non-"bank" status, could not be allowed to fail, what would the Volcker rule have achieved?"

Precisely. Even as President Obama mouthed the terms of the so-called "Volcker Rule", the obvious uselessness of it, to anyone who followed the shenanigans at Treasury and the Fed during the denouement of Le Debacle could clearly see, it was nothing, did nothing, changed .... absolutely ... Nothing. As stated in the preceding paragraph, Goldman Sacks America was already a non-bank, they changed its status specifically so that they could inject taxpayer funds and put the American taxpayer and the US's Sovereign credit-rating at risk and then to underwrite the outsize bonuses and salaries that the executives at Goldman's had, yes, literally Sacked, leaving the Company without the necessary capital base to adequately cover their insatiable greed-driven speculative bets.

And now with a nod and a wink, the President stands in front of the country and purports to indemnify the system against a recurrence of the crisis by doing no more than putting us back to the situation where these sharks can again run free to maul and savage the financial system for their own aggrandizement while simultaneously debauching the very system on which their feeding frenzy depends. This is the height of cynicism, as it depends, not only on the government simply pretending it's doing something, but on the reliance on an utterly stupid electorate.

It does for the financial "industry" what stumblebum Benron Bernanke's doing over at the Fed for the housing industry: propping up a failed Ponzi scheme to re-energize profits so as to enhance federal revenues (all those bonuses are most assuredly NOT tax-deductible).

In Charles Dickens' "Martin Chuzzlewit", when called upon to paint the American Eagle and asked how he would do so, responds, "I should draw it like a bat for its short-sightedness, like a bantam for its bragging, like a magpie for its honesty, like a peacock for its vanity, like an ostrich for its putting its head in the mud and thinking nobody sees it....

....and like a phoenix for its power of springing from the ashes of its faults and vices and soaring up anew into the sky!"

But right now our Phoenix is teetering on the brink of insolvency, like so many other municipalities and States in the country, who also depended on constantly growing tax revenues from property owners who overpaid for houses they were assured would keep going up in price. Government on every level, as well as businesses, shamelessly betrayed the American people in order to pad their own pockets. This is the paradigm which Obama's desperately trying to resusitate. The only place tieing us to Volcker's Vagon will get us is Barrack to the Future.

Tuesday, February 2, 2010

War: The American Way of Life That's not Negotiable.

The U.S. Senate has voted to raise America’s statutory debt ceiling to $14.3 trillion. The national debt now equals the GDP, and is growing at a much faster pace. This will force the Treasury to borrow more money to both service existing debt and pay for this year’s $1.3 trillion annual deficit. With Ben Bernanke confirmed for another four-year term as destroyer-in-chief of the U.S. dollar, the plan of the Maestro is apparent by looking through "The Eyes of Laura Wiemar":

Adapted From Richard Hughes, "The Fox in the Attic": (italics mine)

Consumption has always to be paid for. Their War has been very conspicuous consumption but there has been virtually no war-taxation to pay for it on the nail. Thus there was nothing really mysterious about this present exhaustion into outer space of every last cent's worth of new value as fast as it was created: this was a kind of natural, belated capital-cum-income levy - though levied now not equitably by any human governance but blindly, by the Market itself. Of this rationale however the sufferers had no inkling. They could not understand their suffering, and inexplicable suffering turns to hatred. But hatred cannot remain objectless: such hatred precipitates its own THEY, its own someone-to-be-hated. In a hell devoid of real ministering devils the damned invent them rather than accept that their only tormentors are themselves and soon these suffering people will see everywhere such devils, consciously tormenting them: Jews, Communists, Capitalists, Catholics, Cabbalists, Homosexuals - even their own elected government. Millions of horsepower of hatred have been generated, more hatred than the real situation could consume: inevitably it'll conjure its own Enemy out of thin air.

The author's writing about Germany between the Wars. This is what "The Maestro" Greedsphan (a la Pitt in England during the first American Civil War, also known as The Revolutionary War) and GW conjured up. The price would be paid, but not by taxation; and when the pound of flesh was being exacted it would be by inchoate forces few would understand or correlate with the method devised for paying for the Iraq misadventure, and would fit in nicely with the Bush mantra of "plausible deniability". Because, although "the sufferers would have no inkling" of what has befallen, the Fed and the Bush administration knew exactly what the reasons were for this inevitable exacting of the pound of flesh overdue an economy bent on consuming the products of an impoverished work force whose own consumption was kept dampened by the totalitarian grip of a Centralized Government an ocean away. This strategy went hand-in-hand with the "cakewalk" fantasy of the Iraq War. So people's reaction tended to be 'as if' they were now at war rather than 'that' they were at War: almost more appropriate to make-believe than to belief.

