Sciencemadness Discussion Board

Exploitation of the global economy, the coming collapse

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anotheronebitesthedust - 1-8-2012 at 18:41

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W T F ! ?

franklyn - 2-8-2012 at 17:58


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497 - 2-8-2012 at 18:20

Any bets on when WW3 breaks out?

hyfalcon - 2-8-2012 at 19:08

Right before the election is Obama thinks he's not gonna win.

DerAlte - 3-8-2012 at 10:16

So, after a day in which Draghi was a drag on the market, the Street got fed up with the Feds, and the The Old Lady of Threadneedle Street yawned, irrational exuberance springs anew (apologies for the atrocious puns). The job creation numbers were actually positive, if anaemic, but the inaction of the CBs was forgotten or dismissed.

The interpretation of this (concerted?) inaction may signal a message that the bankers feel they have done all they can and regard the problem as political and not soluble by fiscal manipulation.

@ Anotheronebitesthedust
Your posted video was absolutely fascinating. At first I thought just another conspiracy theoretician, then I classed him as a political satitist, but his analysis of the interplay of money and power was good. I look forward to his part 2. Only later I realized his theme was social justice and he allied himself loosely to the ‘Occupy’ and ‘Tea Party’ movements, if one can call them that; or at least, to the reality of government control of one’s life. The satire showed in his final accreditations!
Der Alte

franklyn - 4-8-2012 at 06:29

Must read
Interview with a High Frequency Trader

The reason why market volume has diminished to such an extent is that it only
may represent 30 % of actual , the rest occurs in so called " dark pool " trades
not on the exchange itself. This means that price volatility is more pronounced
as a result of smaller volume trading. This opens the field to computerized
" High Frequency Trading " to manipulate the price moves. Instituting a 5 second
wait before a buy or sell order is canceled, would end the practice of faking orders ,
which is really no better than sending a false fire alarm. Without human involvement
is another way of saying without human reason. Machines faking each other out
is is not a rational way to raise capital , the reason for the market in the first place.

The real economy is no longer the official one.


The marked rise of the €uro today brought down the price of 30 year U.S. treasuries
the interest of which has been swinging up & down and is up from 2.48 to 2.68 in a day.
A temporary setback which given the volatile 5 dollar trading range of TLT we can expect
it to be back up by the end of next week.

Central Banks Ambush Dollar send stocks higher


As if you didn't already know


DerAlte - 4-8-2012 at 21:27

I have been researching Peter Joseph the film maker and lecturer and the Zeitgeist Movement a little on the web. For an intro, see Wiki. It appears they are part of a vague association that promotes what might be termed the New World Order, essentially devoted to a new global society based upon technology. Peter Joseph appears to be a bit of a loose cannon allied to Zeitgeist.

While PJ’s analysis of the woes of modern civilization rings a certain bell ot truth, at least from the librtarian view I espouse, the synthesis of the way out from them is essentially a world controlled by technocrats, in other words a substitution of one form of dominance for another, which seems to contradict his thesis entirely.

His insistence on systems engineering (which I used to practice before retirement) predicts a perhaps more frightening a view of what is essentially a Brave New World than Huxley’s. It seems to ignore totally a little spanner in the works called human nature, very much in the same way the early Christians did. Or, in today’s terms, human psychology. So competitiveness will go away? Think Olympics, currently. It exists purely from that essential source of creative endeavor, competitiveness.

He couples the plight of the starving millions of the world’s population with an explosive technology that will solve all their problems with a robotic future in which – what? What will these starving million do? By some miracle, they will all be intelligent enough to tend the machines all day making sure the bots don’t play up and screw up everything due to mis –programmed algorithms created by the technocrats. Absolute unadulterated BS of the first water. At least as soul destroying as Brave New World (at least they had their soma – and today they have their contraceptives if denied the soma!); and perhaps as bad as Orwell’s 1984.

The Knight fiasco on Wall Street last week shows what can happen to an organization that puts blind faith in ‘technology’. Computers will only do what you tell them if you feed them a runnable algorithm without a potential instability. And, GIGO even with a fundamentally sound algorithm. As for the unsound algoritm, Data In, Garbage Out or Cannot Compute. Incidentally, thanks, Franklyn, for that article on HFT – it was interesting.

Peter Joseph’s stance on morals and ethics was correct – they represent no more than the customs of the people extolling them. (The Latin and Greek roots of the words mean just that and no more). Of extant religion, only Buddhism (which is more a philosophy than a religion) gets it right – morals are merely rules to allow civilized conduct. The main precepts of these are incorporated into the body of law called common law, but law itself has absolutely nothing to do with morality apart from this ancient input. One only has to look at Islamic law today to see the vast discrepancy, and western laws too impose strict limits on human freedom of action and thought. So you cheered the Arab Spring? Wait for the Arab Winter, folks. It’s already autumn.

Another factor working against the remote possibility of Peter Joseph’s vision is what one might call Global Indifference. Put crudely, one cares about one’s family, one’s friend’s, one’s neighbors, one’s town, the nation and the cultural system it promotes, roughly in that order. Fundamentally, no one really cares a rat’s ass about some obscure tribe on some remote location on the globe. Logically, why should they? What happens in Pongoland is of zero interest to Joe Sixpack who has enough of his own problems with his plastic money and crippling mortagage debt.

Enough ranting, but this is in line with the 497’s thread title - The Coming Collapse.
Der Alte

franklyn - 6-8-2012 at 09:46

@ DerAlte

The triumph of "systems engineering" on the heels of "operations research"
was the Marshall Plan , unlike the ponderous doctrine stifled soviet plans
which serially failed. The end does justify the means when it is subjective.
Fundamentals of economic function determined by demographics can be
ignored ( at peril ) but it shows where we inexorably will end up.

Hints of distopia from around the web:

" Detroit has more than 30,000 vacant houses, municipal services are minimal,
large urban sectors are devoid of residents, a quarter million people moved out
of Detroit between 2000 and 2010, leaving just over 700,000 residents in a city
originally built for 2 million.'

" Abandoned homes and villages dot the Latvian region of Latgale, near the border
with Russia. In the town of Merdzene, a new school stands by an abandoned
Soviet era apartment block covered with shattered and taped windows in a scene
reminiscent of Chernobyl."
( my comment )
My cousin was visiting London during the Queen's Jubilee ,
she told me there aren't any English over there , everyone
is either a foreigner or from the commonwealth countries.

From here _
" Dozens of wealthy Greeks, among them politicians, bankers and shipowners,
have bought high-end properties in London in the past three years seeking shelter
from the country’s deepening crisis, which has left millions of ordinary Greeks
squeezed by tough austerity measures."

Greece on intravenous feeding _

Harry Dent


[Edited on 7-8-2012 by franklyn]

DerAlte - 6-8-2012 at 10:18

Although rumors of the imminent death of Social Security have been rampant for some time, they have been greatly exaggerated. However, the following is worth a look:

Is Social Security still a good deal for workers?
By STEPHEN OHLEMACHER Associated Press Sunday, August 5, 2012 9:42 AM EDT

WRT my type of systems engineering, can anything beat the success of Mars Rover Curiosity or the repair of the faulty Hubble mirror? Superb!

And, regarding that, the media seem totally confused concerning what is science and what is engineering. It is true to say that many scientists do actually operate as engineers but the reverse is rarely true, although engineers do have to know their basic science and especially mathematics, apart from seat- of- the- pants designers. And all engineers should have a basic grounding in economics. My father used to say, as a civil engineer, that an engineer is a man who can do a job for you for a penny that any fool can do for a pound…

Der Alte

franklyn - 7-8-2012 at 14:34

" Don't fight the Fed " has now become don't fight central bank conspiracies.
This is what Draghi meant " it will be enough " when he warned not to short the €uro.

Hyperbole aside , if nothing else now is a good entry point to purchase Calls on TLT.
The "short squeeze" prompted buy back of the U$D/€UR is topping out.
Stampeding the currency exchange market is merely a momentary stunt.
Everything hinges on ECB/German purchase of other sovereign bonds
which is not ever likely to occur.


[Edited on 8-8-2012 by franklyn]

DerAlte - 8-8-2012 at 10:15

If you own stocks, are thinking of doing so, have a 401k, or are just interested in the market, this piece by Cramer on cnbc says it all in a nutshell (I usually cannot stand the man, but sometimes he speaks truth!)

The Biggest Market Myth There Is?

And their other ranter, Santelli, has this piece exposing the other current myth:

And you wonder why the US market struggles upward? It’s the only game in town, even if it has the appearance of minor league.

Der Alte

franklyn - 10-8-2012 at 07:28

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anotheronebitesthedust - 12-8-2012 at 16:22

I was a child during the Soviet collapse so I don't know much about it. But I have a theory that an empire will inevitably collapse as a result of the exponential increase in power gained by the government which weakens the population.

As the government grows powerful and dominant, the population will in turn grow weak and submissive. This eventually leads to uncompetitiveness and socialist policies. It's a catch-22 because the government continues to amass more powers with socialist policies while the population requires more aid, leading to the entire structure collapsing in on itself, perhaps with a quick foray into communism first.

WIKILEAKS: Surveillance Cameras Around The Country Are Being Used In A Huge Spy Network

franklyn - 13-8-2012 at 08:24

“ Confidence is the feeling a person has before he fully understands the situation.”
— Author unknown

Loans in U.S. in decline

Transaction in commercial paper has all but ceased in Europe

Transaction in real estate has all but ceased in Europe
" The commercial property markets in Spain and Italy have all but collapsed ,
according to research published this morning. Just three commercial property
transactions ( office blocks , shopping malls , etc ) took place in Spain in the
second quarter of 2012 , compared to 58 a year ago. In Italy, only two
commercial properties changed hands, down from 56 in Q2 2011."

Preparing for doomsday

Will this be the " just shoot me moment "
Tomorrow, Greece is aiming to raise € 3.125 billion through an auction of short
term bonds. That's a much larger sale than usual , with the money needed to pay
a € 3.2 billion bond that matures on 20 August. There is speculation that Athens
may fail to get the full auction of three month bonds – will there be sufficient
demand for so much Greek debt ?
Update : Still propped up

Up , down , and back again
TLT has been substantially higher in August than in the preceding few months
for the last 9 years.

Dark pools of whale traders & high frequency computer
trading in a low volume market , no wonder it defies logic.


[Edited on 14-8-2012 by franklyn]

DerAlte - 13-8-2012 at 12:47

Re Education, the following touches on what I wrote earlier in this thread:

Why College May Not Be Worth It

And this one deals with dishonesty in scientific publications (still rare, however)

What I am more concerned about is the level of usefulness. There appears to be an increasing amount of funded ‘research’ into such trivia as which side do you sleep on, how college undergrads react to photos of the opposite sex, and innumerable pseudo-pschobabble nonsense, etc. Who provides funding for this crap? Well, ultimately J.Q.Public, either through the Government or Companies, who pass the cost it on to you
A scientific paper may only have an audience of a very few, but it is still valid (if honest and original), however obscure. Populist rubbish is another matter.

Der Alte

DerAlte - 15-8-2012 at 11:29

WRT the Greek short term bond auction item mentioned by Franklyn above, I wonder how short term and who bought the junk. No doubt predicated on new bailout money for repayment, it seems some people (banks, one suspects) are prepared to take large risks for short term returns. Perhaps we might see a Gibor invented? How about a European International Overnight Rate? Greece to Exit Euro Zone Next Month?

And re ‘whales’ see Does Buffet know something I don’t? I bet he does – he sold two of my favorites.


