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Archive for November, 2011

Want to get a better perspective about what we (the 99%) are up against?

Follow the links down the rabbit hole

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The shocking truth about the crackdown on “Occupy”

The violent police assaults across the US are no coincidence.  Occupy has touched the third rail of our political class’s venality.

             guardian.co.uk  Friday 25 November 2011 17.25 GMT

I noticed that rightwing pundits and politicians on the TV shows on which I was appearing were all on-message against OWS. Journalist Chris Hayes reported on a leaked memo that revealed lobbyists vying for an $850,000 contract to smear Occupy. Message coordination of this kind is impossible without a full-court press at the top. This was clearly not simply a case of a freaked-out mayors’, city-by-city municipal overreaction against mess in the parks and cranky campers. As the puzzle pieces fit together, they began to show coordination against OWS at the highest national levels.

the scales fell from my eyes. Of course, these unarmed people would be having the shit kicked out of them…

when you connect the dots, properly understood, what happened this week is the first battle in a civil war; a civil war in which, for now, only one side is choosing violence.

It is a battle in which members of Congress, with the collusion of the American president, sent violent, organised suppression against the people they are supposed to represent. Occupy has touched the third rail: personal congressional profits streams.

Even though Occupy are(as yet) unaware of what the implications of their movement are – those threatened by the stirrings of their dreams of reform are not…

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Multi-Trillion Bank Bailout – Leads to Multi-Billion Bank Profit

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                                 *****And*****

Secret Fed Loans Gave Banks $13 Billion

~ Bob Ivry, Bradley Keoun and Phil Kuntz – Nov 28, 2011 1:01 PM GMT+1300
Bloomberg Markets Magazine

The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.

The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates…

Total assets held by the six biggest U.S. banks increased 39 percent to $9.5 trillion on Sept. 30, 2011, from $6.8 trillion on the same day in 2006, according to Fed data.

Employees at the six biggest banks made twice the average for all U.S. workers in 2010, or an average of $126,342 per worker, according to data compiled by Bloomberg. That’s up almost 20 percent from five years earlier. Average pay at the banks in 2010 was about the same as in 2007, before the bailouts.

“The pay levels came back so fast at some of these firms that it appeared they really wanted to pretend they hadn’t been bailed out,” says Anil Kashyap, a former Fed economist who’s now a professor of economics at the University of Chicago Booth School of Business. “They shouldn’t be surprised that a lot of people find some of the stuff that happened totally outrageous.”

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Until we understand what we are fighting, we are doomed to be suppressed – and oppressed.

Reality is strangely distorted down the rabbit hole.  Once you have been there though, you will never see things the same way again.

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[Extract – presented without comment. ~R]

Woman Pepper Sprays Shoppers To Get X-box.

~ Brandon Smith of Alt Market.

It never fails.  Every Black Friday we get yet another heaped helping of pure unadulterated, ignorant, mentally deficient, bottom feeding, fat-saturated, sheeple mania.  Every year it gets worse.

And, every holiday season I am faced with the painful question of whether or not these people are actually worth saving. 

My answer so far has always been a begrudging “yes”.  Many of them have been conditioned by a society on the brink of collapse, not just of economy, but also of conscience.  That doesn’t mean, however, that I excuse this kind of behavior.

Frankly, if some mongoloid Wal-Mart shopper tried to pepper spray me in the face for a video game – I would beat them into cranberry sauce and drink some delicious eggnog to celebrate.

Is this a well balanced response?  Probably not.  But then again, they would likely think twice before pulling the same stunt on anyone else.  Actually, in my humble opinion, at least half the population of this country needs a good smack upside the head.  Seriously……this situation is getting uncomfortably crooked…….

Imagine how these same people might act in the event that they not only get no Xbox, but no food due to financial instability.  Imagine a 200 pound spoiled toddler with an addiction to immediate gratification being told “you are owed nothing”

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Karl: Article                [edited ~R]

…Budget deficits are unsustainable over the intermediate and longer term – always.

Eventually investors refuse to continue to fund that which the politicians refuse to pay back, and they revolt.

Leaving the nation with only two options: Cut the deficit spending  – or attempt to force the entire population to fund the previous deficits by depreciating the currency.

Here’s the problem with the second path, which everyone (other than bond buyers) seems to think  the US will choose: Bond buyers don’t intentionally lose money either – and this will force yields a lot higher.  See the 1980s for “how much”, which in turn makes rollover of the existing debt impossible.

Japan, which has siphoned off the savings of their people for two decades has now backed themselves into a corner to the point that a mere two percent increase in their interest rates drives their debt service costs above all tax revenue.   the point of not just technical bankruptcy, but actual bankruptcy, as such would force an instantaneous shutdown of all government functions!

Remember that Italy has a primary surplus – that is, ex borrowing costs (interest) and deferred expenses(e.g. promises to retirees), they are taking in more in taxes than they are spending – and that still doesn’t matter.

The Markets has surmised that these deferred promises and interest expenses are going to go up, not down, and thus the primary surplus is an invalid measurement of fiscal health.  They want an actual cash-accounting surplus – and since there isn’t one, bond yields are going up – fast.

