JP Morgan's Madoff Connection

Junior is taking a well-deserved vacation in South Lake Tahoe this weekend but news doesn't take a vacation.

Forgive me as I do not have WiFi here at the cabin so this post will be short and sweet sans links; from FierceFinance.com (go on, sweetheart, you can look it up yourself), JP Morgan might be in a tiny bit of trouble.

In 2006, $JPM pulled a significant amount of funds which had been invested directly (by way of an alternate hedge fund set up specifically for this purpose) from Bernie Madoff's scheme without informing investors. Did our friends know something the rest of us didn't?

Just a little food for thought on this fine Friday morning.

I'm hitting the slopes now. Don't miss the story.

Conflict of Special Interests: Geithner, Government, and Sachs LLP



The hypocritical babble of Timothy Geithner continues...

From USA Today:

Treasury Secretary Timothy Geithner picked a former Goldman Sachs lobbyist as a top aide Tuesday, the same day he announced rules aimed at reducing the role of lobbyists in agency decisions.

Mark Patterson will serve as Geithner's chief of staff at Treasury, which oversees the government's $700 billion financial bailout program. Goldman Sachs received $10 billion of that money.

[...]

Melanie Sloan, executive director of the Citizens for Responsibility and Ethics in Washington, said President Obama was retreating from his own ethics rules barring lobbyists from working on the issues they lobbied about during the previous two years. "It makes it appear that they are saying one thing and doing another," she said.

[...]Geithner issued rules Tuesday to restrict lobbyists from contacting Treasury about bailout issues.

A USA TODAY review of Obama hires shows that 21 have registered as federal lobbyists, although most have not done so within the past two years. They include White House aide Cecilia Muñoz, who lobbied last year for the National Council of La Raza, and Agriculture Secretary Tom Vilsack, who lobbied in 2007 for a national teachers union.

White House spokeswoman Jennifer Psaki said Obama is following through on his commitment to operate under strict ethical standards.


HYPOCRITE: see also dissembler, dissimulator, phony, phoney, pretender; a person who professes beliefs and opinions that he or she does not hold in order to conceal his or her real feelings or motives

Good one, Geithner. You're truly a winner.

Geithner: Slumming it at the Treasury

collusion: they has it


That $191,300 Timothy Geithner will receive in salary as U.S. Treasury Secretary is actually a pay cut for the ex-NY Fedhead, who stands to gain $434,666 in severance from the Federal Reserve (with an extra $63,111 in Fed pension benefits that he will take via a one-time lump sum payoff).

Financial Week reports on Geithner's additional financial conflicts of interest:

Mr. Geithner’s largest asset is partial ownership of a Cape Cod vacation property in Massachusetts, valued between $250,001 and $500,000. Most of his other assets are mutual fund holdings valued between $15,001 and $100,000.

The disclosure forms value assets in broad ranges.

Mr. Geithner, who has spent his entire career working for governmental agencies and the International Monetary Fund, said in a letter to Treasury lawyers that he agreed to divest a number of these holdings before he took the job.

These divestments were worth between $211,000 and $515,000 on the form, which is dated January 12. They include holdings in the Transamerica PIMCO Total Return Fund, the Vanguard Short-Term Federal Fund, several college savings plans and other U.S. government securities funds.

As Treasury Secretary, he has direct influence over the issuance and markets for Treasury securities and on tax advantages for investments such as college savings accounts.

Paulson was forced to sell some 3.2 million shares of Goldman stock before he took office in July 2006. At that time, they were worth about $480 million and the proceeds were deposited into a blind trust.
I am baffled as to why Geithner is so con
fused as to the value of his assets, pricing them somewhere between $740,000 and $1.7 million - maybe he tried to use TurboTax's "mark-to-market" function to calculate current market value?

Compared to Hank Paulson, Geithner's holdings look like chump change - but that should not be mistaken for a sign that Geithner checks out where personal interests are concerned; alternate conflicts of interest could easily lurk just outside of his portfolio.

from Portfolio.com - the true axis of evil

As SmartMoney points out, it isn't the size (of the portfolio) that matters, but with whom the Treasury Secretary is entangled:

In an age of bailouts, Geithner is the original Bailout Czar. It was Geithner, after all, who was the instrumental figure in arranging JP Morgan’s (JPM: 27.66, +2.60, +10.37%) takeover of Bear Stearns, a deal in which $29 billion of taxpayer money was pledged as a backstop against illiquid and toxic assets.

It wasn’t Hank Paulson, but rather Tim Geithner who put together the plan to have the government rescue AIG, to the tune of $85 billion and growing.

It has been widely noted Geithner was in favor of stepping in with taxpayer dollars to save Lehman Brothers. I guess it’s pretty easy to spend taxpayer dollars when you aren’t even paying your own taxes.

If you are unfamiliar with Geithner, simply go the Federal Reserve’s web site to see a line-item balance sheet of his work: billions of tax dollars for AIG, Bear Stearns (look for “Maiden Lane LLC”; it’s the corporation created for Bear Stearns’s liquidation), commercial money markets and loans to primary dealers.



Can such a mastermind be trusted to fondle Obama's bloated stimulus cash? Well no. But what choice do we have? All we can do is keep an eye on the little prick to make sure he isn't running back to Robert Rubin or any number of his corporate cronies with our loot.

The OMGLOLWTFBBQStimulus: Part 2



Alright kids... here we go again. Let's see how much of this I can get through before I pass out.

$650,000,000 for Wildland Fire Management programs

$135,000,000 for Indian Health Services

$410,000,000 for Indian Health Facilities

$150,000,000 for the Smithsonian facilities

$3,250,000,000 for Training and Employment services under the Department of Labor

$120,000,000 for community service programs for the elderly (what?!)

$160,000,000 for the Office of Job Corps

$400,000,000 for State Unemployment

$160,000,000 MORE for the Office of Job Corps facilities

$1,000,000,000 for the Department of Health and Human Services (So is Tommy Thompson going to ask for RFID grants?)

$88,000,000 for Department of Health and Human Services HQ replacement

$412,000,000 for the CDC

$300,000,000 for the National Institute of Health

The Conservatives are going to love this one:

The Committee recommends an additional $2,700,000,000 for the Office of the Director, half of which will be transferred to the Institutes and Centers. The Committee strongly urges that, to the extent possible, the funds should be used for purposes that can be completed within 2 years. In particular, the Committee recommends placing a priority on: short-term new grants that focus on specific scientific challenges; new research that expands the scope of ongoing projects; research on public health priorities such as influenza, tuberculosis and malaria; and stem cell research.

$1,110,000,000 for vague "research comparability" projects, with nearly half available for the Secretary of Health and Human Services to use at will.

$2,000,000,000 for the Child Care and Development Block Grant to subsidize child care costs.

$400,000,000 for "social services" for laid-off or otherwise displaced persons

$2,100,000,000 for Head Start

$100,000,000 for senior meal programs

$5,000,000,000 for Health Information Programs (didn't we see that earlier?!)

$5,800,000,000 MORE to the CDC for disease prevention with this interesting caveat: The Committee believes that CDC's State portfolio managers have been successful in making the most efficient use of multiple funding streams.

