May the source be with you, but remember the KISS principle ;-)
Home Switchboard Unix Administration Red Hat TCP/IP Networks Neoliberalism Toxic Managers
(slightly skeptical) Educational society promoting "Back to basics" movement against IT overcomplexity and  bastardization of classic Unix

Financial Humor Bulletin, September 2009

Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec

[Sep 29, 2009] Marc Farber Equities Safer than Dollars -- Seeking Alpha


... In June 2008, Dr. Marc Faber ended his monthly bulletin with the following :

"The federal government is sending each of us a $600 rebate. If we spend that money at Wal-Mart, the money goes to China. If we spend it on gasoline it goes to the Arabs. If we buy a computer/Software it will go to India. If we purchase fruit and vegetables it will go to Mexico, Honduras and Guatemala. If we purchase a good car it will go to Germany. If we purchase useless crap it will go to Taiwan and none of it will help the American economy.

The only way to keep that money here at home is to spend it on prostitutes and beer, since these are the only products still produced in US. I've been doing my part."

[Sep 29, 2009] Prostitutes for the Wall Street Pimp

March 18, 2009 | Bird's Eye View

"You know what the news is-- in a minute, you're going to hear the rest of the story"- Paul Harvey

You need to understand, despite of all the political jawboning over AIG bonuses, nothing will change. Oh, there will be a lot of talk, hearings, and nasty comments in the press, but many of those doing the talking are nothing more than "Prostitutes for the Wall Street Pimp."

1) In 2000, when Wall Street analysts and brokerages were issuing bogus research reports, none of these people were found guilty or went to jail. The analysts, as we later found, were nothing more than a "Prostitute for the Wall Street Pimp."

2) Most of the brokers I know are nice guys, but they are also "team players". Being a team player for a brokerage firm means you nothing more than a "Prostitute for the Wall Street Pimp."

3) Investment banks are constantly sending every Presidential Administration a Prostitutes to fill cabinet positions to represent the interests of the Wall Street Pimp.

4) AIG bought bad assets from the Wall Street Pimp, received bailout money, which eventually flowed through to the Pimps for advice and council.

5) According to "Wall Street Watch", between 1998-2008, "Wall Street investment firms, commercial banks, hedge funds, real estate companies and insurance conglomerates made $1.725 billion in political contributions and spent another $3.4 billion on lobbyists." The pimps paid the prostitutes well.

[Sep 28, 2009] GDP = Gross Domestic Fudging

French President Nicholas Sarkozy has leaped with glee on the proposal by a commission headed by Joseph Stiglitz to redefine Gross Domestic Product. After all, if feminine attractiveness, length of vacations and quantity of garlic in the food can be included, France will rank much higher than in more old-fashioned measures. Plus, the existence of a new measure will enable politicians to fiddle the figures some more, something they always enjoy doing.

...One can understand why Sarkozy liked this. A society with lots of leisure, more equal income distribution, massive recycling programs and fussy food service would benefit immensely against a market-driven fast food culture.

[Sep 27, 2009] Data should show progress toward jobless recovery - MarketWatch

"Jobless recovery" is like "Bigfoot sighting" ...

"Implying the recession is over is like saying, 'Yes, there's been a nuclear detonation, but it's over now, so relax - and never mind that we're living in a post-apocalyptic world of unemployment, foreclosures and bankruptcies,'" said Ann Marie Spinosa of Astoria, Queens, who's on a panel of New Yorkers who blog about coping with hard times on our Web site,


Obviously, the economy will improve when all the people (SERVANTS) who work for Wall Street bankers (our Overlords) get their holiday bonuses. I love trickle-down economics.

Atlas Shrugged

Trillions of dollars of equity lost, millions of jobs lost, millions of homes lost, trillions added to the debt. Trillions given away to criminal bankers. ZERO investigations, Zero prosecutions, Zero responsibility. Thats the FED!

Dam,,,,,,,, It feels good to be a bankster.