This same paradigm of neglecting any form of planning or reining in of consumption, but instead stoking it, will have the same dire effects on the economy that the Wars are having: wringing reality out of it by catastrophe, so that no one will have to be held accountable. This is what conservatives mean by let "Freedom" wring. As the Chinese economy, where manufacturing accounts for 40% of GDP, continues to grow at 10% per annum, ours continues to shrink, while using 4 times their energy input in terms of just oil burnt, meaning that, whereas the Chinese have a balance of productivity vs consumption, the USA has a declining ratio, wherein the percentage of energy inputs into the economy produces less and less currency-earning production, ie, leaving no means to pay for increasing energy consumption save by borrowing. No one in Congress or the Executive has said one word as to how to redress this mushrooming imbalance. It is simply not discussed, because, as both The Bush and Obama administration have declared, "The American Way of Life is not Negotiable". What that assures is that the car-driven, militarized economy, in which there are no real civilian employees, as all aspects of the economy are suborned to militarization, will not even bother pretending to disguise itself any longer: without continued and escalating levels of Military expenditure, the US economy smashes into the brick wall erected by stoking global overcapacity and continued workforce impoverishment.

The similarity to the financial meltdown can be made apparent by using an analogy to the USAIR aircraft that was forced to land in the Hudson River. Just as the pilot, using his goose down control, could've kept the geese from flying into his engines, but didn't bother, as he believed himself astute enough, and his engines powerful enough, to not have to consider such trivialities as a flock of fuckin' geese, so Bernanke, at the helm of the world's economic engine, believed its resiliency so strong, and his own stewardship so masterful, that his "subprime crisis can be contained" attitude convinced him to steer right into the turbulence.

Then, having brought the economy to its knees, without wrecking the ship and killing all the passengers, he considered himself to have "Saved the World". But it is precisely that attitude which caused us to fly blindfolded into danger in the first place, and although we've survived the calamity, we have not emerged unscathed, only he has.

And now, so sits the Military. Coyly referring to our gargantuan War Machine as "defense", we brashly drive it through barbed wire, over Sovereign States, through International Law, oblivious of any weakness, as any deviation from The American Way is simply "Not Negotiable". Then when the inevitable blowback comes, we are already prepped in the language of Hate. The They only awaits an explosion our own policies will cause, but that will have the plausible deniability we've come to love almost as much as ourselves.

Friday, January 29, 2010

AIG: Americans' Income's Gone. Now THAT's Class Warfare.

Following President Obama's speech, we heard the usual Republican accusations that the President was provoking "Class Warfare". But isn't that what the USA's vile version of Capitolism is? Can't even the tunnel-visioned GOP see that the Supreme Court had just crowned The Superclass's victory with their adjudicated laurels by granting money the status of speech, the Corporations with the status of "persons", and then declaring that said persons could not be constitutionally limited in their "speech", ie spending?

The true captured nature of the Democratic Party, in not crying this blatant contradiction from the rooftops, is thus made manifest.

Meanwhile, even as the Supremes call money speech, and the near collapse of a number of financial institutions, brought about by the Superclass's reckless asset-striping, and insane leveraging and transformation of the Fed into a shill for their mantra of "housing prices never go down", resulting in the near-collapse of the entire global financial system and unrepairable damage to the reputation of the US banking system, and leaving the working class without jobs, the secrecy behind the decision to bail out AIG is allowed to fester.

Free speech is now sacrosanct for the Corporations, but the rest us have to pay for it . Just as the "Free"market, means one in which the Superclass gets to arrange the economic system so as all its profits flow to them, they decide what is free speech and what is not. And, as the revelations about the legerdemain and financial shenanigans that went into the federal government commitment of billions upon billions of taxpayer dollars into making good AIG's speculative bets on debauched financial instruments they still cynically refer to as "securities", is most decidedly what is not. To get that information is going to cost plenty.

David Reilly at BusinessWeek in an article entitled: Secret Banking Cabal Emerges From AIG Shadows, and referenced on, details the Federal Reserve Bank of New York's role in what many in Congress believe was the New York Fed’s involvement in the attempt to cover up AIG buyout details and obfuscate the identities of the parties who benefited.