I wrote above
There appears to be an increasing amount of funded ‘research’ into such trivia…
. Here’s an example:

Nonsocial Transient Behavior: Social Disengagement on the Greyhound Bus

Here’s a short quote for laughs:
“Based on two years of observations and engaging in informal conversations with passengers on Greyhound Line buses ……
Using ideas from Goffman's civil inattention theory, Lofland's thoughts on strangers, and symbolic interactionism, I explain what I call “nonsocial transient behavior” and “nonsocial transient space.” The reasons nonsocial transient behavior emerges and thus encourages disengagement are identified as follows: uncertainty about strangers, lack of privacy or absence of a personal space, and exhaustion.”

Er, did you mean

Uncertainty about strangers: I don't like the look of that guy there with the beard and dreadlocks...

Lack of privacy: Shut up, dickhead, I'm working on this program on my laptop...

Absence of a personal space: Move your ass over, Fatty. They should have charged you for two seats...

Exhaustion: Sorry, pal, I couldn't care a rat's ass about politics. Let me sleep...

Material for an MS (more shit) thesis? Or maybe even a PhD (Piled higher and Deeper)? I’m sure there must be a computer program that converts what is common experience and knowledge into a suitable type of pseudo-scientific hyper language for the purpose of thesis writing.

Der Alte

franklyn - 15-8-2012 at 13:17

The Greek 3 month bills get bought up by the insolvent Greek banks which pledge
it as collateral to the European Central Bank ( ECB ) to obtain more lending to
remain liquid while they continue to hemorage money. That's why it's called " high "
finance , you have to smoke bath salts to understand it.
For a lucid view of things listen to Mark Grant tell it.

Nigel Farage explains _
From Fox News August 14 ,
Same video on youtube
Lyrics _
"we're only making plans for Nigel"
"we only want what's best for him"
"Nigel just needs this helping hand"


[Edited on 16-8-2012 by franklyn]

DerAlte - 17-8-2012 at 11:38

Since it’s the dog days and silly season on Wall St. and most of Europe is taking it's ten week vacation, although Merkel returned from hers and made some placatory noises and all seem to be pals again over the pond, the Market is flat-lined for the last week. Bonds too, although interest rate went up a bit. Even Finland said something about how unthinkable a Europe without the Euro would be! So all I can offer is the following, possibly more suited to Whimsy:

Facebook Is Worst Performing Stock Over 3 Months

You’ll Regret Not Buying Facebook, Right Now: Pro
One wonders where he got his MBA – Disneyland? Sure looks like Mickey Mouse economics; or maybe Goofy’s.

Accel Unloads Facebook on Its Own Investors: Sources
Watch those limited partnerships!

Re the above: Making Money in Mobile Remains Elusive: Ex-Apple CEO

FB, down a further 3% today in a flat market. It will soon be time for shorting again – wait to see if it bounces back a bit or if it stabilizes after the current lockup release before considering a move. Short if it does! At a P/E of current 108 it’s worth about $5, and I am being generous.

If you bought at $38 you were zuckered, man.

The following quotes from a comment on the article say it well:

(1) No one except a kid or a fool dare post anything on FB for fear of their own boss, family, friends or community.
(2) Keeping up with the family and old friends isn't all it's cracked up to be.
(3) Click a FB ad? Really? No freaking way. Why would anyone use FB to look up products to buy anything? We have Google for that, and, their ads aren't nearly as intrusive.
(7) FB advertisers are going to advertise for brand recognition? Why? We have Youtube for that kind of advertising. The kids may put up with watching an ad for a Youtube vid but to go to a FB page?
(8) Everyone from retail investors to banks to brokerages got burned on the FB IPO. You think Wall Street is going to forgive FB for that IPO? Not in this lifetime Homes...

Predicted halflife of FB, ~ 1yr. There are plenty of other so-called media out there; it is not even that original.

Der Alte

anotheronebitesthedust - 18-8-2012 at 08:27


com·mu·nism a system of social organization in which all economic and social activity is controlled by a totalitarian state dominated by a single and self-perpetuating political party.

With a national debt of 16 trillion and no intent on paying it down, it is painfully obvious where the US is heading. Communism requires complete submissiveness to the state though, which means the population becomes weak and vulnerable to outside competition. Capitalist America was able to collapse Communist Russia rather easily.

In other words Communism will require world domination in order to succeed. And of course they won't be making an official announcement of their intended goals anytime soon.

DerAlte - 21-8-2012 at 08:54

Interesting analysis of the problems caused by debt and subsequent danger of the demise of capitalism: unfortunately, only in video, with a transcript :
The New Depression?

And, if you can stand Cramer and his rants, a comment on FarceBook:
Cramer: You Need to See Thiel BUY Here

Der Alte

franklyn - 22-8-2012 at 06:45

The new normal

Follow the money


60 Minutes - The Speed Traders (June 5, 2011)


[Edited on 23-8-2012 by franklyn]

AndersHoveland - 22-8-2012 at 08:40

Erkki Tuomioja, the country’s veteran foreign minister and a member of the Social Democratic Party... had a copy of the Economist on his desk. It had a picture of Angela Merkel, the German Chancellor, reading a fictitious report entitled “How to break up the euro”,

I hope people realise that The Economist is just another form of media, with all the same type of propaganda as any other major media source. But this magazine may be even more dangerous because it is being read by those making important decissions. Anyone who can shape politicians and economist's perception of the economy also wields a considerable influence over the economy.

Why did all the Western governments get into debt? There was no war. And where is all the compounding interest payments going to go? from taxpayers to wealthy investors.

[Edited on 22-8-2012 by AndersHoveland]

Rosco Bodine - 26-8-2012 at 13:48

Regarding fiscal realism and the need for government operating budgets .....

franklyn - 31-8-2012 at 16:47

TLT closed today 127.75

I'm back in the money again , yes !
I'm back in the money again.


All eyes on Europe the first 2 weeks of September


franklyn - 4-9-2012 at 08:35

" The smart money, as represented by the typical hedge fund, is lagging the prices represented
by the indices, because they can see the size of the potential crash and are aware the risk is
more likely than not."

Chaos ahead

" The central bank of Spain just released the net capital outflow numbers and they are disastrous.
During the month of June alone $ 70.90 billion left the Spanish banks and in July it was worse at
$ 92.88 billion which is 4.7 % of total bank deposits in Spain. For the first seven months of the
year the outflow adds up to $ 368.80 billion or 17.7 % of the total bank deposits of Spain and
the trajectory of the outflow is increasing dramatically. Reality is reality and Spain is experiencing
a full-fledged run on its banks whether anyone in Europe wants to admit it or not."

•6 September: Spain auction. Bonds
•18 September: Spain auction. Bills
•20 September: Spain auction. Bonds
•25 September: Spain auction. Bills
•4 October: Spain auction. Bonds
•16 October: Spain auction. Bills
•18 October: Spain auction. Bonds
•23 October: Spain auction. Bills


DerAlte - 5-9-2012 at 09:33

ECB Chief to Propose Unlimited Bond Buying: Report

Excerpt: << The euro gained versus the dollar and European stocks got a short-lived boost after a report that Mario Draghi, the European Central Bank chief, would propose unlimited bond buying at a meeting on Thursday. >>

Fed Watching ECB Just as Closely as Markets

Excerpts: << The Federal Reserve, which meets next week, will be watching Thursday’s European Central Bank (ECB) meeting just as closely as financial markets as it mulls whether or not to deliver a monetary boost to a fragile U.S. economy….
“What the ECB says on Thursday is important to the Fed because any disappointing news could trigger a fresh bout of market volatility and uncertainty. That in turn could persuade the Fed to deliver monetary easing via quantitative easing at its September 12-13 meeting, especially if any bad news from Europe is followed by weak U.S. jobs data, says Jim Awad, Managing Director at Zephyr Management in New York.” >>

Pimco’s Gross: Fed Is Harming, Not Helping Economy

<< “A lender will not easily lend money to an obese over-indebted borrower — that much is clear — but she will also not extend a check when the yield, carry and return on investment is so low that it cannot compensate for historic business model overheads," Gross, who is also the manager of the world's biggest bond fund said. >>

Productivity Posts Sharp Gain as Labor Costs Come Down

<< Productivity increased at a 2.2 percent annual rate rather than 1.6 percent, the Labor Department said on Wednesday. Productivity, which measures hourly output per worker, fell at a 0.5 percent rate in the first three months of 2012. >>

Gold Set for Dramatic Fall If Central Bankers Disappoint

<< The recent rally in gold, which touched a near six-month high this week, is unlikely to last, say commodity analysts, who forecast prices could fall 10 percent over the next month if central bank actions disappoint….
… The ECB is scheduled to meet Thursday and the Fed next week, and Gilman warns that a sharp fall in gold prices could be coming very soon if the outcome of these central bank meetings disappoints.
“I’m expecting more rhetoric and little in the way of concrete action. The fall in gold could happen as quickly as this week, as we start to see Europe hasn’t been sorting itself out and the solution to solving the debt crisis is not near,” Gilman told CNBC. >>

We are all waiting for you Draghi! Say something sensible...

franklyn - 6-9-2012 at 07:00

Ten Major Headwinds to Recovery

1. Boomers heading into retirement have insufficient savings and are done spending.

2. Student debt service holds back home buying, marriage, and family formation.

3. Attitudes towards lending, borrowing, and home ownership have changed. Ability
. and willingness of individuals and businesses to take on more debt has shrunk
. dramatically as paying off existing debt takes precedence, deleveraging in the face
. of contraction and hoarding cash as insurance against uncertain prospects.

4. Bank bailouts at taxpayer expense left banks intact but did nothing for households
. deep in debt which continue to sell off at a loss further depressing an already bad
. market.

5. Tax policy encourages flight of jobs and capital overseas to growing economies.

6. Technology now serves to destroy more jobs than it creates.

7. Untenable pension funding shortfall at the city, state, and federal level can no longer
. be put off.

8. Public unions and collective bargaining are at the heart of the pension mess as well
. as the heart of numerous city bankruptcies.

9. Artificially low interest rates weakens those on fixed income.

10. Commercial real estate bust on top of housing bust limits further job expansion.



DerAlte - 7-9-2012 at 11:42

The following is a must-read for anyone trying to understand the complexities of Middle Eastern politics and religions. That this important part of the world is essentially in collapse and in a major transitional phase now is patent. To my mind the Middle East, the area where all the connected religions of Judaism, Christianity and Islam were invented, is the prime example of why religion can be in many ways a curse to mankind. Richard Engel is far the best correspondent in the area – he can talk Arabic one-on-one with the common man and has a deep undestanding which is never allowed to flourish under the 2 minute sound bite of the media news. Here he does look at the problems in some depth.

The Arab Spring is dead -- and Syria is writing its obituary: News Analysis
By Richard Engel , NBC News Chief Foreign Correspondent
Back at the ranch: worth a read:

US health care: It's officially a mess, institute says. By Maggie Fox, NBC News


Der Alte

franklyn - 11-9-2012 at 17:31

In a few more hours from now 9:30 eastern standard time at
around 5:00 am on 12 - 9 - 2012 , this will all be academic.


and so it goes


Another FED non-event due tomorrow


[Edited on 12-9-2012 by franklyn]

DerAlte - 12-9-2012 at 22:21

Did anyone shout whoop-de-doo? not yesterday, not in Euroland nor here..

In Franklyn's list, take especial note of his last article re "euro-a-good-short" - it says it all.

Der Alte

franklyn - 13-9-2012 at 19:27

Coordinated central bank action has spoken.