$750,000,000 for vaccination projects

$15,000,000 for newborn screening

$60,000,000 for CDC research and screening, including under the Behavioral Risk Factor Surveillance System

$13,000,000,000 for the Department of Education

$17,070,000,000 for school improvement programs

$1,000,000,000 for educational technology grants

$16,000,000,000 to rebuild public schools

$13,500,000,000 for Special Education

$610,000,000 for Rehabilitation Services

$110,000,000 for independent living programs for the disabled

$13,869,000,000 in Pell grants

$100,000,000 for improving teacher quality

$3,500,000,000 for modernization of higher education facilities

$160,000,000 for AmeriCorps

$40,000,000 to cover the National Service Trust against market losses

$890,000,000 to limit the administrative costs of Social Security (WTF are you talking about?!)

$20,000,000 to the Government Accountability Office

$3,012,922,000 for military construction - it starts off as if the families of American soldiers will receive help with housing but turns into a masturbatory G.I. fantasy using everyone's favorite word: infrastructure

$410,973,000 for the Homeowners Assistance Fund so military personnel do not have to take a large loss if permanently deployed and forced to sell an overvalued home in today's market.

$637,875,000 for Army construction projects

$990,092,000 for Navy and Marine Corps construction projects

$871,332,000 for Air Force construction projects

$118,560,000 for other vague and non-stated military construction projects

$150,000,000 for Army National Guard "readiness centers"

$110,000,000 for Air National Guard

$3,944,100,000 for the Department of Veterans Affairs

$1,370,459,000 for VA facilities

$64,961,000 for the National Cemetery Administration for "capital infrastructure" and construction projects. The dead need stimulus too, damnit!

$1,105,333,000 for "major" construction projects for the VA and the National Cemetery Administration

$939,836,000 for "minor" construction projects

$257,986,000 for extended care facilities

$60,300,000 for Arlington National Cemetery

$180,500,000 for the Department of State Administration of Foreign Affairs (Glorified NWO gopher, supposedly will create 1000+ jobs)

$75,000,000 for Worldwide Security Protection (Whatever the fuck that means)

$524,000,000 for the Capital Investment Fund to upgrade government IT programs. Again. Sense a theme here?

$98,527,00o for the Comprehensive National Cybersecurity Initiative to prevent cyber crime

$305,473,000 to upgrade IT systems

$224,000,000 for border "construction" (keep in mind those are THEIR quotation marks, not mine) and maintenance projects on U.S./Mexico border (Come on, you didn't think we cared about the Canadian border, did you?!)

$100,000,000 for Obama to upgrade as he wishes. No shit, it actually says "to the President" for IT modernization under the United States Agency for International Development

$45,467,750,000 for the Department of Transportation

$5,500,000,000 in additional state transportation money

$200,000,000 for FAA facilities and equipment

$27,060,000,00 MORE for "highway investments"

$250,000,000 to the Federal Railroad Administration

$850,000,000 to AMTRAK

$2,000,000,000 for a high-speed rail corridor investigation

$8,400,000,000 for public transportation systems around the country

$100,000,000 to the Maritime Administration

$510,000,000 for the Native American Housing Block Grant

$5,000,000,00 to the Public Housing Capital Fund

$2,250,000,000 for the Neighborhood Stabilization Program from your friends at HUD

$1,600,000,000 for the Homelessness Prevention Fund

$3,500,000,000 to Section 8 low-income housing

$79,000,000,000 for a new State Fiscal Stabilization Fund which will help offset state defaults

Interesting:
Title XV establishes the Recovery Accountability and Transparency Board (the Board) to provide oversight and transparency of expenditures made under the authorities provided in this act.
The Board will coordinate audits and investigations conducted by agency Inspectors General and will consult with the Government Accountability Office and State auditor generals as those entities perform similar oversight. The Board also will initiate and conduct independent audits and investigations, including holding public hearings. The Board's activities will ensure continued and coordinated oversight of spending so that taxpayer dollars are used effectively and efficiently while avoiding waste, fraud, and abuse. The Board's activities will ensure that entities receiving Federal funds will be held accountable for how taxpayer dollars are spent. The Board also will provide transparency for the taxpayer by posting on the Board's website up-to-date, easily understandable information about spending authorized in this act.

That's so cute.

Well, kids, that's it for Obama's little stimulus. Now that I've got it down to the penny (okay so I may have missed a few hundred billion here or there, sorry!), it looks an awful lot to me like a U.S. government bailout.

Stimulus? Seriously? You sure?

OMG! Obama! Enough with the Stimulus: Part 1


You better love me forever for reading through 161 pages of absolute bullshit just so you can read what is actually ON this stimulus bill without having to read through 161 pages of absolute bullshit.

The anatomy of OMGObama's stimulus (that word never gets old): Pages 1 - 50:

Totals:
$350,037.825,000 in discretionary appropriations.
$16,562,000,000 in mandatory appropriations.

Lets keep score on this, shall we?

$300,000,000 to the USDA. Govt +1

$5,000,000 to the Office of the Inspector General for "oversight." Govt +2

$100,000,000 to the Agriculture and Food Research Initiative (a "flagship" of the USDA). Govt +3

$171,000,000 to the Farm Service Agency. It sounds like the taxpayers win on this one if you don't know what that is but basically it's a government lending arm for farmers. Govt +4

+ $42,430,000 in "budget authority" (STFU, government, you're not being slick talking in code) for $650,000,000 in loans to farmers. More government debt? Guess who wins on this one. Govt +5 (taxpayer +1/2 because we need farmers but not like this)

$275,000,000 for Watershed and Flood Prevention Operations mmmm... is FEMA getting this? If so, govt +6, taxpayer +1. If not, govt +5, taxpayer +1 1/2.

$120,000,000 for the Watershed Rehabilitation Program for some vague activities that somehow involve water. Govt +7

$110,000,000 more Bernanke Bucks for the USDA again, this time to implement "rural" systems, especially the computerized ones. Know what this means, Uncle Buck on your farm in Nebraska? The government needs to track that money it gave you. Congrats, you're getting DSL. And sorry, but this also means they can keep better tabs on you. Govt +8 OMG was that too conspiratorial? This bill is warping my mind already, no wonder Congress makes such crappy decisions, no one can possibly read through this bullshit.

$200,000,000 in budget authority over $11,472,000,000 (yes I intended to use that many zeros) in loans for a rural housing insurance program. This thing is turning into the ShamWow of toxic monetary leakage. Smart move, government. Fixing loans with more loans. You guys deserve a prize for this. Govt +9

$127,000,000 in budget authority over $1,546,000,000 in loans for rural hospitals, public buildings, blah, blah, blah. Pork for stupid ass statues in the park. Govt +10

$200,000,000 in budget authority for loans and grants to investigate alternative fuel sources. If the government weren't running that (we know how they are with money, after all), I'd say yay. Government will blow it on rockets and domestic surveillance technology that runs on potatoes. Govt +11

$50,000,000 for the Rural Energy for America Program. Taxpayer +2

$1,375,000,000 in budget authority for $2,820,000,000 in loans and $963,000,000 in
grants for needed water and waste disposal facilities in rural areas. Taxpayer +3

$200,000,000 in budget authority for $813,000,000 in loans and $180,000,000 in grants
for the distance learning and telemedicine program to improve rural broadband access. More domestic spying. Govt +12

$198,000,000 MORE for the USDA, this time to fund school lunch programs. Bwhahaha. Are you kidding me? Govt +13

$380,000,000 for WIC, with an extra $120,000,000 thrown in just for kicks. Depending on which side of the party line you stand on... this is +/-

$150,000,000 for food purchases, of which up to $50,000,000 may be used for administrative funding, for the Emergency Food Assistance Program. Again. Can't grade this one.
WOW they are REALLY dead-set on getting broadband out into the rural areas. What the hell for? Why now? Hurry up! Elmer on Highway 285 is still on AOL dial-up! As if. And here comes the scary stuff.