But we are at War. Pursuant to the Patriot Act, any citizen, or newspaper, that gives solace to the enemy, (and investigating the financial system that supports the Corporations that provide the wherewithal to support the troops and provide the armament for them to kill our "enemies", is doing exactly that), is suspect at best; treasonous, if they persist. So Corporate bribes, now considered free speech, since they grease the wheels of commerce and helped bring the system from the brink of global financial collapse, are most definitely under the rubric of "National Security", no matter how you cut it.

Get used to it. Americans' Income's Gone. And if you try to expose exactly why, you may just find out how, although physically incapable of actually being a patriot, a Corporation is much better situated to put on a Patriot act than an individual trying to do his patriotic duty and expose the malfeasance of those who can afford legions of lawyers to line up against him.

So in a sense the Repugnicans are correct. When one side has been so thoroughly routed, the War is over. And because the War's over there is no longer a Class War, so President Obama is inciting Class Warfare by rubbing salt in the wounds of the completely prostrate losers, since the Superclass has already won, and there's nothing the other side can do but utter a feeble denouncement of "no fair".

Thursday, January 28, 2010

Financial Planning in the Cigarette Economy.

Financial Planning now amounts to no more than fueling the Wall St. Superclass that's been empowered by Washington to control your money until you need it, when it becomes obvious it is actually their money, always was.... Like health insurance that you pay for at work, for thirty years, which, once you're in your 50's, you're laid off (part of the plan, BTW), the health care ends, and that tens of thousands of dollars You've sunk into insurance is just vapor: the money's gone, the insurance's gone, and soon you're gone. Perfect financial planning ... Wall St.-style.

From financial experts and economists of real brick and mortar, not the Bernanke-type academics who have a formulated plan that no amount of real world data will change, the consensus is that the deleveraging of America and much of the global economy will trump everything else. So any financial planning that you do on a personal basis is doomed from the start. Think of it this way: a citizen of the Soviet Union in the 80's could do as much planning as she wished, but when the US decided to destroy the economy of that Communist nation, in order to gain access to the (Way overestimated) resources of the Caspian region, it destroyed all the hopes and financial planning of every Soviet citizen.

Today, having fallen into the same trap, which it now boasts it used to bleed the Soviet economy: an endless quagmire of War in Afghanistan, with a dollop of Iraq, and soon to be Pakistan and Iran, for extra measure, the US has dug itself into the same pit, and has neither hope nor plan for escape. The difference is, of course, that the US entanglement was/is a planned entanglement devised by a deranged Superclass of elite oligarchs of self-appointed CEO's of defense Industry (which now includes Burger-King and Starbucks, as they rake in billions from lucrative contracts on US military bases) and Financial TBTF conglomerates and Pentagon Generals.

So, think of the "New Economy" as the "Cigarette Economy": sucker your citizens while they're young into consumption that feels good and gives them a rush for the moment but sucks away at any hope of healthful longevity, leaving a populace that gets to their 50's and then rapidly dies off as they're thrown out of jobs, off health care rolls, and whose pension plans dematerialize into bankruptcy before their eyes.

Perhaps the only way out is to make yourself into a business. Even as the atmosphere has turned decidedly deadly for individuals, it is extremely pro-business. Find out what you're good at, (or bad at for that matter: can you say GM, BofA?), and incorporate. Since all the growth in the economy now comes from The State, make it a product or service that the State needs, the most profitable and lucrative are those bent on destruction, and grow from there. Then just light up and inhale the deadly fumes ..... ahhh now You too are Milken it.

Friday, January 15, 2010

What was the Real Third Target on 9/11?

Worldwatch Institute's president, Christopher Flavin, as quoted in an article in the Guardian, entitled "US cult of greed is now a global environmental threat", writes: "As the world struggles to recover from the most serious global economic crisis since the Great Depression, we have an unprecedented opportunity to turn away from consumerism. In the end, the human instinct for survival must triumph over the urge to consume at any cost."

First of all, it is only NOW an environmental threat? Helloooo!