Straight from the 5th Dimension , a synopsis of the announced FED policy
( click off the [X] of the annoying on screen add to be able to read the lyrics )

The close coupling of the EUR/USD rate with FED easing for the meantime
assures the €uro will be buoyed. Already despite continued treasury bond
buying those rates are up substantially. The 30 year is back up to 3 %
( it's been dropping for the last 8 trading days hitting 3.1 % this morning )
and the TLT fund may very well head back down again to the $110 year low.
While I don't pay much heed to this site's forecast it does happen for now
to correlate with the current trend.
Technical analysis _
Finally the chart comparing the TLT treasury bond fund to the FXE €uro fund
shows it has crossed up over the 200 day average , signaling as it had done
twice previously , the passage of the TLT price peak and decline concurrent
with FED easing.
If nothing else regression to the mean and characteristic volatility should close
that gap once more.

I'm looking now at buying TLT - PUT Options for November $ 115 strike price

The market’s seasonal and four-year presidential election cycles have held up
pretty well over time , after a rocky summer , a pre-election rally could carry
over through the winter as it has done since last year to date. As most fund
managers I am playing this with skepticism , having just been wipsawed and
burned. A big correction or even the end of the cyclical bull market that began
in March 2009 is sure to follow by summer next year , as we newly expect
every year , sigh.


[Edited on 14-9-2012 by franklyn]

franklyn - 16-9-2012 at 06:18

It's a record

The latest FED policy is already reflected by market prices , which explains why
the effectiveness of each successive operation is shorter each time. Don't buy into
the apprehensions of looming high inflation when the FED stands ready to stop it
at will.
MZM - Money Zero Maturity ( unconditionally available for spending on demand )
is now the lowest it has been in years as a result of debt default destroyed credit.
Remember that credit is counted as real money although it only becomes actual
when it is paid off , hence the need for restocking the supply to keep the bubble
from completely deflating at once. Either that or assets have to be revalued up or
both in combination to again normalize the crash skewed economy.

As I had mentioned before here in the last paragraph back in June _
" Contingent on the Federal Open Market Committee ( FOMC ) Meeting next
Wednesday June 20 does not yet announce resuming QE .
It appears however that primary dealers in treasuries are holding ,
which naturally means they expect to sell off at a profit soon.

Note how with all of the money the Fed is flooding into the bond markets ,
instead of interest rates going down, they are reversing to go up signaling
a counter trend rally higher within the context of the major trend lower.

Simply explained , banks bought up what treasury bonds that the FED did not
and now are selling those back to the FED for cash money to prop up share values.
Those of course will be sold back to the gullible just in time for the next steep sell off.
Expect a volatile autumn driven by Europe's cliff hanging drama
and year end rally here as usual since the market is entirely full of itself and detached from reality.

Treasury bond rates will continue to climb till then but turn down to test this year's
low sometime in the next year , of that I am perfectly confident. The €uro should
soon be up around $ 1.35 again , it is now over $ 1.31.


Projections for a growth driven economy ( it ain't going to happen )

excerpted from here _

Over the next decade, two things are going to change. The first is increasingly
recognized, that Chinese growth rates will drop sharply. The second is that China
will rebalance its economic growth away from its appetite for commodities.

The consensus on expected economic growth among Chinese and foreign
economists living in China has already declined sharply in the past few years.
From 8-10% just two years ago, the consensus for average growth rates in
China over the next decade has dropped to 5-7%. But the historical precedents
suggest we should be wary even of these lower estimates. Throughout the last
100 years countries that have enjoyed investment-driven growth miracles have
always had much more difficult adjustments than even the greatest skeptics
had predicted.

After all, there were many Brazilians in the late 1970s who worried that Brazil's
growth miracle was unsustainable and would end badly, but none expected
negative growth for a decade, which is what happened during the terrible Lost
Decade of the 1980s. Towards the end of the 1980s, to take another example, a
few brave skeptics proclaimed that the Japanese miracle was dead and predicted
that for the next five or ten years average Japanese growth rates would slow to
3 or 4% (in 1994 the IMF belatedly proclaimed that Japan's long-term growth rate
had dropped to 4%), but no one, even the most skeptical, predicted twenty years
of growth below 1 percent. Finally when the USSR's economy was hurtling forward
in the 1950s and 1960s, and expected to overtake the US within a few decades,
even the most die-hard anti-communists did not expect the virtual collapse of the
economy in the 1970s and 1980s.

Similarly, the current consensus for Chinese growth over the next decade is
almost certainly too high. Even if Beijing is able to keep household income growing
at the same pace it has grown during the past decade, when Chinese and global
conditions were as good as they ever could be, it will prove almost impossible for
the economy to rebalance at average GDP growth rates over the next decade of
much above 3 percent.

Rebalancing means, by definition, that for the next few years consumption growth
must outpace GDP growth, and so also by definition investment growth must be
less than GDP growth. Even if China is able to achieve 5-7% growth rates over the
next decade, which I think is almost impossible, this implies that consumption
growth will rise to 7-10% annually, and so from 25% growth in the last few years
Beijing will be able to allow investment to grow no more than 2-4% annually, and
much less if GDP growth rates are as low as I expect.


American foreign policy in the middle east.

What's our oil doing under your sand boy ! ?
You best give it here and get it out from there ,
you hear me boy.

The reason while a bit removed from the
common dialog is that after the U.S. gave
up on the gold standard for it's currency ,
another commodity was needed as backing ,
petroleum being the principle article of world
commerce suited the purpose , and so was
born the petrodollar.

<iframe sandbox width="420" height="315" src="" frameborder="0" allowfullscreen></iframe>

" For the past 30 years the US Federal Reserve has printed hundreds of billions of
oil-backed petrodollars, which US consumers provide to other nations by purchasing
imported goods. Then those nations use these dollars to purchase oil/energy from
OPEC producers. These billions of surplus petrodollars are recycled from OPEC and
invested back into the US via Treasury bills or other dollar-denominated assets,
such as US stocks, bonds, and real estate."

- A new world order - no not that one.

" China and Russia are talking about reducing their US currency reserves and favoring
the euro. At a recent Economic Forum in Davos, Switzerland the Chinese indicated
they are seeking a “more manageable reference” for their enormous currency
reserves. Russia currently exports 81% of its oil to the EU and 65% of its trade is
in the Eurozone. In 2003, Putin told the German press that he would “not rule out”
invoicing crude oil in the euro. “That would be interesting for our European partners,”
Putin slyly added. Interesting ? Try apocalyptic or a broadside attack against the US
dollar! The largest currency exchange reserves in the world are now held by China
($1.3 trillion), Japan ($914 billion), the EU ($440 billion), and Russia ($411 billion –
called petrorubles in 2007). Who owns what =>
At least 70% of these reserves are in the US dollar, or eurodollars. Add to this fact
the largest oil companies in the world are now lining up against the US. According
to the Financial Times (3/1//07) the new “Seven Oil Sisters” are Aramco (Saudi
Arabia), Gazprom (Russia), CNPC (China), NIOC (Iran), PDVSA (Venezuela),
Petrobras (Brazil), and Petronas (Mal-aysia).

The effect of an OPEC switch to the euro would be that oil-consuming nations would
have to flush dollars out of their (central bank) reserve funds and replace these with
euros. The dollar would crash anywhere from 20-40% in value and the consequences
would be those one could expect from any currency collapse and massive inflation
(think Argentina currency crisis, for example). You’d have foreign funds stream out of
the US stock markets and dollar-denominated assets, there’d surely be a run on the
banks much like the 1930s, the current account deficit would become unserviceable,
the budget deficit would go into default, and so on." ( It could ruin your whole day )

The entire article here _

So how serious is this ? Bill Gross of Pimco has proposed just recently
to sell U.S. treasury issues and buy Italian bonds instead ! - O . M . G


and from this site here _
somewhat like zerohedge.

That whole article here _


And just to make things interesting


[Edited on 17-9-2012 by franklyn]

franklyn - 17-9-2012 at 10:31

To late to add this to that last entry above

President of Iran Ahmadinejad is on record as saying that he favors transparency
in the Iranian oil market. As anyone familiar with the City of London and Wall Street
will know, transparency is the enemy of dark pools and private profit. It is this factor
that militates against developing the oil bourse project. Far more importantly is the
propensity for relegating the dollar exchange rate to free market forces entirely out
of the control of U.S. policy and financial circles. 95 per cent of the world’s official
monetary reserves are held in only three currencies: the Dollar, the Euro and the
Pound. Oil traded between Iran and China will be settled in gold, Yuan, and Arial. With
the Europeans out of the mix, in short order none of Iran's 2.4 million barrels of oil
a day will be traded in petrodollars. It seems the real reason tensions are mounting
in the Persian Gulf is because the United States is desperate to cease the movement
away from petrodollars. The shift is being spearheaded by Iran and backed by India,
China, and Russia. Undoubtedly this is enough to make Washington anxious enough
to seek out a pretext to topple the regime in Iran. Remember that Iraq had previously
boycotted the dollar for trading it's oil , this was met by unfounded accusations that
Iraq had weapons of mass destruction , which we now know never existed. In the
same way claims of the intention of Iran to go nuclear are spun into jingoist war rhetoric.

A summary of the threat to dollar as reserve currency

The end of the petroleum market as we know it.
Interesting turn of events - a competitive market will end the artificial pricing monopoly
Who will hold onto or buy a Treasury bond paying 3% interest when the American
inflation rate has reached 15 %, 20 %, 25 % ? The smart money will , knowing full
well that the big reset will mean a reprise of the treasury bond appreciation of the
last 30 years.
That is permanently priced in unlike gold which is subject to price speculation
up and then down as it had been over those same past 30 years.
$ 2,000 oz of gold => old dollar is revalued @ 10 for 1 new dollar =>
your gold is now worth $ 200 an oz ( new dollars ) and so is everything else
of that price , there is no " inflation " profit or net gain.
Those who want to go back to the gold standard ,
be carful what you wish for.

All that is still in the future though.
Who knows , perhaps uranium will spawn the Uradollar
nuclear non-proliferation = nuclear monopoly.


[Edited on 17-9-2012 by franklyn]

franklyn - 20-9-2012 at 07:45

J E E Z , when are they going to stop feeding these meth addicts.
What is really going on, replacing defaulted commercial loans with sovereign debt.
explained here =>
" The banks borrow from the ECB, they buy the debt of their country, they submit
the sovereign debt as collateral at the ECB or to Target2 for more funding and they
receive the cash back on their balance sheets. Utilizing this circle of borrowing,
buying debt, use of it as collateral and then receiving their money back they have
replicated Eurobonds and have just employed a different strategy to accomplish it.


In the last few days since the announced QE3 last Thursday treasury rates have
declined from their initial jolt up , down to 2.9 % from 3.1 % a week ago for the
30 year bond. The TLT increases every opening higher than the previous close
drooping during the day then leveling out , closing higher than the previous close.
I bought an October Call just out of the money on Tuesday correctly anticipating
this move , however although the price of the fund has risen 2 dollars with lowering
volatility I have yet to realize a meaningful profit. It's options expiration tomorrow ,
we'll see. On the top chart below is the TLT fund price , underneath is the 30 year rate.


FED owned Treasury bonds.jpg - 45kBTLT vs 30 yr Bond rate.gif - 14kB

497 - 25-9-2012 at 18:58

Petrodollars= the single most compelling explanation for all the promising alternative energy solutions never amounting to much.

Petrodollars= by far the most logical motivation for the various wars waged in the middle east.

Things really make way more sense from the petrodollar lens! I wonder why it hasn't come up in this thread sooner? Is this this one of most important parts of this thread, or am I missing something?