The Committee recommends $20,000,000 for information technology activities within the Bureau of Industry and Security [IBIS]. These funds are provided to ensure BIS has necessary resources for secure information technology EITI systems, which are essential for
the Bureau to advance U.S. national security, foreign policy and economic objectives by ensuring effective export control and treaty compliance and by promoting continued U.S. strategic technology leadership. Pfft. Govt +6523563

The Committee recommends an additional $150,000,000 for Economic Development Assistance Programs [EDAPI] to stimulate employment and increase incomes in areas that are characterized by underutilized resources, which if put to productive use, can contribute
to greater national productivity and balanced national economic growth. Of the amounts provided, $100,000,000 shall be for public works grants, which will leverage private funding to create roughly 35,000 new jobs in communities struggling with substantial job losses. In addition, $50,000,000 shall be for economic adjustment assistance to help communities recover from sudden and severe economic dislocation and massive job losses due to corporate
restructuring. Meaning "There are still areas to exploit in America now that we can't afford to outsource our labor, so we're looting the place before the ship sinks."

$1,000,000,000 for the 2010 Census.

$9,000,000,000 for the Broadband Technologies Improvement Program. They don't care if your YouTube is slow. They just want to make it easier to keep an eye on you. And excuse me, what the hell does THIS mean?
"To maximize the public benefits of this significant public investment, section 201 gives NTIA the authority to impose grant conditions with regard to interconnection and nondiscrimination requirements that apply to facilities funded in part by this appropriation, regardless of who operates those facilities."

$650,000,000 to fund the conversion to digital TV

$575,000,000 for NIST to do... some vague bullshit which is never really stated.
$218,000,000 MORE for NIST to do... whatever the fuck it wants.

$20,000,000 for Health Information Technology

$357,000,000 MORE for NIST, this time to renovate its facilities.

$1,222,000,000 for the National Oceanic and Atmospheric Association

$34,000,000 for Department of Commerce renovation and "modernization"

$6,000,000 for the Office of Inspector General to keep an eye on things. OVERSIGHT FTW

$200,000,000 for Tactical Law Enforcement Wireless Communications. Ooooh, sounds scary.
$150,000,000 to fund Federal prison upkeep.

$2,000,000 for the Office of the Inspector General to keep an eye on things at the Federal prisons. OVERSIGHT FTW again!
$50,000,000 for US Marshals under the Adam Walsh Child Protection and Safety Act

$75,000,000 to the FBI to investigate mortgage fraud, predatory lending, and market manipulation. Oooh, look out Ben Bernanke, they might come after you.

$400,000,000 MORE to the FBI for emergency construction projects.

$300,000,000 for the Office on Violence Against Women; bill claims sexual and violent assaults have risen as a result of economic crisis. Does someone feel a little guilty about that?

$2,640,000,000 in State and local law enforcement funding. Because you assholes are going to be acting up, they are going to be ready to smack you down. Just shut up and eat your gruel.

$1,502,000,000 for the National Aeronautics and Space Administration [NASA]. Because God forbid we not launch monkeys into space in the middle of a crisis.

And cheap ass America only wants to give $2,000,000 to the Office of the Inspector General to audit ALL that money and ALL those provisions.
Gearing up for war, are we?

$2,984,000,000 for Facilities Sustainment, Restoration and Modernization. Funds shall be used to invest in energy efficiency projects and to improve the repair and modernization of Department of Defense facilities in the Continental United States, Alaska, and Hawaii.

The bill provides an additional $200,000,000 in Operation and Maintenance to the Army, Navy,
Air Force and Marine Corps to lease "alternative energy" vehicles. Looks like the Pickens Plan worked, T. Boone! Good job, homie!

$100,000,000 MORE for the Department of Defense to make robots and super-charged batteries (I am not kidding you)

$200,000,000 MORE for DoD R&D

$250,000,000 MORE for DoD "facilities sustainment"

$12,000,000 to the Office of the Inspector General to audit these DoD deals.

$4,600,000,000 under this heading to accelerate ongoing work within the Corps. The Committee recognizes that the programs, projects and activities of the Corps of Engineers
provide positive economic benefits to the Nation through reduction of flood and storm damages, transportation savings, and environmental restoration.

$1,400,000,000 for water restoration projects in 17 Western states (it does not say WHICH, just "the" 17)

$14,398,000,000 (OMG) for a number of Energy Efficiency and Renewable Energy activities

$1,000,000,000 for nuclear safety... with a little thrown in there for nuclear "research" Look out, Geithner, the Chinese are coming with their funny money!!

$5,527,000,000 for Defense Environmental Clean-up. A more fitting title does not exist for this.

$250,000,000 for the Community Development Financial Institutions Fund. Oh this cannot be good

$125,000,000 for D.C. sewer system. Now I suspect this is because Washington, D.C. is full of shit, but I could be wrong

$9,048,000,000 for the Federal Buildings Fund including courthouses and Border Patrol stations.

$2,000,000 for the Office of the Inspector General to audit those projects.

$7,000,000 for the Accountability and Transparency Board, birthed from this bill. This is absolutely laughable.

$84,000,000 for the Small Business Administration

$10,000,000 for the Office of the Inspector General to audit loans given by the SBA.

$248,000,000 for Homeland Security. Yay. You know how much I love domestic surveillance.

$135,000,000 for the Bureau of Land Management. With all that land the government now owns after buying out bad banks, someone's got to keep an eye on it.

$158,000,000 for the National Park Service

$135,000,000 for USGS

$20,000,000 for the "working capital fund"

Now here it gets weird:
(INCLUDING TRANSFERS OF FUNDS)
The Committee has provided $800,000,000 for Superfund remedial activities to initiate new construction projects and expedite cleanup activities at existing Superfund sites. Language has been included allowing the Administrator to retain up to 2 percent of these funds for program oversight and support functions, and to transfer these funds to other accounts as necessary.

WTF?
To be continued, I could only handle 50 pages of this crap...

Goldman Sachs of Shit: Hostile Financial Takeover Continues

infiltration: 95% complete


It seems like the incest is never ending when it comes to American finance, government, and our friends over at the Federal Reserve. It makes sense if you contemplate it for a brief moment; who knows better how to steal than Fed alumni stealing our dollar's purchasing power by pumping liquidity (from here on referred to as funny money) into their cronies' battered balance sheets?

Announced today, former Goldman Sachs of Shit top economist William Dudley has been chosen to fill Tim Geithner's vacant seat at the New York Fed. MarketWatch reports:

He has played a key role in designing and implementing the Federal Reserve's strategy to buy assets to stabilize certain financial markets. The Fed's balance sheet has grown from about $800 billion to more than $2 trillion as a result of the purchases. In addition, the quality of the balance sheet has suffered.

But economists give the Fed high marks for its innovative efforts. Most of the worries are related to the "exit strategy" that the U.S. central bank will have to undertake down the road. Dudley led the New York Fed's markets group "at a crucial time and helped conceptualize, develop and manage many of the Fed's responses to extraordinary financial conditions," said Denis Hughes, a member of the New York Fed's search committee.
Which economists are these giving the Fed high marks for "innovative efforts?" Perhaps it's because I'm an econosavant and therefore out of the accredited loop here but, uh, from where I'm standing, no one is too comfortable with what our friends at the Federal Reserve have been up to as of late. For good reason.

"The New York Fed, standing at the critical intersection of the financial markets and the banking system, has a leading role to play in assisting in the reform of the architecture of the U.S. and global financial system to ensure that what has transpired over the past year can never occur again," Dudley said.