But mostly, his, one can only assume, cynical, statement, that we have an unprecedented "opportunity to turn away from consumerism", is hilarious. Every step taken on every continent on the globe, has spurred the productive capacity of the underlying private enterprise infrastructure to force the hand of every human on the planet to greater and greater consumption. What does Mr. Flavin think "government stimulus" is meant to stimulate? Intellectual discourse? Art appreciation? Love of nature, or love of books or love of the study of the wonderful variety of creatures that co-inhabit our globe? These are all faggie, commie, pinko, pursuits long derided and severely punished by social isolation and ridicule by the great consumer machine called the USA.

Upon visiting the Phillipines, the investor adviser Tony Sagami, of Uncommon wisdom, raved, "The 12th most populous country in the world is dotted with skyscrapers, BMWs, Starbucks, construction cranes, and luxury stores." If this is how success is measured by someone from the Empire, that's how Everyone, especially poor Pillipinos, are going to measure it.

“China’s retail sales grew at the fastest pace in more than two decades in 2009 as government stimulus spurred demand for home appliances, cars and electronics in the world’s most populous nation."

NO demand increase for books, art supplies, hobby and crafts paraphernalia. The entire push of the stimulus from governments everywhere are for energy-intensive manufactures, not only in the production of the products themselves, but energy intensive in their use. Big-screen TV's eg, often use at least 4X's the power of the ones they're replacing. Utter passivity and nonchalant laziness are signs of prosperity and success, while actually working is seen as an indication of failure and stupidity (who but poor, stupid Mexicans would actually go out and work in fields sowing, tending and picking food?).

As the British elderly start buying encyclopedias, to keep warm by burning them instead of logs in their fireplaces (another increasing source of sequestered CO2 being released to the atmosphere), it's totally ignored that the "there is no such thing as Society" attitude of the Reagan-Thatcher Mafia of plundering the resources of ones country as a right, using taxpayer dollars for exploration, then shuttling all the profits to a smaller and smaller "entrepreneurial" elite of criminals, just fell to the ground with a resounding crash.

Thus has the North Sea been left with dwindling oil reserves now that the price of that resource fetches north of $80/bbl. But it was sold off, the new supply having flooded the market thereby dropping the price to $10/bbl, where it was when GW Bush took office, leaving Great Britain scrambling for resources and capital now, a mere generation after having tapped a bonanza in its own backyard.

Any attempts to slow the extraction of the North Sea oil would have been/were crushed. We couldn't be left dependent on a bunch of sheiks. No. How much more intelligent to sell off at a discount the entire legacy so as to enrich the aristocracy and then leave the rest of the non-entities, for if there's no such thing as society, that's all we are, to be dependent on that same bunch of sheiks, whose reserves would now have been that much smaller, and the UK's that much larger.

The effect has been to allow, per Max Keiser (“Goldman Sachs Are Scum” | zero hedge.) :“They are literally stealing a hundred million dollars a day. Goldman Sachs is stealing every day on the floor of the exchange. They should be in the Hague, they should be taken on financial terrorism charges. They should all be thrown in jail”. (

He declares during his jeremiad that the crash on Wall St has caused, continues to cause, more collateral damage than the attacks on the WTC and Pentagon.

In other words, what Keiser is saying, that no "patriotic" American wants to hear, is that the attack gave the US denizens a chance to see exactly what was being done to them and by whom. Instead, they watched, no cheered, as the very enablers of the attacks literally wrapped an enormous flag around themselves and the NYSE. As patriotism is the last refuge of the scoundrel, Wall St. brazenly announced their true nature, and all were blind to it.

"Yes, we're scoundrels, but we're YOUR scoundrels," that flag screamed, as they feverishly set out to step up, aided and abetted by their lapdogs at the Fed, their War against the Dollar and the American people. Because, yes, that was the third target of the terrorists on that sparkling day in September. The third undemocratic institution they targeted was the FED, not the Congress or Whitehouse, which at least keep up the facade of democracy. But Wall St, the Pentagon, and the Fed are completely unanswerable entities, with their own cultures, all sharing only one thing: complete disdain and contempt for the masses they purport to serve. All three of these completely undemocratic institutions serve only the Superclass. And given their position on top of the power pyramid, that means, so do we.

So as Max Keiser shouts that Goldman Sachs steals every day, his words'll fall on deaf ears, and the response from GS'll be a nonchalant Cheney-esque shrug of their shoulders ("So?"), as they ask, "Well, what did you think we were doing? That's what Capitalism is you fools."