The solution for the US? Plunge the world into (further) war before it has a chance to coordinate against the petrodollar? Divide and conquer while it still can? Does any one see other likely options?

anotheronebitesthedust - 26-9-2012 at 10:44

In 2000 Iraq dropped the US dollar and began selling their oil for Euros.,9171,998512,00.h...

It wasn't long before US invaded Iraq and immediately switched oil sales back to US dollars.

Libya did the same and even began an African Monetary Fund to compete with the IMF.

It didn't take long for Libya to fall.

In 2009 Iran dropped the US dollar.

And so now...

[Edited on 26-9-2012 by anotheronebitesthedust]

franklyn - 26-9-2012 at 11:39

The treasury market has acted a bit squirrelly the past 2 weeks with interest
rates dropping lower again. I would still look to short the TLT now that it pops
up a bit amid the current unease over Europe. I'm eyeing December PUTs.

I commented on concern of the stability of Spanish government , lower here _
In the news ,

The new bull market , same as the old bull market _
All is not well , as if it mattered.

" There are two types of people in the world my friend, those with the loaded guns, and those who dig. You dig "
- Clint Eastwood - in " The Good, The Bad and The Ugly " as " Blondie " speaking to " Tuco " ( Eli Wallach ) near the end.
" Hey ma ! I made it , top of the world "
- James Cagney - in " White Heat ", just as he blows up at the very end.
" We know now we can't beat their machines, we've got to beat THEM..."
- Barry Sullivan - as Dr. Clayton Forrester in " The War of the Worlds ".


[Edited on 27-9-2012 by franklyn]

DerAlte - 26-9-2012 at 22:18

It isn’t worth reading most of these, just read the headline. Added to the shell game going on in Europe, spurious optimism seems to have temporarily arisen recently over verbal claptrap from Draghi and Merkel attempting to sweep the accumulating pile of nonsense under the rug. However,

Just When Investors Thought Europe Was Fixed...
(Question: what investors?)

Violent Protests Hit Greece and Spain :

What's Behind Spain's Woes

…. Same old BS.

But it’s worth taking note of: Greece Is Better Investment Than China This Year.

An extreme view, perhaps, but one has the vague suspicion that more that an inkling of truth lies behind this one. Emphasis added is mine
China's a 'Roach Motel'; Don't Trust the Numbers: Chanos

China's economy continues to deteriorate despite the government's efforts to paper over the troubles, making the country's stocks ripe for short-selling, hedge fund titan Jim Chanos told CNBC.

In fact, he warned that investors should not trust the data coming out of the government as well as corporations in the world's second-largest economy, charging that he "would take issue with almost any corporate accounting in China."

"It's destined to suck Western capital into the country and have it never go out," Chanos said during a "Squawk Box" interview. "You're almost in a classic emerging market roach motel, except it's a really big one in that it's very difficult to earn adequate returns for capital and get your capital back as a Western investor."

"China's growth is slowing pretty quickly. That's stated GDP — you're never going to see negative GDP from China year-over-year, I don't think, not under this regime," he said. "But look at corporate profits, look what's happening on the ground. Corporate profits are imploding over there."

Chanos said his "roach motel" remark was directed specifically at the country's "H shares" market — companies based in the mainland but whose shares also trade on the Hong Kong exchange.

"Take a look at the Chinese stock market. It's gone nowhere despite having one of the highest rates of growth of any emerging market, any market," he said. "GDP growth has been 9, 10 percent for 10 years and you've made no money in the Chinese stock market."

The malaise is global. One cannot blame the youth for demonstrating in Greece and Spain, nor for the protests of the Occupiers or Tea Party here in the US, any more than young Arabs for wanting the end of despotism in their countries.

Brought up in an atmosphere of debt driven opulence, in welfare states where personal responsibility is not the PC way, they have not known the bad old days. Welfare is like a drug; proper use in society can be very beneficial but too much produces addiction and reliance. Like drugs, it also costs a lot of money. Only a few countries can afford to manage it successfully, such as the Scandinavian countries, Finland and Germany. It is not sustainable in others.

Der Alte

DerAlte - 26-9-2012 at 22:33


Bill Nye, "The Science Guy" suggested one of the reasons why the US schools lag so badly in mathematics and science: Quote:

"The Earth is not 6,000 or 10,000 years old," Nye said in an interview with The Associated Press, citing scientists' estimates that it is about 4.5 billion years old. "It's not. And if that conflicts with your beliefs, I strongly feel you should question your beliefs."
Millions of Americans do hold those beliefs, according to a June Gallup poll that found 46 percent of Americans believe God created humans in their present form about 10,000 years ago.

"If we raise a generation of students who don't believe in the process of science, who think everything that we've come to know about nature and the universe can be dismissed by a few sentences translated into English from some ancient text, you're not going to continue to innovate," Nye said in a wide-ranging telephone interview.

Ken Ham, a co-founder of Answers in Genesis, said dating methods used by scientists to measure the age of the earth are contradictory and many don't point to millions or billions of years of time.

"We say the only dating method that is absolute is the Word of God," Ham said. "Time is the crucial factor for Bill Nye. Without the time of millions of years, you can't postulate evolution change."

The US seems to be in a neo-neolithic age. 25th in mathematics, 17th in science, and 14th in reading, according to

Another reason is that poor children, through no fault of their own, carry their parents' and siblings' ghetto outlook into school. If parents do not care a rat's ass, then why should children? Older siblings seem to do well enough - as minor drug peddlers on the corner or as petty crinimals, and sister can always sell herself on the main drag. Peer pressure will force them into a gang, perhaps, sooner or later. This is a self perpetuating social problem.

A third factor, like it or not, is that intelligence, like everything else, is roughly Gaussian distributed. Today's PC education is a foolish one-size-fits-all piece of nonsense crafted by liberal idealists and educational 'theorists' - and to fit all, the lowest common denominator always prevails. You cannot teach a near mentally deficient child in the same class with the same material as a bright child. Both suffer. Levelling is essential. Elitism? No, survival and common sense.

In the US it seems that physics is hardly taught at all in high schools except possibly at AP level and mathematical standards are very low too. I can state this with fair certitude because I have watched three children progress through the public school. I can compare their progress and schedules with my own, some sixty years ago, in a private school in England. There Mechanics (dynamics and statics) was taught starting at ages 14-15 as Applied Mathematics, coincident with calculus which is an absolute necessity for any science. Geometry, elementary algebra and trigonometry had already been completed by then. Now admittedly that was in one of England’s top schools. But younger brothers taught in public schools (grammar schools) did somewhat similarly.

My 3 children, 16 years apart youngest to eldest, all went to US public schools. I was fairly well pleased at #1 son’s progress(1971 – 84). They had levelling then. In high school, I thought his math and science a bit lacking but he was AP standard and got a scholarship to university. He is an MS leading a group in advanced digital test equipment.

The daughter, 4 years younger, went to the same schools (1975 - 88). She got nearly all A's and rarely a B. (She knew how to work the system - how to get grade points above 4.0!) Things had changed, but not too seriously. In high school she claimed she got serously bored. She obtained a scholarship (several, I believe! she knew how to use the system, as I said), went to university, got her BA and later an MA. She home schools her children (guess why?) .

My wife volunteered in the schools from 1976 to 2000, in grades 1-5, helping with reading, writing and arithmetic. She never noticed any decrease in the intelligence of children over that time. She did notice the effect of ethnic background on the incoming general knowledge, but no unwillingness or ability to learn. Of course, children from any background show a range of intelligence. With time the ethnic balance radically changed. Levelling was abolished as not PC. Language problems complicated and slowed the education process. Standards dropped like a lead balloon. Asian students always seemed the best even when saddled with language problems.

With #2 son I ignored my wife's plea to send him to a private school, citing his elder siblings’ performances. Again he attended the same schools. Although his early years did not show any real problems that I could detect (my wife, wiser in such matters, did), his performance dropped off radically around the age of 13 (c. 1996). This persisted throughout high school but he managed to get a scholarship. He decided to ‘prepare’ himself for university by attending a community college. He also decided to avoid the 'mistake' of taking too many classes and leisurely blundered his way to an AA degree.
He did attend the university but dropped out due too poor grades and financial problems. From an early interest in computers he acquired a good competence at sundry IT jobs. He is now a member of a small IT group at a large Texas company. He would be doing well financially but for being saddled with debt for the same reasons many so-called middle class Americans are.

The US needs to look to Asia to revamp its educational system. There it will find an echo of the traditional system as it was once here – one that worked. Ability (for whatever reason, be it innate itelligence, natural talent or just plain hard work) leads to promotion. Stasis or mediocrity will keep you at the same level. Idleness, lack of discipline, and innate poor mental ability, sadly, will cause you to descend down the ladder. No amount of PC claptrap or educational theory can overcome natural laws.

Der Alte

497 - 27-9-2012 at 00:23

A chart to watch in the coming months:

Very interesting stuff.

Maybe its just a question of whether we're circling the drain or the "InSinkErater."

franklyn - 28-9-2012 at 08:38

Below is part of an essay from here, liberally abridged by me.

Europe is becoming quite strange. The World is becoming quite strange.
A politician gets up and speaks and says nothing, no one listens to what
he said, then he is roundly congratulated for his bold words that were
heard by no one and then everyone disagrees with what they think he
might have said. The Continent seems to be in a dream-state where the
worse it gets; the better it is because bad news is good news, the ECB
will be drawn in and provide liquidity and redemption for ever-after.
Any day, the ECB will buy all of the sovereign debt of Europe and declare
each nation “debt free and without risk.” It will be a gigantic do-over
when the ECB will be re-capitalized by extraterrestrial aliens that we have
not yet met currently residing at area 51.
Because we cannot invest money off-world we are stuck within the
boundaries of what is available and something must be done with the
paper printed by all of the Central Banks but it is getting increasingly
difficult to make much sense of it.

The last line of my post before this one
- Gene Barry - as Dr. Clayton Forrester in " The War of the Worlds ".

[Edited on 29-9-2012 by franklyn]

DerAlte - 28-9-2012 at 09:06

Read the article below and if you have the time watch the video: this one is worth your effort and is well on the topic of this thread. Intelligent philiosophical discussion.

Did Flaws in the Democratic System Cause the Financial Crisis?

My own opinion is that the crisis was caused by a tripartite failure, shared equally by the public, the politicians and the financial systems in place, the banks and Wall Street. The public, after all, decides its particular flavor of democracy and elects politicians to taste. If it elects those having a fundamental fiscal recklessness, that is the choice. Further, the public (or a large percentage of the so-called middle class) chose plastic debt as a way of life. Irresponsible banks encouraged this; million dollar mortgages were offered to unsuspecting janitors;Wall Street papered over the cracks in this faulty paradigm with derivatives that allowed this debt to be carefully hidden out of the light of day. Yet the crisis was visible in plain sight for those with vision. I really come from a generation before the Boomers. Pre-welfare, when everbody who could saved instead of incurring debt.

Have you gotten you new Iphone5 yet? Support your local Apple store...

France Targets Deficit Cut With Tax-Hiking Budget

Good luck with stale old Socialist methods, Monsieur Hollande. They never worked and they never will.

From Franklyn's post, supra:
...something must be done with the paper printed by all of the Central Banks

Use as toilet paper? To light one's pipe?

Der Alte

AndersHoveland - 28-9-2012 at 15:42

Quote: Originally posted by DerAlte  
Another reason is that poor children, through no fault of their own, carry their parents' and siblings' ghetto outlook into school

Don't forget that genetics plays a role also. The correlation between lower incomes and poorer school performance could have more to do with lower intelligence (personal motivation and ability to concentrate are also genetic to some degree).