Like a recovering alcoholic,who's first true test of character must come when he passes in front of a liquor store window showcase,is our credit addicted economy,every time it passes by easy money. But the first thing an alcoholic learns, is that in order to maintain sobriety, he must disassociate himself from his drunkard friends. How then,can our economy possibly recover, when the credit junkies themselves, are managing the credit?

[Sep 27, 2009] So Did Lucas Create HyperRational Expectations


I had to take some classes in upper level economics 25 years ago. The Professor was a rational expectations guy. Basically the practical conclusions were:

  1. dont buy real estate (this advice has saved me several million)
  2. dont by shares( I didn't; this also saved me millions).

 Thanks Lucas. Thanks Rational expectations. Because of you, I am a millionaire, still.

[Sep 27, 2009] Escape from Punchbowlism

The fact that "Punchbowlism" can be implemented by central banks by themselves makes it the default option.
The Baseline Scenario

Former Fed Chairman William McChesney Martin is most famous for his notorious quip that the job of the Fed is to “take away the punchbowl just as the party gets going.” It seems this has evolved into a full fledged theory of monetary management.

...Without the right scalpels and scaffolding, the Fed will use a sledgehammer – taking away the punchbowl during booms and giving it back during busts. Except that it will almost always get the timing wrong – taking away the punchbowl too fast and give it back too late, due to poor regulation and dollar instability, and its own anti-inflation intellectual bias and obsession with its credibility.


Memory (from Second-Best Punchbowlism - J. Bradford DeLong Blog)
Oh, weep for those poor central bankers who so desperately want effective and comprehensive regulation of the financial sector! Oh, were it not for the bitter fruit of democracy that imposes upon these wise Platonic technocrats the corruption of legislatures - bodies so easily captured by the dark forces of financial interests.

And, tragically lacking the regulatory tools they need to fulfill their proper role in the Republic, central bankers may need to use the blunt instrument of monetary policy rather than the skillfully-wielded scalpel of regulation.

This seems to me a story that badly misunderstands the nature of regulatory capture and serves primarily as a myth with which central bankers far gone in fantasies of moral self-justification can comfort themselves while walking through the revolving door between the financial sector and (nominal) public service. It ignores the history of how central bankers have actually behaved when they have had regulatory power and elides even the basic arguments put forward by Galbraith to explain the NY Fed's behavior (specifically its failure to "take away the methanol-and-vodka-spiked punchbowl") in 1929.

The truth may be out there, but the lies are in your head.

Ted K

...And I think the THREAT of an audit alone would be a healthy way to get Chairman Bernanke away from the Washington D.C. dinner parties (a’ la Greenspan) and keep Bernanke’s eyes on big banks’ balance sheets.


..the Fed is in for a surprise when they try to withdraw money from “credit channels” and find that the money has somehow migrated into the personal pockets of the bankers, from which it is somewhat harder to withdraw.

Uncle Billy vs. Mont Pelerin

Perhaps you can invite 3-4 experts on organized crime to discuss their thoughts on the extent to which criminals have captured the mechanisms of economies?

[Sep 26, 2009] We are in a Toilet-Shaped Recovery  by David Roche

Sep 23, 2009 |

Analysts have described the U.S. economic recovery in many shapes and sizes, be it L-shaped, W-shaped, or even shaped like the Nike swoosh symbol.

But David Roche, global strategist at Independent Strategy, added a new wrinkle on CNBC Wednesday.

" You want to know my shape? My shape is a toilet shape," Roche said on "Squawk Box Asia." "Because I think that's where 14% of (gross domestic product) in terms of spending and central bank help will disappear."

[Sep 26, 2009] A law to tame wild bankers

Bankslaughter n. The crime of driving a bank out of business by making excessively risky investments

[Sep 26, 2009] Bank of America $4 Billion, Taxpayers $425 Million

"A verbal contract isn’t worth the paper it’s written on. — Samuel Goldwyn"
The Baseline Scenario


“USG: You are in trouble and could take the financial market with you, but that’s just a perception issue. We’ll issue a statement that the USG will backstop your screw-ups and once people see this their perceptions will change. When they do, you go forward like nothing happened because nothing did. We don’t hit you for any fees, and you don’t go tits-up and implode the economy.”