And, no, Mr. Flavin, the human instinct for survival will NOT triumph over the urge to consume at any cost, because the power to change that is not in our hands. It is in the hands of the Superclass ( David Rothkopf's "Superclass: The Global Power Elite and the World They Are Making") that'll be meeting soon in Davos again, to celebrate another year of their ascendancy over the rest of the cowering, blighted, mass of humanity whose ability to do anything else but consume has been all but destroyed.

The twin tower of government deficits and massive misallocation of private capital will continue to dwarf any attempt to change them until environmental degradation and resource constraint brings them crashing down on our heads, while the Superclass sips their martinis and shuts the gates of their tax-payer-funded guarded compounds until the dust settles and they venture out for their next bout of pillaging.

Friday, January 8, 2010

Big Ben's Time is Up: selected quotes from Ben "The Dice-Throw" Bernanke.

Bernanke's logic is the Best Argument for Abolishing the Fed. Big Ben "The Dice-Throw" Bernanke: "the magnitude of house price gains seems too large to be readily explainable by the stance of monetary policy..."Yes Ben, that's why it's called the baby BOOM generation. Because of the MAGNITUDE of the demographic. That alone would suggest that reducing the interest rate on their safe allocation of funds was/is (as stated by your own Fed in explaining it's current 0% policy) engineered to force them out of those safe instruments, in a scramble for yield by fund managers, into more risky assets, then, by describing those risky assets, both housing and equities, as safe ("house prices have never gone down on a national scale", except during the great depression", now that ends with an 's').

“The Federal Reserve did not do all that it could have (ie did NOTHING) to constrain excessive risk-taking in the financial sector in the period leading up to the crisis,”

"U.S. house prices have risen by nearly 25 percent over the past two years," noted Bernanke, while chairman of the president's Council of Economic Advisers, in testimony to Congress's Joint Economic Committee. But these increases, he said, "largely reflect strong economic fundamentals," such as strong growth in jobs (there was in fact, no growth in jobs), incomes (ditto - no growth, all the growth in the economy was coming from people taking out HELOCs to draw the "ghost equity" out of their homes, much like borrowing on margin as the value of the stock market rises, and a strategy highly recommended by the Fed who, of course, knew the extreme risk involved in transferring that strategy to an asset such as property which is much harder to sell into a deflating market, hence the cheer-leading of the Goldilocks Economy where house prices never go down) and the number of new households (another figure bloated by ever more people being encouraged to take out loans to become members of "The Ownership Society").

So even as Benron decries Congressional oversight for the oligarchy known as the Fed:

Ben S. Bernanke does not think the national housing boom is a bubble that is about to burst, he indicated to Congress last week, just a few days before President Bush nominated him to become the next chairman of the Federal Reserve.

Federal Reserve Chairman Ben Bernanke said Thursday that there will be "significant losses" associated with subprime mortgages but that these losses should be regarded as "bumps" along the road of market innovation.... AhHAHhAHAHA. Let's read Galbraith: "All financial innovation involves, in one from or another, the creation of debt secured in greater or lesser (do you think we could say 'subprime' would mean lesser?) adequacy by real assets."

"The DiceThrow": "Banking organizations of all sizes have made substantial strides over the past two decades in their ability to measure and manage risks.”

Benron: “By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also REDUCE THE VALUE OF A DOLLAR in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services.”

Let's ask Galbraith again: "When banks (in this case, Fed Chairman, "The DiceThrow", Bernanke) discovered that they (He) could print bank notes and issue them to borrowers in a volume in excess of the deposits in the banks' vaults, there was no seeming limit to the debt that could be leveraged on a given volume of hard cash. A wonderful thing." Yet we think we're in a position to call China a currency manipulator?

Ben "The Dice-Throw" Bernanke told lawmakers Tuesday he expects the downtrodden U.S. housing sector to improve by the end of the year,

"We will continue to formulate policy to guard against risks to our dual mandate to foster both maximum employment and price stability.” Continue? When did the Fed, during "The Dice-Throw"'s tenure, do either?

"The civilian unemployment rate is expected to finish both 2007 and 2008 around four-and-a-half to four-and-three-quarters percent."

Feb '08:

"I expect there will be some failures” of smaller banks. “Among the largest banks, the capital ratios remain good and I don't anticipate any serious problems of that sort among the large, internationally active banks that make up a very substantial part of our banking system."

"Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost."