The critical intersection ? How about the axis of evil?

The only way to serve the goal of preventing "what has transpired over the past year" to "never occur again" would be an exceptionally suicidal move on Dudley's part - and we all know no Fedhead in his or her right mind would ever consider even for a moment that dismantling the Federal Reserve could clear away all wreckage and restore sanity to our hallucinatory state of economic failure.

So again, we've been lied to. Quick! Let's start printing more money so we can fix this little bubble in the market otherwise things might get really bad.

Holy Financial Fallout: You're Fired!

this is why i never check my voice mail.

Yesterday was a record-breaking day of mass layoffs, an appropriate reflection of the U.S. and European economies, with 76,000 jobs slashed from varying industries across multiple sectors. So how bad was the damage?

Texas Instruments: 3400
Pfizer: 19000
Home Depot: 7000
Caterpillar: 20000
Sprint/Nextel: 8000
General Motors: 2000
ING: 7000
Royal Phillips Electronics NV: 6000

The United States Department of Labor's "Mass Layoff Statistics" publishes not-so-frequently updated information on job losses in the U.S. though at this point, I question any publicly-released, government-audited statistics. Call me a conspiracy nut but something is fishy about those guys over there in D.C.

According to CNNMoney.com (and it's up to you if you believe what they have to say, at this point it is safe to assume that any and all information is suspect), 50 major companies have cut 210,000 jobs in January, with no slow down expected. But in that same article, they make an interesting point - layoffs may not be the appropriate solution:

So instead of resorting to large job cuts, companies might be better off trying to maintain the loyalty of existing employees. Robert Maguire, the head of human capital services at CBIZ (CBIZ), a professional services company focusing on benefits, payroll and human resources, said that hiring freezes as well as salary cuts for some of the highest-paid executives, often can be better ways for companies to manage through a downturn.

Of course, some companies probably hired too many people during the last economic boom, and they are now trying to make amends for that. But slashing their payrolls when the economy is arguably at its weakest point during this recession is not the best way to set themselves up for better times ahead."Companies don't know how long this downturn is going to last. So it's rational to start cutting jobs. But certainly, sooner or later there is the risk of eliminating too much and taking away what you need for your business to remain viable," said Oscar Gonzalez, an economist with John Hancock Financial Services in Boston.


(Disclaimer: I am not related to Oscar, swear ta)

But in Bizarro World business, can execs really plan for downturns, frozen credit lines, decreased sales, and huge hits to pension portfolios?

It would help if someone (helllllo big bloated pig government! Are you out there?) would first admit how bad things are.

But why hold our breath on that one?

Bernanke: Sleeping with the Enemy

Hey, conspiracy whackos, check THIS out!



Now, I've publicly expressed my disdain for Alex Jones and his fear-mongering paranoid Bullhorn of Doom but every now and then, the guy catches something worth paying attention to. That doesn't mean he is the authority on the New World Order or that I bow to him at my Conspiracy Altar each Sunday morning but it is worth noting Bernanke's appearance at the Bilberberg meeting this past June in Virginia.

Quick, alert the alternative press! The guy is in cahoots with the Bilderbergers!!

(We knew that. I just like how Jones added the music track. What I wouldn't give to see who Bernanke is Blackberrying on his way to the meeting.)

America Facing Critical Fool Shortage


The Greater Fool Theory: As Practiced by Citigroup

"The bigger fool theory or greater fool theory (also called survivor investing) is the belief held by one who makes a questionable investment, with the assumption that they will be able to sell it later to "a bigger fool"; in other words, buying something not because you believe that it is worth the price, but rather because you believe that you will be able to sell it to some one else for an even higher price. Invest redirects here. ... In economics and business, the price is the assigned numerical monetary value of a good, service or asset. ..."

Act 1: Questionable investments.

"It might be on some occasions a valid method of making money in the stock market -- however, the market participants eventually realize that the price level is too outrageous and the speculative bubble pops. The bigger fool theory relies on market optimism concerning a particular stock, an industry, or the market as a whole."


Act 2: Risky behaviors in volatile markets.

"The bigger fool theory holds for any pure value transaction, not just speculative ones. When a commodity with a universal value is traded then, no matter how the situation is interpreted, either the seller or the buyer has made a mistake."

Act 3: Find the bigger fool

Hello, America, I'm talking about you.

Act 4: Nationalization

Our buddy Tim Geithner seems to think the idea of a toxic waste dump for radioactive assets is an excellent idea (of course he does):

"The good bank/bad bank-type solution has been present as the solution to most financial crises around the world, and it is very important that you look carefully that they are going to be as effective in this context as they have been in some past cases," he testified before the Senate Finance Committee.

"The [pricing toxic paper] is enormously complicated to get right," Geithner said. "We want to be very careful, not just that we are using the taxpayer's money most effectively ... but also that we do these in ways where the taxpayer and the government understands the risks we're taking."


You, my darling fellow American, are the greatest fool. Hey, don't worry, so am I. Are we ready to adopt a healthy model of economic recovery yet or do I have to keep yelling?

Geithner Confirmed as United States of China Treasury Secretary

the axis of evil called. they want their blueprint back.


As of today, January 26th, 2009, ex NY Fedhead Timothy Geithner is officially running the show over at the Treasury, pulling a $191,000 salary to further fudge up the state of American finance, approved by the Senate 60-34.

Geithner's Oath of Office goes a little something like this:

I, Timothy Geithner, do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.

Holy shit who put the word "evasion" in that oath?! Hilarious! Good one, founding fathers, if accidental.

Now that the Federal Fleecing of One Nation under Obama is official, let us for a moment examine Geithner's targeting of China as a source of money manipulation.

WSJ's Bret Swanson reports:

Treasury Secretary-designate Tim Geithner's charge that China "manipulates" its currency proves only one thing. Three decades after Deng Xiaoping's capitalist rise, America's misunderstanding of China remains a key source of our own crisis and socialist tilt.

The new consensus is that America failed to react to the building trade deficit with China and the global "savings glut," which fueled our housing boom. A "passive" America allowed China to steal jobs from the U.S. while Americans binged with undervalued Chinese funny money.

This diagnosis is backwards. America did not underreact to the supposed Chinese threat. It overreacted. The problem wasn't "global imbalances" but a purposeful dollar imbalance. Our weak-dollar policy, intended to pump up U.S. manufacturing and close the trade gap, backfired. Currency chaos led to a $30 trillion global crash, an energy shock, bank and auto failures, and possibly a new big government era. For globalization and American innovation to survive, we must first understand the Chinese story and our own monetary mistakes.

We've heard the refrain: China's rapid growth was a mirage. China was stealing wealth by "manipulating" its currency. But in fact China's rise was based on dramatic decentralization and sound money.


China is either very smart or very stupid for loading their portfolio with excessive amounts of American debt. We have little option at this point except to default and allow China to leverage its influence and ownership to capitalize on our egregious error. Right?

Blogging Stocks' Gary Sattler reflected on the possibility of a Chinese-owned White House (TOTALLY WHACKED OUT, RIGHT?... ... right?!) in February of 2008:

I've become aware of an unsettling third scenario regarding the value of buying debt. You can easily use it to buy control of the debtor's assets through their weakness.

We can probably assume that the Chinese have heard rumors that American banks are writing off billions of dollars in debt-related losses. I'm guessing that it's no secret around the globe that American debt may currently be a sucker's bet. So are we to assume that Chinese financiers are ill-informed of the facts or shall we believe that they are just stupid? Is it simply a matter of Chinese bankers having a special talent for choosing safe debts to invest in? Should we think that the Chinese believe in us, or is this simply a matter of China's cheap purchase of global political power. I'm thinking that the latter explanation is the case.