“BOA: Deal.”

Issue press-release. Go home.


What I find interesting is an American culture of “gaming” the system.

It seems the financial elites have carte blanche to game the system it operates in.

[Sep 25, 2009] Jim Grant- Ringing the Bell at the Top

Given what Mr. Grant has just written, I can only ask: Did one of the world's best known bears just ring the bell at the top of the great dead cat bounce?

[Sep 25, 2009] More Smoke from the Federal Reserve On Their Opaque Operations in the Markets

[Sep 24, 2009] Chinese commod crisis over; OECD to rescue

FT Alphaville


 "chief global asset allocator"

also known as their "head of conceptualization to realistic application" or CRAp

[Sep 24, 2009] BoE expands QE

FT Alphaville

Robert Mugabe CEO:

In banana republics it´s very common to not only pick bananas, but also print a lot of money. it´s said to be very cool. First you pick bananas, then cut down the trees, produce paper and finally print money on that paper. It´s the whole business cycle. Highly recommended!

[Sep 24, 2009] Following the Footsteps of Japan

If Bernanke was such as wizard, why is the US in such miserable shape?

[Sep 24, 2009] Part 1 Minnesota's small banks on the brink

"Real estate is the cocaine of the banking business."

[Sep 24, 2009] Mission Accomplished – Part I: Wrecking of the world’s greatest economy

When the people lose faith, they do not then believe in nothing. They believe in anything.

[Sep 24, 2009] Fingers of Instability, Part VI Economic and Financial System Train Wreck Dead Ahead! by Ty Andros

[Sep 24, 2009] Watch That Thesis! (FOMC Announcement)

Today's FOMC announcement ought to result in the realignment of yours:

Information received since the Federal Open Market Committee met in August suggests that economic activity has picked up following its severe downturn.  Conditions in financial markets have improved further, and activity in the housing sector has increased.

We have monetized a scad of debt and that cash has wound up in equity markets.  They have risen in response to the dynamic of supply and demand.  Speaking of activity in the housing sector we're referring to the rocket-shot defaults on FHA mortgages.

Household spending seems to be stabilizing, but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit.  Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales. 

Neither business or consumer activity supports stock prices or provides us with any sort of indication that credit demand growth is going to return any time soon.

Although economic activity is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.

We believe in the Easter Bunny and Santa Claus too, as shown by the clear contradiction with our previous paragraph.

With substantial resource slack likely to continue to dampen cost pressures and with longer-term inflation expectations stable, the Committee expects that inflation will remain subdued for some time.

Prices are deflating, but we never use that word.

In these circumstances, the Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price stability.  The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. 

We told you there was no credit demand and that neither consumer or business conditions warranted any sort of real optimism, but since you're hard-headed we'll say it again.

To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt.  The Committee will gradually slow the pace of these purchases in order to promote a smooth transition in markets and anticipates that they will be executed by the end of the first quarter of 2010.  As previously announced, the Federal Reserve’s purchases of $300 billion of Treasury securities will be completed by the end of October 2009. 

The flood of monetization that powered the market from 666 to 1070 is ending.  We're going to taper this program down, mostly because we're rapidly becoming the entire market, and that's bad news (never mind that we might wind up with ALL of the credit risk, especially in the MBS market, which is substantial!  That would suck.)

The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets.  The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.

We're sitting on a metric ton of used dog-food and are having trouble sleeping at night.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.

We all hold hands now as we head for the cliff.... Wheeeeeee!

[Sep 24, 2009] The Fed Weather Update

The Big Picture

  • DIE, you horrible disgusting ugly trash-buying short-squeezing bear market rally, just DIE.
  •  Goldilocksisableachblond Says:

    This pic really sums it up for me. The “eye” analogy fits perfectly , IMO.