"Many homeowners might have saved tens of thousands of dollars had they held adjustable-rate mortgages rather than fixed-rate mortgages during the past decade, though this would not have been the case, of course, had interest rates trended sharply upward" ... the Fed shortly thereafter started their "baby-step" interest rate increases to as high as 5 1/2%, intending, per "The Dice-Throw"'s statement in defense of his idiocy, to raise them, as the "Taylor rule" suggests, to 7 or 8% before stopping.

As the master of “activist” monetary management, Mr. "The Maestro" Greenspan’s reign at the helm of Fed oversaw a move into uncharted territory with respect to marketplace interventions and manipulations. What was the instrument of this manipulation? Interest rate policy, the only lever available to the Fed that Benron now denies has any effect.

"A particularly important protective factor in the current environment is the strength of our financial system…our banking system remains healthy and well-regulated,…"

"I have no particular regrets. The housing bubble is not a reflection of what we did, as it is a global phenomenon."

Alan "The Maestro" Greenspan, November 23, 2007

“I was not going to be the Federal Reserve chairman who presided over the second Great Depression,” Ben Bernanke told PBS .... note that's in the past tense.

"It wasn't to help the big firms that we intervened," argued Mr. "The Dice-Throw" Bernanke as he discussed intervening to help the big firms.

This would be funny if it weren't so dire. But let's look at the irony instead. The Fed has a dual mandate: full-employment and keep inflation from destroying the monetary system. It long ago gave up on full employment, as it is inflationary, and it is now actively working, by its own admission as justification of its 0% Fed funds rate, to create inflation. In other words, there is no need for the Fed, by its own logic it should be abolished. But as Galbraith says, "Those who are involved never wish to attribute stupidity to themselves."

Let's get it straight, since we're stuck with idiots in high places. When the Fed keeps interest rates at 1%, while inflation rate is even a modest 4%, that's a negative 3% on savings accounts. Meanwhile, that same policy that keeps savings accounts paying Real negative rates, pushes nominal housing appreciation up by 25% in 2 years. What that does is force people to take risk they otherwise would not, as it makes saving money for your retirement absolutely hopeless. Every dollar you save starts losing its value immediately. The only way to have any growth is to take those savings and plow them into an asset that appreciates over and above the inflation rate. Because, as Einstein said, “The most powerful force in the universe is compound interest”, but he forgot to mention that the most powerful countervailing force in the universe is compound inflation, that sucks the value of your money toward zero by the time you go to spend it (as we'll all see in the not too distant future).

"The Dice-Throw" Bernanke is a liar. If interest rates had nothing to do with the housing bubble then, then they have nothing to do with housing prices now, and so they should be raised. What do you think the odds of that happening are? The banks should be required to pay an interest rate to their depositors of at least what the Fed's paying them to park their reserves. If this a "free market" economy, can you please tell me where I can put my savings outside of the banking system, besides under my mattress? Why is there no competition for the most fundamental of needs: a safe haven for one's savings? Instead we are left with "The Dice-Throw" economy lorded over by a liar and a fool whose sole intent is to force savers to take their money out of bank accounts and place them into the Casino known as the wailing Wall St. Wall St. then takes those funds and does, guess what? Invests in the regions of the world that they know are experiencing stronger economic growth than the U.S.:
46.0% South Korea
53.4% Thailand
57.9% Vietnam
58.3% Singapore
74.2% Taiwan
74.3% China
76.3% India

Wednesday, January 6, 2010

Excerpt from Thomas Wolfe's "You can't go Home again"

Reading Matta Taibbe's excerpt from Edward Harrison's of Credit Writedowns that was posted on :

"Everyone had a hand in the bubble, from the congressmen who killed regulatory initiatives to the regulators who snoozed at the wheel to the GSEs to the Fed to the banks to the ratings agencies to the lenders. I don’t think it’s really controversial to say that, but it does seem like there’s an argument brewing about what that across-the-board complicity means."

I couldn't help remembering an excerpt from Thomas Wolfe's, "You Can't Go Home Again", that I read in 2005, in the midst of the mania that precipitated the financial collapse, that had sent a tingle down my spine:

"Remember What?"

"Remember when you established what you boasted was 'the fastest-growing bank in all the state - and weren't too particular what it grew on"?

"Remember when one of "the boys" borrowed money from 'the fastest growing bank' to buy 200 acres on that hill across the river - he turned to the Mayor - and sold the land to the town, for a nice profit, for a new cemetery?"