To take the matter one step further, what happens if there is wholesale default on the treasury securities China has invested in? You must believe that our government is certainly facing that possibility. If the debts are owed by our government, does that mean China could have the sheriff evict our president from the White House in the event of default? Yeah, laugh now if you want to. Then stop and think about it again.


WTF?! China can't just come over here and seize our property, can they?It's not nearly as whacked out as it seems:
In the early months of next year, when the official data are published, the United States will run a serious risk of insolvency. This would involve, in the first place, a valuation crisis for the dollar. After this, the United States could face a social crisis like that in Argentina in 2001. A crisis in U.S. public debt would likely have a severe impact on the Asian countries that are the main exporters to the United States, China first among them. Chinese monetary authorities, thanks to a steeply undervalued artificial exchange rate, by about 55%, have limited imports (including food) and have achieved an export surplus. This has allowed them to accumulate a large stockpile of dollar reserves. In a currency crisis, China risks losing much of the value of its accumulated currency reserves. At the same time, pressure on imports (wheat, other grains, and meat) have led to inflation in the prices of food, the most important expenditure for more than 900 million Chinese. This is nothing more than a small confirmation of the recent statements of the pope, in his message for the World Day for Peace, where the pontiff calls the current financial system and its methods "based upon very short-term thinking," without depth and breadth (nos. 10-12), preoccupied with creating wealth from nothing and leading the planet to its current disaster.


Geithner's confirmation and accusations against Chinese officials for money manipulation are a wonderful step in the absolute wrong direction. The U.S. does not have an out. We owe them a shit ton of money and they are going to want it at some point. You think just because their own news is censored they don't read ours? Think again there, kiddo. They know we're falling apart at the $eams over here.

Many Americans are afraid to consider insolvency of U.S. debt, or are too ignorant to even realize that crisis has reached such unprecedented levels. Well check it out, yo, we're broke and now the collectors are going to start knocking on the door asking for that couple $20 billion we borrowed a few years back.

Look on the bright side, America, at least we are mostly all in the same boat. Author Kevin Phillips pegs federal, state, and local government obligations at around $11 trillion for 2007; when caluculating public debt (you know, you and me and the Joadses next door with our carryover credit card balances, new cars, and overvalued mortgages along with corporate debt), that number looks more like $37 trillion. The American Dream was a lie and we all charged the fallacy on our Amex cards - now, I truly hate to be the bearer of bad news but it is time for us to pay up.

As MoneyWeek so eloquently stated, the problem isn't liquidity, it is insolvency
.

So now that Geithner has officially weaseled his way into Team Obama, what can we expect from Rubin's prodigal fanboy?

More bullshit, naturally.

Food for the Nutjobs: PM Brown uses the "N-W-O" words again

do you want Firefox to remember this password?

First news that the Bank of England will be discontinuing weekly balance sheet data, now this from PM Gordon Brown. Here's a hint, homie, don't mutter the "new order" words. It'll get everyone worked into a lather. Yahoo! (yeah, I could have found a better source, I'm tired, leave me alone) reports:

LONDON (AFP) – Prime Minister Gordon Brown said Monday the financial crisis must not be an excuse to retreat into protectionism and instead be viewed as the "difficult birth-pangs of a new global order".

In a speech, he will urge countries to avoid "muddling through as pessimists" and "make the necessary adjustment to a better future and setting the new rules for this new global order", according to his office.

Official data confirmed Friday that Britain is in recession. Days earlier, the government unveiled a new package of measures to help the flow of credit in the economy, but Brown has argued global action is needed for a quick recovery.

He will warn Monday that the crisis has given the world a choice: "We could allow this crisis to start a retreat from globalisation.

"As some want, we could close our markets -- for capital, financial services, trade and for labour -- and therefore reduce the risks of globalisation. "But that would reduce global growth, deny us the benefits of global trade and confine millions to global poverty.

"Or we could view the threats and challenges we face today as the difficult birth-pangs of a new global order -- and our task now as nothing less than making the transition through a new internationalism to the benefits of an expanding global society."


Let us discuss threats for a moment. How about this 2006 article from the Washington Post on ex-President Bush's secret international banking surveillance program, where an outed Cheney attacks the New York Times as facilitators of continued terrorism for publishing what was supposed to be secret data?

President Bush offered an impassioned defense of his secret international banking surveillance program yesterday, calling it a legal and effective tool for hunting down terrorists and denouncing the media's disclosure of it as a "disgraceful" act that does "great harm" to the nation.

The president used a White House appearance with supporters of troops in Iraq to lash out at newspapers that revealed the program, which has examined hundreds of thousands of private banking records from around the world. His remarks led off a broader White House assault later amplified by Vice President Cheney and Treasury Secretary John W. Snow.

Just one step up (or down, depending on how you look at this) from using RFID technology (already hard at work inside your new U.S. Passport, on some commercial products which you may have in your home right now without knowing it, and even under your grandma in Florida's skin) to track each and every dollar which circulates through the system. Why not? What's to stop them? They are already on a roll. Haven't you heard of...

Biometric passport rules?
Monopolization and government subsidy of media moguls?
The Information Awareness Office and multiple other public surveillance programs built under the guise of "terrorism prevention?"
NSA telephone and e-mail monitoring without court order?
Social engineering?

I could go on. But I'd rather not. Follow your own domestic surveillance trail.

Oddly enough, I couldn't get DARPA nor any of the official .gov IAO pages to load. Somewhere, the Internets are crying.

What happens when you take a global society pressed hard by financial trouble and spit out the N-W-O words at them?

Most likely nothing. PM Brown's speech is scheduled for tomorrow, and though my conspiratorial hackles are up in response, it is likely that no connection will be made between this careful choice of words, the controlled demolition of individual economies (let's just call it what it is, shall we?), and the ever-decreasing personal liberties afforded to us on a daily basis.

Why, again, is government so dead-set on tracking personal transactions? You want to know who I gave $3.99 to for a cup of fucking coffee but my own Federal Reserve cannot tell me what they did with nearly $2 trillion dollars?

Hypocrites.

Now I tried to figure out when this Yahoo post came from (1/26/2009, it's tomorrow there, whoops)... and discovered quite a bit of PM Brown footage and links. He's the New World Order pimp, apparently, if you believe the Internets. Here, have a video. I wish Ron Paul had a crowd like this (excuse me again for being an ignorant American but I am under the impression that's how they do it over there).

Bank of England: It's None of Your Business if We're Printing Money




Let us, for a moment, put aside my personal feelings as an American towards the Federal Reserve and the debasement of the U.S. Dollar - after all, if financial crisis has taught us one thing it is that financial illness is incredibly contagious across the globe; even the smallest toxic blips on the economic radar send ripples across global markets, so full-on financial failure naturally echoes across all markets, all economies, and all countries.

France, apparently, is bankrupt and unable to export. But we'll get to that later.

The Bank of England, apparently taking its cue from the Fed, announced earlier this month that it will no longer provide a weekly balance sheet. Now, it will continue to provide monthly data but a month is an awfully long time to run unchecked and unmonitored in terms of money creation.

Telegraph UK reports:

The Government is set to throw out the 165-year old law that obliges the Bank to publish a weekly account of its balance sheet – a move that will allow it theoretically to embark covertly on so-called quantitative easing. The Banking Bill, which is currently passing through Parliament, abolishes a key section of the law laid down by Robert Peel's Government in 1844 which originally granted the Bank the sole right to print UK money.