Here is an interesting article about how genetics could influence career choice:

There was also the Minnesota Transracial Adoption Study, which examined children from different races adopted at birth into white middle class homes.

Korean and Vietnamese babies from poor backgrounds, many of whom were malnourished, were adopted by White American and Belgian families. When they grew up, they excelled in school. The IQs of the adopted Oriental children were 10 or more points higher than the national average for the country they grew up in. Trans-racial adoption does not appear to either increase or decrease performance on IQ tests. "The three-way pattern of race differences in IQ remains.”

[Edited on 28-9-2012 by AndersHoveland]

DerAlte - 2-10-2012 at 12:04

Taking a macro view

Since I was born in the days prior to WWII, the world population has risen from about 2.3 billion (109) to around 7-8 billion (See for want of a better reference). Of this the US represents a mere 4.5% and a decreasing fraction, but it seems to most of the rest of the world to be bent on World Hegemony (to use a Chinese phrase once continually used by Radio China, which I used to listen to on shortwave, in my youth; Radio Moscow, too).

This country maintains military bases in ~100 countries 65 years after the end of WWII. It has managed, from a position of economic dominance (now in severe decline) and self-presumed moral rectitude, to alienate many of the world’s largest and smallest nations.

Consider the record of this land after its heroic efforts in WWII. It was drawn into that conflict unwillingly but reacted swiftly after the Japanese provocation. It then helped rebuild a Europe in ruins (Marshall Plan) and established NATO with Western European allies as a bulwark against the perceived threat from the USSR. So far, so good.

Next, with allies, it fought the Korean War to limit the spread of Chinese communism. This was only a partial success; the country was divided in half, like Germany. The southern half thrived and the northern half became a poverty stricken caricature of a long outmoded Communist state, like Stalin’s USSR or Maoist China.

Vietnam was a disaster. I believe (along with much European thought at the time) that the US, reeling from the Mc Carthy nonsense, seeing reds under every bed, severely misjudged the threat of communism for what was merely a struggle aginst colonial dominance by France. Whereas Europeans had aided in Korea, there was a severe reluctance for further Asian adventures and much of the US population did not support it either.The North won what they were after – getting rid of foreign dominance.

This era also saw the virtual dismantling of all European colonies and the transfer of power to native governments, with varying results.

IMO, Vietnam was the start of the misguided political theory of Nation Building. This idea was actually an attempt to persuade foreign nations to reform themselves into the image desired by the US. The buzzwords were: democracy, freedom, etc.; the actuality was riding roughshod over local customs, religions and perceived rights established long before the US existed, and many European states did as well.

Later wars were undertaken under the shadow of the fiasco of Vietnam. The Gulf War (H.W. Bush) was undertaken to prevent the capture of ally Kuwait by Saddam’s Iraq and a general disruption of the now important oil-rich Gulf states area. Diplomatically justified this time, it was a demonstration of the US military power (Shock and Awe) and achieved its end in short order. While hawks brayed for what would have been the destruction of Iraq, the US government wisely left the scene, the honor of its ally Kuwait intact and the ambitions of Saddam thwarted.

The destruction of Iraq was left to G.W. Bush and his minions on a slender pretext and, it turned out, totally inaccurate assessment of the tyrant’s development of Weapons of Mass Destruction. The ‘strategic withdrawl’ from Iraq left it in ruins, and open to infiltration from Al Quaeda and other elements of Islamic Extremism, a far worse condition than it might have been under Saddam. It created a power vacuum in the area – open for Iran and others to fill. So much for Nation Building – more like national destruction.

But prior to the Iraq fiasco, the first reponse to the Sept 11 atrocity was a a lighning strike against Afghanistan. A replica of Shock and Awe, it cost a few hundred US lives and achieved its purpose initially. But since a pointless war has dragged on for a decade and achieved absolutely nothing. A puppet government is in force there. It will collapse once US/NATO forces leave, if not before. Afghanistan will be what it always was, a poverty stricken country living in Middle Ages or maybe earlier conditions. The US has not succeeded in this latest exercise any more than the British Empire could, or the force of the USSR.

Two trillion dollars wasted in two useless wars, leaving destruction behind. Will the US never learn? What will become of that ridiculous Embassy compound in Baghdad? By far the largest in the world. This actions have resulted in a world view of the US as a Paper Tiger (famous Chinese communist phrase). But if the tiger sleeps, don't tweak his tail...

Is it surprising that the world looks on the US with a very jaundiced eye?

Meanwhile world population rises exponentially, and with it the CO2 level. A tenth of this rise could be attributed to that population merely breathing, to say nothing of the domestic animals used to feed (some) of it. The rest can be attributed to the fuel consumed for heating, cooking, industrial processes, etc. To say nothing of the destruction of nature’s CO2 sinks, the forests. Whether this will cause severe climate disruption or not, the rising level is a warning signal. Man has managed to thwart the natural processes that limit population growth, but not for much longer, I fear. Le Chatelier’s principle is inviolable. The equilibrium is currently badly out of whack. Nature will strike back. Nature abhors an exponential and will temper it with something, usually a larger, but negative, exponent.

There is a similar head in the sand approach to the current global financial crisis. Throw money at the problem and it will budge – it hasn’t.

The following are today’s reading.

Rajoy Comments Spark New Spain Bailout Confusion
… more of the SOS.

Boeing Engineers Reject Four-Year Contract Offer
IMHO as a retired engineer of 40 years experience, any engineer who feels he needs a union isn’t worth employing. He is not a professional but a paid hack.
This one, however, you really ought to read. Mainly it’s just common sense to those who live without believing in the Soma of Political Correctness wafting from right, left (and centre). Wake up before it’s too late, America!
US Is Debt Addict on 'Budgetary Crystal Meth': Gross

Bond investors should try this one; @Franklyn, watch out for the inflexion points when calls become puts!

Why a Spike in US Bond Yields May Be Coming
Congratulations to Apple on another Must-Have product; you will be out of fashion without it! But:
What Every Apple Investor Should Know
.. which points out why AT&T and Verizon (own both) will do well in spite of analist’s (sorry, analyst’s) predictions that their revenues will fall since they would have to provide you with your Iphone5. Sorry bud, you’ll be paying, ultimately; free lunches are a thing of the past.

Finally, I shall be watching the debates tomorrow (or will they be debacles?) So, this one is apposite: one thing the US seems to be discovering is that International Swill is not beer:
Boston Beer Founder on the State of Beer—and Mitt Romney
Der Alte

franklyn - 4-10-2012 at 06:05


watson.fawkes - 4-10-2012 at 06:34

Quote: Originally posted by DerAlte  
This country maintains military bases in ~100 countries 65 years after the end of WWII. It has managed, from a position of economic dominance (now in severe decline) and self-presumed moral rectitude, to alienate many of the world’s largest and smallest nations.
For an excellent exposition on this topic, see Chalmers Johnson's Blowback. The rest of the book, too, is pertinent to the concerns raised.

franklyn - 5-10-2012 at 06:42

Just in , it doesn't even pass the giggle test :)

30 year U.S. treasury rate is back up to 2.95 this morning
I vacillated whether to buy PUTs on Wednesday when
TLT fund was over $ 124 , it's down $ 3 now , and
the $ 119 December I was considering is up over 40 %
oh well.


Capitalism in action :
Although worldwide demand for solar panels and wind turbines has grown rapidly
over the last five years , China’s manufacturing capacity has soared even faster ,
creating enormous oversupply and a ferocious price war. GTM Research , a
renewable energy consulting firm in Boston , estimates that Chinese companies
have the ability to manufacture 50 gigawatts of solar panels this year ( China by
itself represents more than 2/3 's of the world’s capacity ). While the Chinese
domestic market is able to absorb 4 to 5 gigawatts , exports will only take
another 18 or 19 gigawatts. The enormously expensive equipment in solar panel
factories needs to be run around the clock, seven days a week , to cover costs.
China’s biggest solar panel makers are suffering losses of up to $1 for every $3
of sales this year, as panel prices have fallen by 3/4 since 2008. The result is a
looming financial disaster.

From here _


[Edited on 5-10-2012 by franklyn]

Ego_and_his_own - 5-10-2012 at 23:01

You are forgetting that US has limited and imposed barrier for import of Solar panels from China i think at beginning of this year, to "protect" domestic manufacturers thus keeping prices high.

So much about "free market".

But I see China strong presence all around the world. South America, India, Europe, Africa.... They are expanding their markets rapidly.

DerAlte - 8-10-2012 at 11:08

Regardless of the political situation, the economic outlook, Euro worries, unemployment numbers, etc., the US Equity market had a banner year since last Sept. If you did not participate, you missed out. Dow up 22%; S&P up 25.8% and NASDAQ 25%.
But 3rd quarter GDP anemic at c 1.9%, earnings expected lower:
Worst US Quarterly Earnings Since 2009. Financial Times:

Also FT : Favorable Tax Draws Companies to Britain

Last weekend at a party I spoke to a lady of Greek origin who spends four months a year in Greece. She said from her experience that things were very bad there, the worst she had ever seen. She described it as a monument to failed socialist ideas and welfarism.

And if Merkel were to carry out this suggestion, she had better take her own bodyguard – the current mood is very ugly there :
Merkel Should Bury Euro During Greece Visit: Economist &

I rather liked this one, too: Middle Class — Whatever It Is — Targeted by Candidates

What indeed is this middle class here in US? I have been here 48 years and I know exactly what a blue collar worker and a white collar mean, but the exact meaning of the ‘middle class’ here is completely nebulous to me. Back in the land of my birth (UK) it had a pretty concrete meaning and it did not have that much to do with money. It was an attitude. Nor really did it have that much to do with education – you did not have to go to ‘college’ to qualify, or to private school etc. You did have to speak intelligible English in a suitable accent, but it was not reserved for any particular section of the country. Grammatical correctness was one of the necessary qualifications. Say ‘I ain’t got no...’ and you disqualified yourself – unless you were a famous Rock star. An Edinburgh Scots or a precise Northern accent was no bar, but Scouse or Geordie or Brum was.

I’d be interested to hear from UK members what they consider the term means in today’s Britain. In the US the politicians seem to think strictly in money terms and each has a different sliding window, assumedly on the central 50% of income. The entire campaign has been about this ‘middle class’. What happened to the ‘poor’ this time? Haven’t even heard about the homeless, guess thay don’t vote, yet I still see them. That’s democracy today. “Representative democracy”.

Yet, in the above article, quote:
Still, experts say the term middle class has a cultural connotation that goes beyond the number on your paycheck or tax stub.

Kevin Leicht, director of the Iowa Social Science Research Center at the University of Iowa, said many Americans think of a middle-class life as being one in which you have a stable job, own your own home and occasionally buy something substantial like a new car. You also either went to college or have the aspiration of sending your children to college.
Beyond that, he said, the term middle class invokes the type of person who gets married and has kids, pays their bills on time, doesn’t get in trouble with the law and maybe goes to church.

“In the United States, it’s probably more of a cultural category than an economic one,” he said.

…. Which has the same connotation I have always had. But since when has any job been ‘stable’? Not on my watch, never in the defense industry.