"Remember what?" - the voice rose suddenly high and sharp. "Do I remember how You've run the town through all these year? Do I remember what a good thing You've made of politics? You've never aspired to public office, have you, Parson? Oh , no - you're much too modest. But you know how to pick the public-spirited citizens who do aspire, and whose great hearts pant with eagerness to serve their fellow men. Ah, yes. it's a very nice little private business, isn't it, Parson? And all 'the boys' are stockholders and get their cut of the profits - is that the way of it, Parson?

"Remember what?" he cried again.

"Do I remember how the broken fragments of a town that waits and fears and schemes to put off the day of its impending ruin? Why, Parson, yes I can remember all these things, and how I was satisfied with, say, a modest 5%. So I am not in the big money Parson. I remember many things, but I see now I have spent my substance, wasted all my talents in riotous living - while pious Puritans have virtuously betrayed their town and given their whole-souled services to the ruin of their fellow men."

Again there was an ominous pause, and when he went on his voice was low, almost casual in its toneless irony:

"And do you think you can go home again?"

Then, as if to emphasize what I have constantly argued, but always to have fall on deaf ears, about the fact that Schumpeter's so-called, much-heralded, "Creative destruction" is always preceded by a mad, always-denied, Destructive creation, Wolfe goes on to describe to a "T", the frenzied, self-congratulatory zeal of the world of finance as it hails its own cleverness and superiority over the re-invention of the wheel yet again, in its ever more unstable form, as Wolfe uses literature to describe what John Kenneth Galbraith would later detail in his, "A Short History of Financial Euphoria", as "the vested interest in error that accompanies speculative euphoria":

"Everyone bought real estate; and everyone was "a real estate man" either in name or practice, the barbers, the lawyers, the grocers, the butchers, the builders, the clothiers, all were engaged now in this single interest and obsession. And there seemed to be only one rule, universal and infallible - to buy, always to buy, to pay whatever price was asked, and to sell again within two days at any price one chose to fix. It was fantastic. Along all the streets in town the ownership of the land was constantly changing; and when the supply of streets was exhausted, new streets were feverishly created in the surrounding wilderness; and even before these streets were paved or a house had been built upon them, the land was being sold, and then resold, by the acre, by the lot, by the foot, for hundreds of thousands of dollars.

"A spirit of drunken waste and wild destructiveness was everywhere apparent. The fairest places in town were being mutilated at untold cost. In the center of town there had been a beautiful green hill, opulent with rich lawns and lordly trees , with beds of flowers and banks of honeysuckle, and on top of it there had been an immense, rambling, old wooden hotel.

It had been one of the pleasantest places in the town, but now it was gone. An army of men and shovels had advanced upon this beautiful green hill and leveled it down to an ugly flat of clay, and had paved it with a desolate horror of white concrete, and had built stores and garages and office buildings and parking spaces - all raw and new - and were now putting up a new hotel on the very spot the old one had stood. It was to be a structure of sixteen stories, of steel and concrete and pressed brick. It was being stamped out of the same mold, as if by some gigantic biscuit-cutter of hotels, that had produced a thousand others like it all over the country....

Regional Mall Vacancies in U.S. Rise to Record on Unemployment

U.S. Office, Shopping Center Construction Spending May Fall 13%

If Fed Missed This Bubble, Will It See a New One?

And all we can think to do is try to recreate the destructive, manic idiocy that preceded the bursting of the bubble, as shovel-ready projects stand poised to destroy anything that's still standing that has one iota of grace and beauty and to ravish whatever's left of the countryside to despoil it with more monstrosities no one wants and no one needs. This is what we call progress and what we now force down the throat of the rest of the world at the point of a gun and then get our skirts in an uproar because one madman objects so strenuously to this mayhem that he's willing to blow himself to pieces to try and put a stop to it, or, to at least perhaps, cause a lull in the wanton mayhem we insist is "progress".

At some point someone has to stop us, but since we've decided that full-spectrum domination is our god-given right, no one can. So when our world comes crashing down around us, again brought down by our own blindness and hubris, you can be sure we will have "shovel-ready" scapegoats whom we will blame. That is why Bernanke can be re-appointed with barely a whimper of protest. He best epitomizes the Spirit of the USA: Deny culpability for the consequences of our own actions and shuffle the blame onto someone, anyone, else. The USA is now simply a Greek tragedy and we have now all become Oedipus: willfully blinding ourselves as we fearfully await the third act.