    When Obama was elected I had hopes that there would be real , bold change which would allow us to escape relatively unscathed. Now that I see that the kleptocrats will remain in control , I feel like Clooney in “The Perfect Storm” when they are again overtaken by the storm after passing thru the eye :

    ” She’s not gonna let us out. ”

    Another quote from that movie that comes to mind — near the end , the guy down below who’s up to his chin in water :

    ” This is gonna be hard on my boys. “

  • [Sep 24, 2009] FOMC Statement- Slow MBS Purchases


    Well, that was a huge surprise. Should be good for +200 on the Dow.


    Nemo, why do you hate America?

    Fed statements are like Viagra to gold.

    They Shoot Horses Dont They:

    The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.


     "After the collapse in several years, will condoms be a tradeable commodity?"

    New or used?

    "We know monetary policy can't actually grow an economy, but we will continue to do the only thing we know how to do, flood the system with cheap debased dollars."

    [Sep 23, 2009] Hale Bonddad Stewart Supply Side Economics and Generational Theft

    Figures don't lie but liars are always figuring. 

    Generational theft huh?

    Fact: The Republican Platform's main pillar is fiscal responsibility, while Democrats are always being accused of wasteful spending.

    Fact: Reagan ran up a huge deficit.
    Fact: H Bush continued that deficit.
    Fact: Bill Clinton balanced the budget and left office with over 250 billion dollars in SURPLUS.
    Fact: Dubya lost the surplus and ran up a trillion dollar deficit.

    Read more at:

    [Sep 22, 2009] Prepare for a wild ride - the WWW-shaped economic recovery

    FT Alphaville
    A big hat tip to  FT insurance correspondent, Paul Davies, for adding the below to our collection of recovery-shapes.

    The WWW-shaped recovery - graphic by FT Alphaville

    That is the WWW-shaped economic recovery, also known, in FT Alphaville parlance, as the rollercoaster of liquidity-inspired volatility-doom.

    [Sep 21, 2009] Satyajit Das on Dr. Jekyll and Mr. Hyde Finance

    Another variation on  an immortal “Four legs good, two legs bad!”  slogan ;-)
    naked capitalism

    Warren Buffet once described bankers in the following terms: “Wall Street never voluntarily abandons a highly profitable field. Years ago… a fellow down on Wall Street…was talking about the evils of drugs…he ranted on for 15 or 20 minutes to a small crowd…then…he said: “Do you have any questions?”

    One bright investment banking type said to him: “yeah, who makes the needles?


    The Reign of Terror, we should remember, followed upon the period when all political developments had fallen under the influence of Louis XVI’s ill-fated cabals and intrigues. The violence of terror, at least to a certain extent, was the reaction to a series of broken oaths and unkept promises that were the perfect political equivalent of the customary intrigues of Court society… Promises and oaths were nothing but a rather awkwardly construed frontage with which to cover up, and win time for, an even more inept intrigue contrived towards the breaking of all promises and all oaths… The widespread opinion that the most successful modes of political action are intrigue, falsehood, and machination, if they are not outright violence, goes back to these experiences… Whenever (genteel) society was permitted to invade, to overgrow, and eventually to absorb the political realm, it imposed its own mores and ‘moral’ standards, the intrigues and perfidies of high society, to which the lower strata responded by violence and brutality.
    –Hannah Arendt, On Revolution

    [Sep 21, 2009] Spending Collapses In All Generation Groups

    Consumers and banks both are suffering from a massive hangover. Their willingness and ability to drink is gone. No matter how many pints of whiskey Bernanke sets in front of someone passed out on the floor, liquor sales will not rise.

    Shichinin no Economai--NOT!!

    Nice gallery of freshwater  Lysenkoists. Nice rhetoric question from the discussion:  "How can disparate groups of top-ranking scholars consider the members of other groups as complete idiots? " 

    Justin Fox, in referencing the saltwater/freshwater divide, described Prescott's Arizona State as a "no water" school. Which is funny because it is true.