Der Alte

franklyn - 9-10-2012 at 20:21

Bretton Woods is a resort in the mountains of New Hampshire that was made
famous by a series of meetings of world leaders and economists in 1944. Nine
months before the last of the V-2 rockets struck Britain , 730 delegates from
the 44 Allied Nations congregated in Bretton Woods to create a new world order.
Under the Bretton Woods Agreement, the world's currencies would be pegged to
the U.S. dollar and central banks would be able to exchange dollars for gold at a
set price of $ 35 per ounce. It was this arrangement that firmly established the
U.S. dollar as the global reserve currency. By the early 1960's , there was wide
spread recognition that the U.S. could never fulfill its commitment to redeem all
outstanding dollars for gold. The issuance of new dollars and gold for dollar
redemptions had reduced the U.S. Treasury's gold coverage ratio to 18%.
Despite this disturbing fact , central banks did not call the Fed's bluff by selling
their dollar reserves. They had become hostage to the system. By the end of
that decade , the problem had intensified to the point that if any central bank
attempted to convert its dollars to gold, its domestic currency would rapidly
appreciate above the levels that were pegged under Bretton Woods , leading
to severe economic slowdowns for any country who challenged the U.S.

[ In 1971 then president Nixon announced that dollars would no longer be
exchangeable for gold , the dollar would hence be bolstered by it's new role
as the sole currency to be used in payment for petroleum , the petrodollar. ]
It was this surplus of dollars held by foreign central banks , and subsequently
invested back into U.S. Treasury securities , that reduced the United States
cost of borrowing and allowed the U.S. to consume and spend wildly beyond
its means as it still does.

The above is excerpted from here _


DerAlte - 10-10-2012 at 10:03

Today's Ephemera
Read this, if nothing else. It presents the salient, inescapable facts of economics that the media ignores and Wall Street flouts.

And also, regarding the other side of the coin:

…That reflects an imbalance between what skills employers are willing to pay for and the level of skills and education that workers are bringing to the market," said Harry Holzer, a contributor to the Russell Sage Foundation's Future of Work program "It seems like employer demand for skills has increased faster than workers that have those skills and education, ... the level of job vacancies is higher than what it normally would be in a bad jobs market, reflecting the difficulty in matching workers with open slots.”

Time and again in conversations with business executives the talk turns to education and the inability of the system to turn out prospective workers with the right technological know-how to adapt to new demands. But blame also rests on workers who are not doing enough to keep themselves properly trained to face new challenges.

"Employees have to adapt," said Geoff Hoffman, chief operating officer at Chicago-based DHR International, a firm that helps companies find executive-level talent. "The newspapers are going away, the video store went away. Individual businesses always have to make sure you're in the best position to adapt and change. Otherwise, you risk becoming irrelevant."

…In its breakdown of the skills-gap quandary, Deloitte recommended a number of steps policy makers need to take if the chasm is to be filled. They focus on improving education, making regulations more employment-friendly for companies, and streamlining immigration policy so that foreigners trained and educated in the U.S. have the ability and incentive to stay here. Also, the firm endorses encouraging foreign investment in the U.S. by dropping overly restrictive barriers; reforming unemployment insurance to remove disincentives to work; and both protecting intellectual property innovation while simultaneously promoting the flow of ideas through the corporate world. "We have truly reached an inflection point," the Deloitte study said. "Individuals, firms and nations can no longer remain complacent about the talent required to succeed; they must constantly strive to refresh their workforce.

"Public policy cannot solve these issues alone. It can, however, have a huge impact in creating a better environment for talent to thrive in this country, and for America to attract the most talented people in the world to its shores."

AS for the market Art Cashin puts it fairly squarely:

@franklyn : I sometimes wonder if anybody actually reads our posts. Are we emitting into a vacuum?

Der Alte

franklyn - 11-10-2012 at 01:06


" Are we emitting into a vacuum ? "


DerAlte - 12-10-2012 at 11:36

A quick primer on the extent of debt in the US and how it has changed: watch and digest; be careful not to get vertigo and nausea. -$16,000,000,000,000 or $50K per capita.
Spent on your (?) behalf on foreign wars, ‘green energy’, pork and bridges to nowhere, etc., – and one of the most disgusting presidential campaigns I have had the misfortune to endure.

In the same vein on a more global view from the man #2 only to Bill Gross:
Central Banks Can't Inflate Market Prices Forever: El-Erian

Every Sept I revamp my portfolio. This last YTY riding equities was AOK. I am now reducing both cash and equities and and going all out for income, keeping just a tad above junk bonds. Mainly high yielding preference shares, some foreign bonds and an income fund or two. May change my view after the election.

Last night’s VP debate was a bummer. They traded too many heavily suspect facts on both sides. Low on rhetoric, high on BS.

Have a good weekend,

Der Alte

497 - 16-10-2012 at 01:10

I don't even know what to think about this...

franklyn - 17-10-2012 at 12:14

@ DerAlte

- Watch the small video on this page -

Go here to download the paper _
Institutional Investors & Stock Market Volatility

It provides useful prognostications such as this _ :D
A single-session drop of at least 20%, for example, is predicted — over long
periods — to occur once every 104 years, on average, but it could happen at
any time. That’s why you always have to prepare for it, because you don’t know
when it will occur.
- and
The National Bureau of Statistics never tells you that a recession has started
until it's over.

Anyway their thesis in part is that very large institutional investors trigger market
selloff. My take is that is the reason we have dark pools , so the big boys can
sell out before the real fun starts.


[Edited on 18-10-2012 by franklyn]

anotheronebitesthedust - 17-10-2012 at 15:02

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macbluff619 - 18-10-2012 at 01:41

I definitely agree that the rich/powerful control governments but I don't believe they gave us our freedoms to trick us into thinking we are free. Every freedom or right we have was gained through struggle. The rights we have were given because the people in power had no choice. Child-labor laws were won in battle. People had to fight for decent wages. The reason our freedoms and rights are constantly being taken now is, people are complacent. And they are complacent because, for a long time, we have been somewhat free. Most people think it will always be this way because they don't remember how it use to be. Democracy is a good idea. It's capitalism that sucks.

My two cents.

hissingnoise - 20-10-2012 at 04:37

What we got here is . . . failure to communicate!

franklyn - 20-10-2012 at 15:12

@ hissingnoise

" taking it off boss "

Read lower half of this post _


DerAlte - 21-10-2012 at 22:12

@hisser & franklyn,

It is not the failure of syntax and semantics that plagues Mr. Danny Crawford (alias Moustaffa Krap). Rather it is the mental fog caused by certain aspects of religion. Brains liberally washed by ancient sayings and writings accepted as truth, have neither cognition nor any sense of reality.
Re last Tuesday’s Presidental Debate: Obama, nil; Romney, nil. Boredom 2… I was reminded of Mark Twain’s quote “There are three kinds of lies: lies, damned lies, and statistics.”
And his other, slightly modified: “ Suppose you were an idiot. And suppose you were a politician . But I repeat myself.”

Der Alte

Vogelzang - 22-10-2012 at 01:33

DerAlte - 24-10-2012 at 09:53

It is very difficult to restrain from political comment at this critical time in the nation’s history, so although I may be breaking rules a shade, I have to refer you to the following:

This type of antediluvian thinking of many evangelists on the right beggars the imagination and is one reason I am unable to consider voting for any such politician. From the Constitutional separation of church and state, religion should have no part in US politics. A man’s religion is his own and he is entitled to it, but a statement of this nature labels him as a fool and unfit for office.

The laws of all nations, since time immemorial, have regarded rape as a crime, as evil. A god that condones evil in any form, a god you must fear, instigator of earthquakes, tornadoes for the’good’ of mankind or for his own secret purposes never knowable to mankind, is perhaps the god of the apeman swinging bare-assed through the trees, but not of the thinking man of the 21st century.

I can compare this fundamentalist attitude to the zeal of the benighted Taliban attempting to kill that young Pakistani girl; that disgusted even moderate Muslims.

Epicurus and later Lucretius held the agnostic view that god(s) may exist but we have no evidence that they make one whit of difference to either man’s actions nor his fate. That was over 2000 years ago. About time makind caught up with this view, IMHO. Keep your religion out of politics.

I find Romney’s Mormonism strange to understand but in an intelligent man but I can accept a few encentricities inculcated in early childhood . Likewise Obama has managed to avoid the obligatory infusion of religion into the debates and his campaign.
This guarded optimism from two captains of industry is refreshing:
'Get It Done,' Immelt Tells DC on Fiscal Cliff Fix

There’s a whole heap of Buffet comments on this page :

Der Alte

franklyn - 26-10-2012 at 11:55

The mean value of the Nasdaq ( 2009 low 340 ) + this year's high 860 ,
divided by 2 is 600 , the exact low value last October , a 25 % drop from
where we now are. Are we in for a reprise of last fall. Note the double dip
before the October low last year. Are we there now. You'll note also the
200 day moving average was touched first before then also. (Red circles)


Manufacturing orders which have been dropping all year , exactly mirror
stock values , dropping in step from the peak in the 2000 dot com bubble
and then again in the 2008 Real estate crash. Any guesses where we
might be in 2013.


Regardless who wins the presidency I expect the characteristic year end
rally with Treasury bonds cheapening and I will buy Calls then for mid 2013
expiration. Meantime I'm still eyeing Puts if bonds jerk up again for a bit. ( select 6m view below )


Mother nature says Happy Halloween

It's not often that a storm changes the landscape


[Edited on 27-10-2012 by franklyn]

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Rosco Bodine - 1-11-2012 at 13:02

This video is food for thought worth consideration on its merits
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triplepoint - 1-11-2012 at 13:30

So, rosco, I sense a vote for freedom coming on. Do you live in a state where your vote matters? Unfortunately, my state (NJ) will vote the lemming line regardless of any logic or evidence.

Rosco Bodine - 1-11-2012 at 17:55

Yes I live in a state that wants to check government with sane fiscal limits instead of sending it a check and telling it to run all our lives as it pleases since it must know what's best for all of us. There is plenty of good reason to believe it is the nanny state that needs adult supervision and not the other way around. Government has gotten way out of hand and become an unruly servant, an ambitious master who can't even do basic arithmetic, and liberty and prosperity for most people has suffered. It would seem even the most hardcore socialists would understand that is the reality but they have put on blinders or just don't care. The energy cost is central and really I don't think it has gotten the prioritizing it deserves by either party, but clearly one party does understand that definitive aspect better than the other. The restrictor plate needs to be removed from the energy industry because that industry is literally what fuels the economy. Getting back to cheap abundant fuel and electricity is an absolute requirement and understanding that reality will be the 'genetic marker" for the economic survivors in the times of tribulation that are to come for having too long pursued a counterintuitive strategy. The breeder reactor technology has to be advanced along with everything else in energy technology but the money has to be spent wisely not thrown away on what doesn't produce a guaranteed and reliable return. To make that happen a bona fide businessman needs to be chief executive, for practical reasons that is just the bottom line. So we have a business competency choice to make not a social political ideology choice.

[Edited on 2-11-2012 by Rosco Bodine]

Pok - 1-11-2012 at 19:25

Quote: Originally posted by Rosco Bodine  
Getting back to cheap abundant fuel and electricity is an absolute requirement and understanding that reality will be the 'genetic marker" for the economic survivors in the times of tribulation that are to come for having too long pursued a counterintuitive strategy.

People should better think about how to save energy rather than increasing the consumption. What do you see in the future?
Endless growth doesn't work in a world with limited resources. That's why the picture below is not correct. The Republicans are not really good in math.

Quote: Originally posted by Rosco Bodine  
Regarding fiscal realism and the need for government operating budgets .....