Friday, January 1, 2010

The government Is the free market.

"Throughout the year – and despite global market and economic recoveries – the Federal Reserve held short-term interest rates down at near zero. Importantly, Fed holdings of mortgage-backed securities ballooned from nothing to end the year approaching $1.0 TN. This unprecedented monetization reliquefied markets, pushed mortgage borrowing costs to record lows, fueled a refinancing boom, and worked surreptitiously to transform hundreds of billions of problematic “private-label” mortgages into (market-appealing) government-backed securities."

As stated above by Doug Noland of the government is the Market for MBS, which should now be more-accurately referred to as GBS.

Right now, eg, there are people with 2-income households, no kids, yet so hopelessly underwater they've stopped paying the mortgage. This results in a $50k interest deduction for which they are no longer eligible .. the banks may not be getting their money, but guess who is? The Federal govt and the States. The real ($$$) reason for the Fed's forbearance of accounting legerdemain.

In a quote by Andrew Jackson posted on the IRA's web-site (, the crux of the crooks' methodology is revealed to be as old as what used to be referred to as "the Union":

"Experience should teach us wisdom. Most of the difficulties our Government now encounters and most of the dangers which impend over our Union have sprung from an abandonment of the legitimate objects of Government by our national legislation, and the adoption of such principles as are embodied in this act. Many of our rich men have not been content with equal protection and equal benefits, but have besought us to make them richer by act of Congress. By attempting to gratify their desires we have in the results of our legislation arrayed section against section, interest against interest, and man against man, in a fearful commotion which threatens to shake the foundations of our Union. It is time to pause in our career to review our principles, and if possible revive that devoted patriotism and spirit of compromise which distinguished the sages of the Revolution and the fathers of our Union. If we can not at once, in justice to interests vested under improvident legislation, make our Government what it ought to be, we can at least take a stand against all new grants of monopolies and exclusive privileges, against any prostitution of our Government to the advancement of the few at the expense of the many, and in favor of compromise and gradual reform in our code of laws and system of political economy."

Google shut down another financial blog, while Bernanke, the high priest and prophet of the insanity of waste Capitolism has descended to, referred to the "savings glut" again... ie we peasants are no longer allowed to have savings accounts, but are instead advanced "credit", the terms of which can be changed at any time, for any reason, by the credit-issuing institution, granting the government, which now runs these same institutions, co- conspirator status with banksters, whose now-obvious odious intention is to enrich themselves and utterly impoverish their customers by confiscating their wealth via usurious interest payments, and other financial hidden traps, cogently referred to as "innovations", that lie waiting like beartraps, armed with brutal teeth and buried out of sight in small print, to tear the flesh and break the bones of their clientele.

Meanwhile, in The Huffington Post, a "Move Your Money" campaign has been initiated, in which, working with the IRA (institutional risk analytics), a list of more than 5000 banks is used to encourage flocks to move their savings to fundamentally sound institutions and away from money center banks, the true scope of the disaster that continues is made apparent. The one great innovation of the aughts was the ATM, but, of course, the smaller banks don't have the financial clout to have any. Every single one listed for the zip code I plugged in, which was in a major metropolitan area, necessitated a trip downtown whenever I should need cash, as they had no other branches.

Of course, that's only one problem. The main one being that, like all industries since the rise of the internet and financial computerization, should those banks become profitable, the well-financed mega banks will simply buy them up, since they have unlimited access, via the largess of their friend Benron, to the printing press of the US government.

Because without Capitolism, there is no capitalism. What the debacle should have shown us is that without the government's presence in the markets, chaos reigns, and as Martin Wolf stated, we can not "even take the survival of civilisation itself for granted."

Yet, as he goes on to say, "the financial system remains damaged. Not only does it still own vast quantities of the “toxic assets” its “talented” employees created, but the world is not addressing the structural causes of the crisis. In some ways, the oligopolistic banking system that has emerged from the crisis is riskier than the one that went into it."

It is with this backdrop that we blithely re-appoint the smug, over-confident, self-congratulatory fool that presided over the entire globe's slide into a chaos so stark that the survival of civilization itself was in question. To repeat the same actions and expect different results is the very definition of madness. Remember this when the government is incapable of stopping the slide to catastrophe when the next crisis, engineered by the same crooks and charlatans, aided and abetted by the same fool, strikes again.