The ostensible reason for the reform, which means the Bank will not have to print details of its own accounts and the amount of notes and coins flowing through the UK economy, is to allow the Bank more power to overhaul troubled financial institutions in the future, under its Special Resolution Authority.

However, some have warned that it means: "there is nothing to stop an unreported and unmonitored flooding of the money market by the undisciplined use of the printing presses."

It comes after the Bank's Monetary Policy Committee cut interest rates by half a percentage point, leaving them at the lowest level since the bank's foundation in 1694.

With the Bank rate now at 1.5pc, most economists suspect the Government and Bank will soon be forced to start quantitative easing – directly increasing the quantity of money in the economy – in a drastic attempt to prevent a recession of unprecedented depth.

Although the amount of easing is likely to be limited, news of this increased secrecy will spark comparisons with Weimar Germany and Zimbabwe, where uncontrolled use of the central banks' printing presses ultimately caused hyperinflation.


Are you paying attention, Bernanke?


The reforms, which are likely to be implemented later this year, will make the Bank of England by far the most secretive major central in the world, experts said.

In the US, where the Federal Reserve has already cut rates to close to zero and started quantitative easing, the main way to track its purchases of securities and the expansion of its balance sheet is through precisely these same weekly accounts.

"Quite why the Bank has to keep its operations so shrouded in secrecy is a mystery to me," said Simon Ward, economist at New Star. "This [reform] will make it much more difficult to track what the Bank is doing."

Among the details which will no longer be published are those revealing the extent to which London's banks are using the Bank's deposit facilities – a yardstick of pressure in the financial system.

Debating the issue in the House of Lords recently, Lord James of Blackheath, a Conservative peer, said: "Remove [this] control and there is nothing to stop an unreported and unmonitored flooding of the money market by the undisciplined use of the printing presses.

Let us then define quantitative easing as an obscure and intrinsically toxic "solution" to financial sickness, and let us also define "financial ass rape" as quantitative easing + a complete and total lack of transparency.

What's better? Weimar-esque inflation in England or turning to the International Monetary Fund for a fat loan? Either way, it's all just pulling "money" out of thin air.

Warning: Conspiratorial commentary below

Now if it were only the Federal Reserve hard at work debasing our own money supply, I might be inclined to believe that Fedquarters is up to something but that they are doing this of their own accord.

When you bring other large economic powers into the equation and see traditionally transparent governments allowing obscure behavior on the part of these agencies, one can't help but pull out the tin foil hat and howl endlessly about the curious case of currency coincidence.

Why does it feel as though these central banks are moving in concert with each other, making bizarre moves and continually cutting off their own "constituents" when it comes to communication and clarity?

Apparently, all of this is none of our business.

Suffocating the M3: Bernanke's Big Cover Up or Porn for Central Bankers?




In 2006, just shortly after his confirmation as Chairman of the Federal Reserve, Bernanke and Team Fed announced the end of publication of the M3 monetary aggregate reporting. The press release went a little something like this:

On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release. Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks). M3 does not appear to convey any additional information about economic activity that is not already embodied in M2 and has not played a role in the monetary policy process for many years. Consequently, the Board judged that the costs of collecting the underlying data and publishing M3 outweigh the benefits.


Again, I do not write this blog for the economists, I write it for the artists and Internet marketers and writers and other assorted random Americans who have, up until now, had no idea how deep the fleecing goes. So what exactly are these indicators and what do they mean?

I'll save you the lesson on monetary policy but briefly:

M1: cash and cash deposits (like checking accounts) - this indicator is the most liquid (read: real) of money supply stats since it measures physical money (coin or my favorite word specie)

M2: M1 (the "real" stuff) + non-institutional money market funds, time deposits (like CDs), and savings accounts. We're getting into the fake stuff here but it's useful as an overall economic snapshot.

M3: Here's where the money turns funny. M3 = M1 + M2 + short-term repurchase agreements and other vague instruments of monetary manipulation.

When the Fed announced this to the world, the anti-Fed conspiracy crew leaped up to bemoan the possible implication of a central bank discontinuing such reporting. What would the Fed be trying to hide?

Of course, there are plenty of economic savants out there (hello!), but as The Capitol Spectator reported in 2005, there was certainly something funny going on over at Fedquarters.

True to form, the conspiracy minded were inspired to vent after last week's announcement that the Federal Reserve would cease publishing its broadest measure of money supply numbers, otherwise known as the M3 series. The official reason is that M3 is a dud. That is, M3 offers little information above and beyond M2. Dave Skidmore, a spokesperson for the Fed, told CS today. M3 adds sparse, if any insight to monetary trends that's not available in M2, a narrower definition of money supply, he continued. Skidmore also said that there's a cost to compiling M3 data. (Yes, he really did say that.) As a result, eliminating the broadest measure of money supply seems to be reasonable, or so went the drift. As Skidmore explained, "The cost of collecting [M2 data] outweighs the benefits of publishing it."

In fact, there's no shortage of agreement among mainstream economists, investors and other consumers of money supply data that M3's death will be a yawn. The demise of M3 is no great loss, Michael Cosgrove, an economist who runs The Econoclast, a Dallas-based consultancy, told CS today. "The fact that the Fed will not report M3 any more probably won't make much difference." The M2 series is an able substitute, he added.


Ok. So it is just a paranoid misconception that M3 matters, eh?

But step outside the mainstream of economic thinking and you'll get a spicier dose of opinion on the M3 announcement, namely, one laced with conspiracy implications. For example, James Turk of the Free Market Gold & Money Report smells a monetary rat, as noted by MarketWatch via ResourceInvestor.com: "Why does the Fed no longer want to report the total quantity of dollars in circulation?" Turk asks. "They know what's coming -- massive amounts of dollar creation to fund the worsening trade and federal government budget deficits. The Fed is just doing what other government agencies already do when they don't like the result of their statistical calculations. Like children, they play ‘make believe."

One George J. Parrish Jr. also sees nefarious reasons for killing M3. Writing on his blog, he asserted:

If an increase in the money supply is the cause of a rise in the general price level then M3 is an important measure of price inflation simply because it is considered to be the broadest measure of money and, hence, the best measure of price inflation. With M3 crossing the $10 trillion level the Fed has decided to stop publication of this important data. The Fed by nature is an inflation machine built to support limitless spending by the government. Yet the Fed also enjoys the reputation of being an inflation fighter. In order to protect its image the Fed has found it necessary to cease publication of M3 data.

[...]


Superficially, at least, it looks a bit suspicious when the Fed says it'll soon bury a series of money supply numbers that contradicts the central bank's public relations effort to convince the world that it's squeezing the monetary system and thereby taking a hawkish view on fighting any and all future inflation. Of course, as Cosgrove observed, the Fed has relatively lesser influence on M3 vs. M2, or certainly the monetary base. Nonetheless, the Fed's only explanation for the planned demise for M3 boils down to sparse interest in the series and the allure of saving money by discontinuing its publication. The former is a reasonable, but ultimately unpersuasive point. After all, the Fed publishes a massive amount of data, and much of it is obscure for all but a few economics geeks. As for the bit about saving money, well, that one just rings hollow from the outset. How much could the termination of M3 save the Fed? Measured against its annual budget, it's barely a rounding error, if that.

All of which convinces some that there's a conspiracy afoot. Proving conspiracies, unfortunately, is notoriously difficult, and the M3 caper promises to be no less immune to definitive conclusions, short of a confession from Alan Greenspan that he's intent on cooking the books. (Don't hold your breath.)