    Is it really possible that economists from top rank departments, some with Nobel prizes, are really making elementary, undergraduate errors?

    "it appears to me that what these people are saying is closer to religion that science."

    Fama's last reasonable chance (i.e., the last year it could be given to him without making Sveriges Riksbank a laughingstock) may have been last year

    In A Farewell to Alms, Greg Clark wrote that modern economic theory was useful for understanding pre-industrial economies but useless for explaining the modern world

    Federal Reserve Accounts For 50% Of Q2 Treasury Purchases

    With Bernake now living in a Minskian world while perceiving it through friedmaite eyes we've got problems!

    Pat Huggins - The bigger they come the harder they fall

     San Francisco $30 Billion Option ARM Time Bomb: From Carolyn Said at the San Francisco Chronicle: $30 billion home loan time bomb set for 2010

    An ode to those Bay Aryans that bought the loan-laced kool-aid...

    Juvenal Delinquent:

    (Summer of Shove)

    If you're owing in San Francisco
    You probably have a $400k HELOC on your lair
    If you're owing in San Francisco
    You're gonna have some upside-down company there

    For those who owe in San Francisco
    Summertime will be a send-off there
    In the streets of San Francisco
    Gentle people losing their lair

    All across the nation such a strange vibration
    People in foreclosure
    There's a whole generation with no explanation
    People in foreclosure, people in foreclosure

    For those who owe in San Francisco
    Be sure to have a getaway bag in your lair
    If you owe in San Francisco
    Sheriff's gonna show and request you get out of there

    If you owe in San Francisco
    Summertime will be a shove-out there

    noob goldberg:

     Clowns with a $750k ARM of which a third is neg am need subsidies too?

    Why not? The loan suppliers got them.

    Trickle down, baby, trickle down.

    [Sep 21, 2009] We Can't Cut Spending

    Economist's View


    "The first point that people need to understand is that we live in a democracy. We don't have a dictator who can just wave his hand and abolish government programs."

    Instead we have a sociopathic corporate oligarchy with votes for sale to the highest bidder.


    The stuff the beast strategy has worked far better than Reagan's more-famous starve the beast approach, since LBJ, really.


    "'Do they not always run on their dedication to the effort to end wasteful government spending?'

    What politician doesn't love to promise to eliminate waste, fraud and abuse from government spending? What politician ever has? Remember 'reinventing government'?"

    [Sep 21, 2009] Take This Monetary System, Please - Up and Down Wall Street Daily - R. Forsyth

    Chinese are very smart -- they quickly learned how to cheat on economic statists from their American friends.

    "HOW'S YOUR WIFE?" "COMPARED TO WHAT?" Henny Youngman may be gone more than a decade, but his one-liners live on. And that old joke provides insight into what's happening with currencies.

    [Sep 21, 2009] Lessons to Be Learned From Dow 36,000 By Barry Ritholtz

    Anyone can write a terrible book. But only shills are well paid for the effort ;-)
    September 20th, 2009 | The Big Picture

    “This book will convince you of the single most important fact about stocks at the dawn of the twenty-first century: They are cheap….If you are worried about missing the market’s big move upward, you will discover that it is not too late. Stocks are now in the midst of a one-time-only rise to much higher ground–to the neighborhood of 36,000 on the Dow Jones industrial average.”

    -Glassman and Hassett, introduction, Dow 36,000

    Call it the audacity of cluelessness: Let us congratulate James K. Glassman and Kevin Hassett, the authors of the incredibly money losing advice in their book Dow 36,000, on their 10 year anniversary.


    I hope they’ll remember their reply to critics in the January 2000 issue of The Atlantic Monthly: “if the Dow is closer to 10,000 than to 36,000 ten years from now [i.e. if the Dow is below 23,000 in January 2010], we will each give $1,000 to the charity of your choice.”

    On the other hand, G&H laughed all the way to the bank after writing the book. The book was probably their best investment in the market.