Rosco Bodine - 1-11-2012 at 21:00

There simply is no factual basis for your assertion regarding conservation of energy. What I see in the future if alarmists and fanatics have their way is global catastrophe which has nothing to do with climate change. Engineering a Malthusian catastrophe and economic disaster is NOT the intelligent counter-measure for its avoidance and that is no theory. But that counter-intuitive proposition is the theory which is advanced by the "conservationists" and social utopianists who have bracketed themselves and wrapped themselves in "green movement" and "social justice" propaganda that is their brand label which sells to "visionary" ideologues who are NOT practical men and who are NOT businessmen and NOT economists and I would submit are NOT scientists either. They are lying politicians and propagandists who have misled too many people down a primrose path of change for the worse. Do the math. I have.

franklyn - 2-11-2012 at 09:36

What has until recently been , the " underdeveloped " world , is developing
at a rapid rate. Per capita wealth of the part of the world population which is
many times larger than the that of the developed western world , threatens
to relegate western dominion of the world economy to it's regional sphere.
The bickering of our national parties is the same as it is over in Europe , who
is going to have the shitty end of the stick. That's the sticking point , since in
the U.S. at least since Franklin Roosevelt the tradition of bettering the plight
of the disadvantaged is in striking contrast to that other democracy India
where the well to do don't even need to step over those who literally live on
the sidewalk because they ride in airconditioned chauffer driven late model
cars. The claim of vote for me and I will let you have your rights again is
very suspect.


Following up on this previous post

The European Central Bank is concerned about adoption of Bitcoin & E-money.
This all remains a work in progress , still in a virtual venue.
The writing is on the wall , Viva Zapata !
I can foresee interesting developments as electronic money becomes the
basis of a parallel economy which is not and cannot at present be regulated
except by imposition of sanctions against it. Already in fun loving regions of
the world such as Iran and China , internet access is under surveillance and
restricted. Interfering with a peer to peer network would be another step.
Individuals would be subject to confiscation of their wealth if it cannot be
shown to have been derived in an approved and sanctioned manner. This
is already the case with proceeds derived from illicit commerce such as
drug distribution and attendant money laundering.


[Edited on 3-11-2012 by franklyn]

Pok - 2-11-2012 at 23:11

Quote: Originally posted by Rosco Bodine  
There simply is no factual basis for your assertion regarding conservation of energy.

Limited resources are not a factual basis?

ideologues who are NOT practical men and who are NOT businessmen and NOT economists and I would submit are NOT scientists either.

It's the NATURE of a politician to be an ideologue. It doesn't matter to which party he belongs, Democrats AND Republicans are idologues. It's true that only scientists can give good advice. But it has to be a consensus of ALL scientific disciplines, not only economists. Otherwise it would be an incomplete, one-sided und thus wrong way.

Do the math. I have.

I didn't claim that you haven't. But the Republicans have not. I don't see what justifies the picture of a Republican that has a weapon called "math" when you remember this figure:
Debts of the USA.

Is there ANY indication that Republicans can handle their budget better than Democrats? Definitely not. Debts grow and grow - NO MATTER which party is in power!

Well, probably I'm wrong:

This is 2011. Now there has to be 50% instead of 35% under Obama.

So much about math. :P

[Edited on 3-11-2012 by Pok]

schulden.jpg - 31kB

Rosco Bodine - 3-11-2012 at 08:50

Quote: Originally posted by Pok  
Quote: Originally posted by Rosco Bodine  
There simply is no factual basis for your assertion regarding conservation of energy.

Limited resources are not a factual basis?

In context with your assertion regarding management and stewardship of resources that are finite, while still supporting the economy of an industrialized society, it is not the finite quality of fossil fuels or any other finite resource that is the issue. You are attempting to redefine the argument. It is your assertion about the conservation and mangement that is irrational and lacks depth. This has been discussed at length in this forum. There are sensible and practical solutions to supplying all the energy needs of an industrialized society if the energy production is sensibly managed and the carbon footprint overall can be reduced even with increased energy production and usage. Conservation that is penny wise and pound foolish and that is destructive to the economy and destructive to society is not something that is useful or constructive simply because it placates the simplememinded demands of environmentalist fanatics. With regards to the industrialized world, the businessmen (and their engineers) have a business to run and the governments and fanatics need to get the hell out of the way and stay the hell out of the way. Only a moron would not understand that.

ideologues who are NOT practical men and who are NOT businessmen and NOT economists and I would submit are NOT scientists either.

It's the NATURE of a politician to be an ideologue. It doesn't matter to which party he belongs, Democrats AND Republicans are idologues. It's true that only scientists can give good advice. But it has to be a consensus of ALL scientific disciplines, not only economists. Otherwise it would be an incomplete, one-sided und thus wrong way.

It certainly does matter which ideology is in play for a political party when one party is overtly pursuing a SUBVERSIVE agenda which is destructive to the republic and to the economy in ways that are unprecedented and that has been occurring. The level of corruption and lying that has been advanced is astonishing. A government operating without a congressionally approved budget is not a legitimate government IMO because it violates the taxation without representation prohibition which was one of the basic issues that was cause for the American Revolution as a non negotiable DEMAND of the people. No budget - no legitimate government. It really is that simple. I see below you have provided a falsified accounting straight from the "dear leaders" propaganda ministry. Your last column figures are about as credible as the past six weeks of media disinformation and propaganda about the Benghazi embassy terrorist attack ......all of it LIES, damn lies, and more lies.
There is more than just executive incompetence in play behind the scenes of that and other national security and other security related matters. There is revealed in such matters a clear inference of unlawful collusion with foreign powers which is contrary to the interests and represents a threat to the security of the United States. That is even beyond dereliction of duty and fully into the realm of treason.
How's that for "ideology".

Do the math. I have.

I didn't claim that you haven't.

You are about to do that now and show bogus figures to try to make the argument. Clinton set up the subprime mortgage crisis which eclipses and skews the figures describing the ACTUAL "fiscal performance" of the Clinton administration. Adjusted to conform to REALITY your chart below would look very different. And since there has been NO OPERATING BUDGET for the United States government during the ENTIRE four years of the lawless Obama administration there is ZERO credibility or veracity about ANY figures which are published. There is no reason to believe anything that comes out of the mouth of Barry Soetoro or Hussein Benghazi Obama or whatever else anyone may want to call that Chicago Tiger Woods on the Potomac.

But the Republicans have not. I don't see what justifies the picture of a Republican that has a weapon called "math" when you remember this figure:

Debts of the USA.

Is there ANY indication that Republicans can handle their budget better than Democrats? Definitely not. Debts grow and grow - NO MATTER which party is in power!

Well, probably I'm wrong:

This is 2011. Now there has to be 50% instead of 35% under Obama.

So much about math. :P

[Edited on 3-11-2012 by Pok]

Yeah so much for the "math" that cooks the books. That is not exactly CPA or accurate material charted there.

All you "progressive" (subversive) propagandists really should give it a rest. People are wise to what is going on with the fifth column Marxists calling themselves "Democrats" who are trying to destroy the republic and "good Americans" are simply not going to have it. What generations of Americans have built is not going to be liquidated in service of what a bunch of communists think is "social justice" or is a subversive agenda advanced under any other false flag like "diversity' or "affirmative action" or "environmentalism". Americans by and large are tired of the propaganda CRAP and want leadership having some business sense who can take care of business.

Pok - 3-11-2012 at 15:00

All you "progressive" (subversive) propagandists really should give it a rest.

The VIDEOS and PICTURES that you are posting throughout this thread - THAT is propaganda. Emotions, not facts.

I showed DATA. You did not.

[Edited on 3-11-2012 by Pok]

Vogelzang - 3-11-2012 at 15:03

Fox News anchor Heather Childers caused a stir on Twitter after she linked to a story suggesting that the Obama campaign may have threatened to murder Chelsea Clinton.

On Tuesday, Childers, who is a weekend and early morning anchor for the network, tweeted an article from titled, "Did Barack Obama Campaign Threaten Life of Chelsea Clinton to Keep Parents Silent on Obama’s Ineligibility?"


Most people in the US, especially Democrats, believe that the Obama Birther Movement was started by Republicans and or the Tea Party. They believe it is a smear campaign aimed to tarnish the image of their hero of change. But they may be shocked to learn that the Birther Movement was actually started by former President Bill Clinton and Hillary back in 2008.

Bettina Viviano was a vice president with Amblin Enterntainment, Steven Spielberg’s company, before launching her own film production company in 1990. In 2008, Viviano was asked to produce a documentary about voter fraud within the Democratic Party. At the time, she says she was not a Democrat or a Republican and in fact had never voted in an election. She went into the project with the sole purpose of producing the best and most accurate documentary possible.

During the documentary process, Viviano says that she quickly became aware of just how dangerous and insidious the Obama campaign was. A number of the Democrats she interviewed refused to appear on camera and told her that their lives and property had been threatened by people working with the Obama campaign.

She also heard former President Bill Clinton say that Obama was not eligible to be president because of his lack of birth records. In fact, she said it was common knowledge around many top Democrats. Bill Clinton has often said that he would go public with the information when the time was right.

Before that could happen, his close friend and head of the Arkansas Democratic Party, Bill Gwatney was murdered in his office and then someone told Bill that he was next if he said anything about Obama’s eligibility. In the video below, she said that Clinton was not intimidated until someone associated with the Obama campaign told him that his daughter Chelsea would be next if he opened his mouth. From that point on, the Clinton’s remained silent about Obama’s birth certificate or lack thereof.

Rosco Bodine - 3-11-2012 at 15:43

Quote: Originally posted by Pok  
All you "progressive" (subversive) propagandists really should give it a rest.

The VIDEOS and PICTURES that you are posting throughout this thread - THAT is propaganda. Emotions, not facts.

I showed DATA. You did not.

[Edited on 3-11-2012 by Pok]

Show one Congressionally approved operating budget for the U.S. just one of those budgets which are required by law, that has been presented and approved for the present administration ...There should be 4 of them. Let me save you the trouble ....there isn't one because there has never been one, not the first of four there should be and have been for every other president.

Look at the left bottom of your chart "Office of the Democratic Leader"

Your "data" is misleading and incorrect. It is disinformation.

Pok - 3-11-2012 at 16:34

Quote: Originally posted by Rosco Bodine  
Look at the left bottom of your chart "Office of the Democratic Leader". Your "data" is misleading and incorrect. It is disinformation.

:D Didn't you say that you have done the math? Read the y-axis. This figure is a simple calculation of the one above! People who know percentage calculation don't care about the source of the second figue. Read the first figure, use a calculator and - what a surprise - you will get the same data like the evil Democrats.

[Edited on 4-11-2012 by Pok]

watson.fawkes - 4-11-2012 at 07:32

Quote: Originally posted by Rosco Bodine  
Show one Congressionally approved operating budget for the U.S. just one of those budgets which are required by law [...]
Your "data" is misleading and incorrect. It is disinformation.
For someone who claims "Math" as an advantage to your side, you're conflating budgets and debt, two things even a high school bookkeeping student can easily distinguish. Total debt numbers are published by the Bureau of Public Debt, a part of the Treasury Department. This bureau publishes the Schedules of Federal Debt; the link has PDF versions of these reports with data back to 1997. Previous years were published on paper; I don't if they've been scanned. The Bureau of Public Debt's reports are audited by the GAO (General Accounting Office), which is not a trivial thing. (Aside: Much of the problem with Greece's public debt is that their equivalent reports were somewhere between incorrect and fraudulent, so that market discipline was not working for several years). The point is that Federal debt numbers are completely non-controversial.

Also see Wikipedia History of the United States public debt, which examines these numbers and more.

DerAlte - 7-11-2012 at 20:43

Election: My immediate reaction was : Obama? Oh, bugger!

But really all it means is more of the SOS. At least he got the majority of the popular vote. None of that electoral college nonsense, thank god.