Let me tell you what I believe Ben Bernanke is doing. You are, as always, encouraged to do your own research and formulate your own opinions. But first, let me use myself as an example to prove my point.

For most of my life, I have been trained in adversity. Some people call this training "surviving childhood trauma" but we don't have to get into all that, let's just say that I have an above-average ability to survive chaos and disaster. As a teenager, I fell in love with cheesy zombie flicks; there is something both exciting and frightening about the idea of an apocalyptic landscape littered with festering death. Planning for the "zombie" apocalypse, then, has always been a hobby of mine, if a casual one. In short, I've prepared for disaster my entire life. Now that financial disaster has found its way to homebase, I'm more than ready for whatever we have coming, whether that be civil unrest, full-on civil war, pestilence, etc etc. Bring it, I can't wait.

Now this is a silly example (surely I don't spend my days creating complex anti-zombie mechanisms in the basement of my office) but let us look now at Ben S. Bernanke, an academic who spent a large part of his career researching the greatest collapse of American money in history. In short, Bernanke gets off on the Great Depression much like I get off on zombie movies.

Academics are notorious for their research. An intelligent person with purpose will fixate on a subject and obsess endlessly over each and every implication and detail, intimately acquainting themselves with the topic at hand. Financial collapse, then, is Dr. Bernanke's zombie apocalypse and he is ready.

In fact, he is secretly overjoyed. Surely central bankers are not exactly allowed to show their personal bias but I guarantee you Bernanke is beside himself watching the economy collapse upon itself. He has trained most of his professional life for this. The ship is sinking; his predecessors deftly steered her into the iceberg, now Bernanke gets to watch her go down from the captain's chair.

He is no moron. He knows exactly what he is doing.

And being that he has access to data we do not, combined with the "freedom" to make policy decisions as he chooses (what policy? "Completely debase the dollar" is not a legitimate policy), I imagine he is giddy like a schoolgirl.

It is his own Great Depression.

And my zombie apocalypse, minus the zombies.

There is no great cover-up. After all, the Fed doesn't have to cover anything up. Vice Chair Kohn himself said the Federal Reserve Act of 1913 essentially allows the Fed to do whatever it chooses with no government agency able to keep it in check. Freedom of Information does not apply to a private agency like the Fed. You kids see how this is wrong?

Fruitvale BART: We've all Been There

This was brought to my attention tonight after watching the Channel 2 news.



It is the cell phone video taken at Fruitvale station the morning Oscar Grant was shot to death on the platform. Some of us don't watch TV and have other unicorns to chase so if you've seen this already, I apologize.

If you haven't, and especially if you ride BART, this is frightening. Shot from the inside of the train pointing out at the platform, it adds a frightening reality to a very unreal situation.

At least someone saw it.

Money, Funny or Otherwise



MarketWatch is beginning to freak me out but the commentary on this week's big stories in finance (intrinsically connected to politics, of course, because it is backwards regulation and lack of oversight that got us in this mess in the first place) absolutely blew me away. So much so that I'm tempted to copy and paste nearly the entire thing.

For a while this week, the market was just background noise. Yes, for a few hours during the inauguration of President Barack Obama, the painful pounding of the stock market faded while the nation celebrated another peaceful transfer of power.

But it wasn't long before the respite, if that's what it was, ended. While Chief Justice John Roberts was leading Obama to flub the oath of Office, the market tanked. It was the worst inaugural day performance for stocks in a century or so and underlined not only the challenges facing Obama, but also the limits of his power to tackle them.

The economy is in poor shape, and still getting worse. The earnings season is off to a horrendous start. No sector is immune from the carnage. Big industrial companies, technology companies, retailers and of course the financials are reporting disappointing results and their shares are for the most part getting slammed.

Every once in a while, a company pops out a profit gain or a solid forecast, and investors rush in to buy battered shares, only to reverse course and rush out again when the onslaught of bad news resumes.

Other things are not changing, too. John Thain's venality suggests strongly that stupidity and greed still reign on Wall Street. The appointment of a man who cannot decipher his tax obligations to head the Treasury department at a time when confidence in our leaders is at historic lows suggests the new administration has some blind spots of its own to examine.

The press, for its part, added yet another justification for public disdain by spending much of a presidential news conference this week whining about access to Obama's second swearing in, which happened at night at the White House. An audio recording and a photograph weren't enough disclosure, apparently.

Not that nothing changed. Obama ordered the closure of Guantanamo Bay's prison, banned torture and explicitly rejected the past eight years of government legal policy. He also tightened ethics rules. Whether these actions constitute good news may be up for debate, but there can be little discussion that Obama is heading in a different direction than his predecessor.
I'm not even going to speak on Guantanamo because I haven't researched the issue enough to formulate a position; at the point that I do (if ever), I'll be sure to get back to you. For now, this isn't where my priorities lie.

What does concern me, obviously, is economic policy and, specifically, the clusterfuck of Federal Reserve lending. Reuters reports that while discount window borrowings are down this week compared to last (lender of last resort, my ass, what we have here is robbery via inflation), the Fed is still spewing out exceptional levels of "money", funny or otherwise:

NEW YORK, Jan 22 (Reuters) - U.S. banks' direct borrowing from the Federal Reserve at the discount window slipped in the latest week but remained at hefty levels, showing reliance on the lender of last resort amid the biggest credit crisis in many decades, Fed data showed on Thursday. Banks' overall borrowings averaged $148.30 billion per day in the week ended Jan 21, down from an average $160.72 billion per day the week before.

Liabilities on the Fed's balance sheet, reflecting the central bank's exposure to the battered financial system, totaled $2.023 trillion as of Jan 21, versus $2.041 trillion on Jan 14.


We were told things would change. I guess at least that part of the promise is still true.

What frightens me is that there are still individuals walking around oblivious to what is happening to us. So a few people get laid off, what do they care?

The world is poised for a fundamental shift at this very moment, with all global eyes on Barack Obama as the leader of what may still be the most powerful country in the world (although if we keep cranking up the Federal Reserve spigot, our supremacy is at great risk). There is still some hope that he alone can rescue a financial system bloated with bad debt and being devoured by the cancer of poor risk management and greed.

If that hope can be exchanged for gold somewhere, we might just be saved after all.

If not, head for the hills, kids. When reading MarketWatch is like reading Panzner's "Financial Armageddon," it is time to worry. But if you're here reading this, you've probably been worried for quite some time.

Welcome to change.

Liberaltarian Quesadillas and The Obama Call to Action

Doomsday has a new face!


Last night on my way home from work, I took a detour through 24th and Mission St BART just because I had a little time to kill before my bus to the Peninsula and wanted a quesadilla. I slithered through BART avoiding eye contact (sketchy down there you know) and was approached by what could only be described as a hipster. I thought he wanted a cigarette but worse, he had a clipboard in his hand.

WTF kind of crap does he want me to sign?

The cause awkwardly tumbled from his lips. "Equal rights and..."

I immediately knew whatever rule he was pushing, whatever legislation he was supporting, whatever political agenda this person had, on a personal level this man had absolutely no connection to the material. The exchange between hipster (PBR) and me (JR) went something like this.

PBR: Can I have a moment of your time?

JR: (reluctantly) Sure, what for?

PBR: (deep salesy breath) So believe it or not, it has been 10 years since Matthew Shepard's death in Wyoming, can you BELIEVE it's been that long? Well it has. I'm here tonight because I want you to offer your support and show that you believe in (breath) equalrightsforallLGBTindividualsandthatyoudon'tbelievein (breath) hate crimes.