    How the Common Man Sees It:

    DOW 36,000
    The book… 18 used from $0.32

    So here is some irrational rationalizing:

    When the book was first sold it was probably going for 30 bucks. So the price tag relative to the 36,000 prediction looked pretty steep. Now, the book is 32 cents and the Dow is at 9820. So relatively speaking that book is a DEAL!

    [Sep 21, 2009] Henry Blodget vs. Ken Fisher "We Need More Debt"

    Mish's Global Economic Trend Analysis

    Numerous people sent me a link to a preposterous statement by fund manager Ken Fisher regarding debt. Please consider Too Much Debt? Please. We Need MORE Debt, Says Ken Fisher.


    Good Fisher. You have just prescribed the alcoholic more booze. You told the drug addict to snort more crack. You told the man addicted to gambling to move next to a casino. You told the obese woman to eat 3 chocolate cakes and 5 boxes of twinkies a day.

    You told the sex addict to get the playboy channel.

    [Sep 20, 2009] Jim Grant- Ringing the Bell at the Top

    ...English economist Arthur C. Pigou is credited a bon mot that exactly frames the issue. "The error of optimism dies in the crisis, but in dying it gives birth to an error of pessimism. This new error is born not an infant, but a giant."

    ... the picture of an economy that got drunk, fell down a flight of stairs, broke a leg and deserves to be lying flat on its back in the hospital contemplating the wages of sin

    [Sep 19, 2009] Greenspan Flunks Test, Bush Falls Into $15 Trillion Pit

    It's all about the socialization of risk and the privatization of profits: "give me all your money poor Pinocchio" (aka 401K investor)

    [Sep 19, 2009] Report from Europe Quadruple Witching Equals Volatility -- Seeking Alpha

    And Finally… The Puma Index

    Disclosures = None

    [Sep 19, 2009] A Email to Secretary Geithner

    No matter how much your debt is, it is still not too late for you to free yourself from your debt. Visit Free From Debt today ( and find the solution to be a debt free tomorrow. 

    Approved by Ben Bernanke.

    [Sep 19, 2009] Is the Rally Ending, or Does it Have More to Go The Big Picture

    Like a person diagnosed with schizophrenia financial markets demonstrate hallucinations, delusions, and disorganized and unusual thinking

    “It is stunning that we can go from abyss to euphoria in 12 months. Actually, this is just hard for me to grok. It is this rapid and intense turn in sentiment that has made this rally so unusual.”

    I have some relatives with ADHD and some other relatives with manic depression (now known as bipolar disorder). Euphoria and extreme grandiosity is common in the manic phase. Did the world look black yesterday? Hey, yesterday was a thousand years ago!

    [Sep 18, 2009] Volcker- Make Banks Less Risky

    The Big Picture

    Grow a spine, you corrupt, chicken-shit cowards, before the country goes to Hell,” we wish he was overheard to remark.


    We're all better. Now that didn't hurt too much. Helicopter Ben says the recession is over. Third quarter GDP will probably be between 3% and 4%. It is amazing what you can do to GDP when you hand people thousands of dollars to buy cars and new homes. You just print trillions of new fresh dollar bills, drop them from helicopters and poof - positive GDP. Why didn't we think of this before?

    [Sep 17, 2009] Obama's Presidency Isn't Too Big to Fail

    adopting the "wait and see" approach is like giving Bernie Madoff another five years to run his Ponzi scheme, just to make absolutely sure he's a crook.

    [Sep 17, 2009] Fortune Editor Andy Serwer Says Administration Gaming System For Wall Street Titans

    SERWER: I mean, it's amazing to me that as we recover, you know, come out of this financial crisis, you know, you'd expect a company like Goldman Sachs maybe things are improving, make a little money. But they have a record quarter. In other words, they made more money in this three month period than they ever had in any other--

    SCARBOROUGH: [archly] But they just made some good guesses, right?