>To the two republicans who managed to lose seats in senate races by their stone age religious views, namely Mourdock and Akins – I suggest they emigrate to some Islamic country where such views are popular. The electorate very rightly rejected them out of hand.

The Republicans need to get religion out of their politics. I got a call yesterday from the RNC (a computer call, which have been plaguing us all campaign) saying something negative about Obama and religion – it decided me it was pointless to vote, since a vote for Obama was impossible. Add to that the fact that the items on the Florida list stretched three pages, and some people had a 4 hour wait after the polls closed. “Democracy” run riot – you are asked to vote for the official janitor for the local council here.

The fiscal cliff beckons. See Rosco’s video posted on 5-11-2012 at 21:57 for a visualization of the rush of the Gadarene swine…

Major indices of the stock market say it all – down 2.8%. A bit better than last time Obama was elected – it was about -5% then. And that time he was the only feasible choice aginst Aging McCain and Bimbo Palin.

Get your act in order, Republicans (or I’ll have to consider moving to Chile).
Der Alte

Rosco Bodine - 7-11-2012 at 21:49

@DerAlte You get no argument from me about the RINO "teavangelical" extremists sabotage of the party platform with a non-sequitur constitutional issue that is settled law. I understand the conscientious objections and share some of those in a rationally qualified way ....but never have the wrong idea that most conservatives or most republicans share those zealots views. 3 million people who voted for McCain simply sat out this election in disgust and millions more moderates broke left because of the dumb and unyielding pseudoecclesiastical views of the RINOS led by the biggest RINO that ever came down the pike. Those zealots would rather be true to their principles and try to shove them down anybody else throat and lose an election that was important than to "compromise" their agenda which was never going anywhere except in their own fanatsy. I tried to tell them that the plank was a hole in the bottom of the boat and would cause a Harper Valley PTA blowback effect from all the Mrs. Johnson and daughter voters out there who would be 1 in 5 of the votes cast and would be responding to the insult and offensiveness of zealots. You don't win the votes of those you insult and offend but zealots don't care. So now we got SOS for another 4 just like you have said. If the real republicans don't get rid of the RINOS and teavangelicals as decision makers they can't win the independent and moderates who will rebel against those fanatics. That crew is as extremist in its own way as is the extremists in the other direction on the left. Anyway according to 51% fiscal insanity is the new normal ..who needs an effin budget ...yes we can and all that forward thinking stuff . The stock market did a long fart in what may be a flatulent commentary on the election results. The "carbon credit crew" thinks money grows on trees, and the debt is just pennies from heaven. With such masterminds in charge how could the stock market not be exhilarated with a sense of well being and euphoria ?

DerAlte - 8-11-2012 at 12:22

We are on the same wavelength. Wasteland to the left and right of us, conservatives lost in the trackless desert, a dwindling race. Far too late, Romney realized he had been preaching to the choir instead of the congregation. That is, if you could hear whatever message he was trying to put across. All I heard from the TV adverts was how damn bad the other guy(s) was (were). A disgusting performance on both sides, wasting enough unproductive money to keep a 3rd world nation afloat for six months.

And, since many automatically vote a straight ticket due to the length and complexity of the ballot, as the leader goes so goes the party. Thus, SOS, only slightly worse.

I take solace we are not alone, except many of the following are now deceased:

“The government is merely a servant -- merely a temporary servant; it cannot be its prerogative to determine what is right and what is wrong, and decide who is a patriot and who isn't. Its function is to obey orders, not originate them.” Mark Twain

“The problem with socialism is that you eventually run out of other people's money. ” Margaret Thatcher

“When one gets in bed with government, one must expect the diseases it spreads.” Ron Paul

“The more corrupt the state, the more numerous the laws.” Tacitus, The Annals of Imperial Rome

“Lord, the money we do spend on Government and it's not one bit better than the government we got for one-third the money twenty years ago.” Will Rogers

“A nation of sheep will beget a government of wolves.” Edward R. Murrow

….. and sadly, old Thomas Jefferson realized ages ago:
“A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine.”

Regards, Der Alte

497 - 9-11-2012 at 07:50

Congratulations all!

Its only been just a over a year and this thread now has the most total replies on the forum.

Thanks everyone for contributing. It was a messy, rambling process, but I sure learned a lot! Hopefully it will continue to confuse/infuriate/disturb/enlighten the internet for many years to come (if it lasts that long).

franklyn - 9-11-2012 at 08:57

Vogelzang - 10-11-2012 at 11:30

[Edited on 10-11-2012 by Vogelzang]

Vogelzang - 10-11-2012 at 12:26

the huge hidden cost of manipulating interest rates

AndersHoveland - 10-11-2012 at 12:57

When a central bank tries to manipulate interest rates, there is a huge hidden cost. Interest rates are set by the market. Just because a central bank issues all the money does not mean they can set interest rates to whatever they want without any extraneous effects. Money represents wealth. If you try to set interest rates to a certain level, there will be unintended consequences.

I have been thinking about this, and have come to the following line of thought. At the most basic level, money represents land, and interest rates represent the rent on that land. If you consider what these central banks hold as their reserve assets to back the money, much of it is equity in residential mortgages - essentially an indirect form of land ownership. Rents are determined by supply and demand. If a central bank attempts to artificially lower interest rates, it will affect the market price of land, not the level of rent. The price of land will go up in proportion to the artificial reduction in interest rate. If buyers can borrow more money at reduced cost, they will bid up the price of land. Of course, it will be the central bank(s) that will hold much of the equity in this land. They are using this equity to back all the new money in circulation.

The central bank can issue as much money as it wants, but where does it get the wealth to this? Even if the interest rate is small, there still has to be an immense transfer of wealth going on because the economy is so huge. The answer, as you no doubt suspected, is inflation.

So think, what would a situation have to look like for there to be the same effects of inflation without an actual devalueing of the money supply? In other words, what is the corresponding effects of inflation on the holding of wealth? Here is the answer: First, the central bank would confiscate a percentage of the money from everyone that held actual paper notes. Second, and a little more difficult to understand, all taxes would be increased and the central bank would now get a portion of these taxes. How is this? Because with reduced value of each note, the quantity of notes collected in taxation increases. Taxpayers need more money to pay their taxes, and the central bank issuing the new money has diverted some of the buying power to itself. (I have discuseed this in more detail in this thread: Inflation Augments Taxation )

The point of this thread is that a central bank setting interest rates has huge economic consequences, and these policies deserve more attention. Monetary policy should not be completely insulated from politics. The policies a central bank pursues will benefit some people and cost others. The effects are just as important as taxation.

How can the Fed Reserve Bank actually change interest rates?
If the Bank lends out more money at below market interest rates, all this money has to come from somewhere, it has to borrow the money, which will drive up interest rates as much as they are trying to lower them. If the Bank tries to change interest rates by buying or selling Treasury bonds, this will just cause inflation/deflation, counteracting the intended effect. The interest rate might change, but the inflation-adjusted interest rate (which is what really matters) will not. The only thing the bank has control over is inflation. Similarly, if the bank reduces lending, it can be viewed that the increase in interest rates come about merely because of the deflationary pressure of this decrease in money supply, and so the inflation adjusted interest rate again will not be changed.

All this should not be surprising; there is no "free lunch". The Fed is just moving money around, from one place to another, and this cannot affect market interest rates. The only influence the Fed has over the economy is inflation, and its combined interplay with government taxation.

franklyn - 10-11-2012 at 16:04

Just because you do not take an interest in politics doesn't mean politics won't take an interest in you !
-- Pericles (430 B.C.)

A government big enough to give you everything you want , is strong enough to take everything you have.
-- Thomas Jefferson

In general , the art of government consists of taking as much money as possible from one party of the citizens to give to the other.
-- Voltaire (1764)

Government is the great fiction , through which everybody endeavors to live at the expense of everybody else.
-- Frederic Bastiat (1801-1850)

The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.
-- Mark Twain

The ultimate result of shielding men from the effects of folly is to fill the world with fools.
-- Herbert Spencer (1820 -1903)

The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery.
-- Winston Churchill

Democracy must be something more than two wolves and a sheep voting on what to have for dinner.
-- James Bovard, Civil Libertarian (1994)


[Edited on 11-11-2012 by franklyn]

Vogelzang - 10-11-2012 at 17:18

ObummerOwesUs.jpg - 68kB

12AX7 - 10-11-2012 at 19:05

The Reserve Bank offers loans to banks at a set rate. Given certain regulations limiting who can get a loan and at what rate, a bank can offer loans at whatever rate they wish. A reserve bank has different restrictions, and generally offers the lowest interest rates, originating money from which other banks in turn create their loans at market rates (the difference being pure profit to the bank, at the expense of the signee). As the basic money supply, they have the power to control market forces by setting starting interest rates. Note that the best they can do is simply give the banks money (0% interest). To simulate a negative interest rate (paying the banks for taking loans -- please, take my money!!), they can print more money -- which is where "Quantitative Easing" comes from. Of course, this value is extracted from the entire economy by inflation.

Why banks need a reserve in the first place, I don't know. Back in the olden days, people would deposit money, and they would loan it out. Money comes and goes, and customers get their money when they need it. Too many people loan the same money too many times, though, and you can very quickly get a bank run, everyone (including the loan holders) demanding the withdrawl of their balances. A reserve is nice to cover this (presumably temporary) condition, but making it standard practice is financial socialism. Which really tells me, gold standard notwithstanding, there hasn't been a true new dollar in a century: it's all debt, piled up several times over. Which in turn means we're all (the entire world) indentured slaves for about three generations worth, and that's assuming the economy simply froze until it caught up with itself!


franklyn - 11-11-2012 at 08:04

This Thursday and Friday I bought TLT January PUTs at $119 strike price.
Bond prices may continue to rise some more yet in the short term but as we
have seen before , not for long. The long term trend of bond prices increasing
continues but it is a jagged road of swing trading the whole way.


497 - 13-11-2012 at 03:40

"Why of course the people don’t want war … But after all it is the leaders of the country who determine the policy, and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship … Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is to tell them they are being attacked, and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same in any country.”

Hermann Goering

Just too easy... How could it not be used as a way out of the increasingly obvious decline?

[Edited on 13-11-2012 by 497]

AndersHoveland - 13-11-2012 at 04:53

Quote: Originally posted by franklyn  
Just because you do not take an interest in politics doesn't mean politics won't take an interest in you !
-- Pericles (430 B.C.)

A government big enough to give you everything you want , is strong enough to take everything you have.
-- Thomas Jefferson

In general , the art of government consists of taking as much money as possible from one party of the citizens to give to the other.
-- Voltaire (1764)

Government is the great fiction , through which everybody endeavors to live at the expense of everybody else.
-- Frederic Bastiat (1801-1850)

Good quotes. I have some more to add:

"That Socialism would be immediately practicable if an omnipotent and omniscient Deity were personally to descend to take in hand the government of human affairs is incontestable."
— Ludwig Von Mises.

"Socialist governments traditionally do make a financial mess; they always run out of other people's money. It's quite characteristic of them."
— Margaret Thatcher

That being said, I do believe there are appropriate places for government intervention, including state-run businesses in certain industries. But I think the government has to be very careful. Better too little intervention than too much.

[Edited on 13-11-2012 by AndersHoveland]

franklyn - 13-11-2012 at 11:56

Nothing succeeds like success , nobody has succeded
as well as the multinational banks - at failing. When
failure is rewarded , what else can be expected.

The new paradigm

It is remarkably difficult to make a man understand something
when his salary depends upon his not understanding it
-- Upton Sinclair

Some people say we need a 3rd party.
I just wish we had a second one.
-- Jim Hightower


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