JR: What exactly is this for? Some bill you are promoting? Some new law?

PBR: (shocked that crazy tattooed girl with the "CRIME SCENE" scarf just questioned his spiel) Uhh, it's hate crimes. They're bad. (breath, resuming sales pitch) So what we are asking for is your monetary gift either monthly or one time...

At this point, I think he realized he lost me and he knew that if he were to continue, I'd chew holes through his vague "platform."

JR: Are you guys actually making money out here doing this? What are you going to use the money for? Is there an actual bill you are trying to push through Congress or what?

PBR: (scared to death at this point) We're going to go, uh, petition Congress.

JR: Who supports you?

PBR: Obama supported equal rights in his platform...

JR: (laughing hysterically) Pffft, Obama won't save us!

Why did I tell you this dumbass story besides the fact that this is a cute sneak peak into the clusterfuck that is San Francisco (and California) politics?

Portfolio.com reports on a recent speech by Van Jones ("a young Barack Obama" according to one fan) in a Massachusetts public library:

"I love Barack Obama,” he said. “I’d pay money just to shine the brother’s shoes. But I’ll tell you this. Do you hear me? One man is not going to save us. I don’t care who that man is. He’s not going to save us. And, in fact, if you want to be real about this—can y’all take it? I’m going to be real with y’all. Not only is Barack Obama not going to be able to save you—you are going to have to save Barack Obama.”

Jones went on to discuss the crisis on Wall Street, the federal budget deficit—“We’re going broke by the second”—and how annoying it can be to listen to people who use a lot of fancy words. “People who know a lot talk weird,” he said. “So you can spend a lot of time listening to people who are educated, and all you get is frustrated, because what they’re saying doesn’t actually land with you. Well, boohoo. Get over it.”
"Not only is Barack Obama not going to be able to save you—you are going to have to save Barack Obama.” Some pretty profound words there, but how many are really listening?

Poor OMGObama has the weight of the world on his shoulders at this point; save the economy, save the planet, save the people, give me a pony, blah blah blah. It does not matter whether this man truly is a puppet for the Global Elite agenda or an Illinois Senator trying to change the world for the greater good of all of us, the fact remains that "Obama will save us" is an all-too-common and frightening sentiment rising from America these days.

Psst. Barack cannot and will not save you. It is up to you to pick your own battles, understand what is going on here, and protect yourself from the fallout. Plain and simple. Just like with the collapse of the economy, it is our own ignorance that allowed us to get here and it is what allows us to continue limping along; the call for economic stimulus shows just how ignorant America truly is - with $1.2 trillion in obscured FAILout and "liquidity" already souring the Fed's Bizarro balance sheet, how the fuck can we afford to toss a few extra trillion on top of it? INFLATION, people, it's not a complicated concept.

The beatings will continue until morale improves, kids. Keep that in mind. And for the love of God if you are going to try and evangelize a cause, please have at minimum a remedial understanding of said cause.

What Obama and Geithner Can Learn from Dope Fiends

the war on drugs vs the war on bad government


There is a common method of dealing with hardcore drug addicts called "behavior modification" in which counselors try to address the core issues that lead to drug use (as opposed to the use of drugs themselves) in order to repair the overall malaise. Intensive drug treatment programs include facets of behavioral modification that require these individuals to be accountable for nearly every minute of their lives, transforming from out-of-control addicts into responsible members of society by rebuilding their day-to-day habits from the ground up. Using the positive and negative reward model (emphasis on negative), individuals are punished for any deviations from the program as proponents of behavioral modification insist that all rules must be followed in order for the behavioral "re-write" to fully take effect.

One small part of the larger behavioral modification concept deals with "small permissions" - the theory is that these individuals' behavior is so tied into routine that once they are "re-programmed" with healthy behaviors in the place of negative ones, even the smallest deviation from that positive routine can lead to catastrophic disaster.

Imagine, if you will, a 50 year old man who has been using hard drugs since his teens. This individual has been in and out of prison, never held a legitimate job, and knows little but manipulation, dishonesty, and violence. After entering the treatment facility, he is slowly reconditioned with a 6:30a wake up routine, regular meetings, scheduled meals, daily and weekly activities, and even structured "fun time" on the weekend like visits from family or day passes. Gradually, this person learns to appreciate the structure and thrives because of it. He is slowly reintroduced into society, first by securing a job while still living in the residential treatment facility, then later by transitioning into off-site housing while maintaining a connection to counselors and fellow residents of the program.

On a day pass one weekend, this individual tells counselors he will be going out to coffee and an AA meeting. Instead, however, he decides to make several detours on the way. He stops at a video store, a book store, and takes a walk through a park to get to the meeting instead of taking a bus directly there.

To you or I, this means nothing. Who cares if you make a detour?

But to this person, his routine is everything. It is the reason he is able to function on a day-to-day basis and by deviating from what he told program counselors he would be doing, he is taking what these facilities and programs call a small permission.

Small permissions, in the context of behavioral modification programs, almost always lead to larger permissions. First he makes detours, next he starts arriving back to the treatment center later than he was supposed to, and next thing you know his behavior has regressed (though his remaining structure may make it appear as though he is still holding it together) and he is back on the streets sucking down a paper bag of Cisco. Sure, it's an extreme example but all-too-common in the behavioral modification model.

So what can Obama and Geithner learn from this model? I'm certainly not implying that either of them has a drug problem but I am applying the concept of "small permissions" to government as a whole. There is no such thing as "a little issue" when 305 million+ Americans are counting on you to get things right.

Geithner's tax issue sends a very clear message from OMGObama's Administration that what is good for the goose is not good for the gander and you better just sit there and deal with it. I don't know about you but I feel as though Team Obama and the Senate pissed all over the country today by continuing forward with Geithner's confirmation. I do not have it out for him and want nothing more than for him to pull this one off but I question what sort of leadership we can expect under an administration that looks the other way when their own make errors.

Arguably, Geithner's tax drama isn't even a small permission but a large one; if Geithner were a dope fiend, he'd bypass the deviation and coming home late and go straight to paper bag of Cisco.

I'm not suggesting Geithner go into drug rehab for his bad tax habit of course but he and Team Obama may stand to learn a thing or two from these models. Stay away from the small permissions. When larger temptations arise (like, say, the urge to misappropriate some $700 billion in taxpayer money?!), what will keep the Treasury from giving itself permission to do as it pleases?

The hypocrisy and financial incest is nearly overwhelming at this point. As the Huffington Post so wisely pointed out recently, let's just put aside Geithner's tax issue - how about the epic mismanagement of the Citigroup deal?

The questions I think we need asked and answered are partly about the past but, more important, about the future. Can Geithner admit that he erred as head of the New York Fed in failing to exercise proper oversight over Citigroup? And, more important, what will happen in the future as we grapple with the effects of the financial crisis that will likely stretch well into a second Obama term and even beyond? How tough will Geithner be on the financial leaders and institutions? Beyond the grand public statements of a new toughness, what will Geithner do when confronted with the next new wave--and, believe me, it will happen as sure as the savings and loan crisis exploded in the 1980s--of madness driven by a group of people who are sure they can ride a bubble and defy the laws of sane economics. What will he do when asked to look the other way or cut a major financial institutions some slack?

I guess I have to say that, if you were trained at the school of the Robert Rubin way of doing things, there is a legitimate cause for worry.


Now Robert Rubin could be a dope fiend. He certainly handles money like one.