There is no escape from such a hole, other than to cut spending to the point that you have an actual cash market surplus.

Then instead of rolling over debt at an unattractive interest rate, you pay the maturing bonds and tell the Bond Market to go stick it.  That is the only means of dealing with such a situation when all is said and done.

All the strum and furor sounds nice, but it’s not reality.  You can bludgeon and bloviate, but in the end analysis if you are selling something, it only trades where there is both a willing seller and a willing buyer.  And now the buyers are demanding more interest or they’re not going to purchase – period.

The wise policy would be to stop the deficit spending on our own before the market forces the issue.

Contrary to popular belief we can do it, but the requirement to slay sacred cows – especially in the Entitlement area – is politically difficult. Nonetheless, doing it on our own terms rather than a forced slash-and-burn will be far less disruptive.

And, if we do not deal with the problems now, this day is coming, and much sooner than most expect.

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Link to article.

Difficult – yeessss… that’s one way of putting it.  Actually, under our current system of “democracy“, it is quite simply impossible.  If we are going to find a way to do what is necessary, then it will not be within the confines of our current systems. That is constructed and evolved to maintain the status-quo. And it will maintain it right into the grave.

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How much energy have you saved recently?  How does that compare/balance against this…?

Thermal plumes from gas flares in Siberia

Tech Talk – Gas Flares and Their Significance in Russia

Or…

the North Sea, Nigeria, MENA, GoM…

Ever get the feeling you are pissing into the wind?

” The NOAA report indicates that around 160 billion cubic meters of gas is flared each year. “

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Behold The New Anschluss: “Prepare To Give Up Significant Sovereignty”

“… a much more comprehensive approach to economic governance is now the priority for the euro area. And this means more economic and financial integration for the euro area, with a significant transfer of sovereignty, to the EMU level, over fiscal, structural and financial policies.”    ~ José Manuel González-Páramo:  ECB executive board member

In order to protect people… Europe must be prepared to give up “significant sovereignty” (sounds better than Anschluss)… [to], of course, Germany.

In other words – courtesy of one failed monetary experiment, Germany will succeed without shedding one drop of blood, where it failed (rather historically) some 70 years ago…

[edited ~R]

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[Edited – from Mish]

Only True Role of Central Banks is to Print Money – Why Else Have It?

It is precisely why they they should be eliminated. Far from being “inflation fighters” they are the very source of inflation.

More correctly: Fractional Reserve Lending and Central Bank Printing do not “cause” inflation, they “are” inflation.

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Austerity vs Stimulus

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The Great False Dilemma: Austerity vs. Stimulus

~ Chris Martenson             [extracted/edited ~R]

“Like the issue of… ’Is it better to have austerity or stimulus?’  Well, the basic problem there is that we’re not having a quality conversation on the subject.” ~Ray Dalio

When we witness the clash between the Austerity and Stimulus camps, on the surface there is the appearance that a true debate is taking place between diametrically opposed economists. For example, Austerity folks correctly note that our economy has been badly weighted towards consumption for some decades. They want to clear out the excesses, let the malinvestments fail, and elect an overall path of acute economic pain in order to reset the system. Stimulus advocates find such plans completely unnecessary, if not downright masochistic.

Armed with a more humanistic approach, Keynesians want the government to run large deficits to help the private sector deleverage, which of course could take years  While interest rates are low why not ease social and economic pain through further [govt] borrowing? After all, the private sector will simply use this spending to repair its own balance sheet. Once a tipping point is reached, then the private sector can start taking on new credit, increasing tax revenues to government, and thus knocking down the debt incurred during the recession (or depression). What’s not to like?.

Meanwhile, an example of the austerity argument comes from Those in favor of fiscal shock and awe, persuaded by the view that government spending “crowds out” the private sector, and that government misallocation of capital nearly always exceeds the private sector’s similar mistakes.

Frankly, I am sympathetic to the sincere urges on both sides of this debate.

Why not conduct reflationary policy indefinitely, at least as a humanitarian exercise?  And also, why not kill off a number of regulatory agencies, and promote the growth of small business?

Internal to this debate, however, are a number of shared assumptions about their prescription not only delivering the economy back to growth, but also to trend growth – an eventual rejoining, if you will, to the pre-2008 trend.

A rather serious problem in the ability of Developed Economies to coherently allocate resources started showing up well before the 2008 crisis. This status quo, made in part by policy mistakes, credit creation, and the energy limit, still remains today.  Crucially, neither stimulus nor austerity will dislodge this status quo. Unless, of course, by austerity we mean to intentionally collapse the system, or if by stimulus we mean to engender a runaway inflation that will eventually yield the same result.

 What the system needs instead is a more targeted transition process, not a radical simplification (Joseph Tainter’s term for collapse).

However, underneath this, all of the poor allocation of existing resources continues apace, and this is the central explanation for why the economy cannot create jobs: The connection between needs and actual production is badly broken.

[ends]

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Interesting article, and raises some points worth considering.

Although I am still of the Austerity camp (a deep purging still needs to be done), it is worth considering if the Austerity vs Stimulus debate is a false dichotomy.  And what exactly is the problem your prescription is trying to fix… ?

~R

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