    SERWER: Well, I don't know if it's okay or not, but I think what happened is that the government has telegraphed to Wall Street, not only Goldman Sachs but the other firms what it was doing, what was going on, what the program was, and so, essentially, it's like telling a Goldman Sachs, "Hey, put your money on 32 Black" at the casino, at the roulette wheel. And the thing spins and lo and behold, where does it end up, Joe?

    SCARBOROUGH: 32 Black?

    SERWER: 32 Black.

    [Sep 17, 2009] "It has now become clear that this was no ordinary crash."

    You can read the text  of Obama Wall Street Speech  HERE
    Jesse's Café Américain

    The Community Organizer-in-Chief is speaking to New York's Wall Street today, urging them to do the right thing for the country.

    ...So, when Obama chides the Wall Street wiseguys in stern terms to 'do the right thing,' one can forgive us if we hear, in echoes from the back of the room, "do this" and "get bent."

    He may as well walk into the aftermath of a vicious bank robbery and say to the perps with cash still in hand, "Now you boys stop doing that this minute. This is the fifth time you have stolen money and endangered the lives of innocent people. You can keep the money, but you had better not do it again.

    Sheriff Summers and Deputy Tim, who you know so well from drinking with them after hours at your clubs, will stop you if you do. And remember, Bennie the Bookie has his eye on you. By the way, Rahm says thanks for the gifts and remembrances, as always."

    [Sep 17, 2009] Financial Reform- Not happening but the need is clear

    naked capitalism
    Steve Keen, an Australian economist whose theories are heavily influenced by Hyman Minsky, has a cogent analysis of the true structural deficits in the current economic model that I think bears repeating here. He warns that we are trying to kick the can down the road and this will lead to an even larger bust.

    In his most recent post, he put it in terms anyone can understand.

    You have just come from your annual medical checkup, where your doctor assures you that you are in robust health.

    Walking jauntily down the street, you bump into a practitioner of alternative medicine. He takes one look at you and declares “You have a serious tumour! It must be removed or you will die”.

    You ignore him as you always have, and continue your merry way down the street. One day later, a stabbing pain suddenly cripples you, and you collapse to the pavement.

    In agony, your call your doctor, who initially refuses to send an ambulance because he knows you are well.

    When you lapse into a coma and stop talking mid-sentence, your doctor concludes that perhaps something is wrong, and sends an ambulance to take you to hospital.

    Initially the doctor waits for you to revive spontaneously, because he still knows there’s nothing really wrong with you. But as your pulse starts to weaken, he reluctantly calls a retired doctor who had experience of a similar inexplicable malady in the distant past.

    She prescribes massive doses of tranquilisers, painkillers, vitamins, and oxygen—all substances that had been removed from the medical panoply due to recent advances in medical theory. Reluctantly, your doctor follows his retired colleague’s advice—and miraculously, you start to revive.

    After a year of expensive medical treatment, you return to the same robust health you displayed before your inexplicable illness. Triumphant, if somewhat puzzled, your doctor declares you well once more, and releases you from intensive care.

    As you stride confidently away from the hospital, you have the misfortune to once again bump into the practitioner of alternative medicine.

    “But they haven’t removed the tumour!”, he declares.

    … ... ...

    One shouldn’t have to spell out the details of such an analogy, but in times of widespread denial, one has to:

    [Sep 16, 2009] Bernanke Says Recession Over; Should You Care?

    Bernanke said recession over. Time to get out of the market ?

    Recall it was Mr. Bernanke who described the sub-prime situation as “Contained;” it was he who believed Housing would not spill over to the broader economy; and it was he who somehow thought the Bear Stearns situation was a one-off.

    [Sep 16, 2009] Devil’s Dictionary- Wall Street Edition

    Amusing take on Ambrose Bierce’s classic in the Journal today.


    AAA, n., obsolete. A rhetorical device used to dupe buyers into purchasing securities backed by shacks dressed as houses, and to secure the highest possible spot in telephone directories. Common usage: AAA Septic Drainage and Mortgage Backed Security Services.

    BAILOUT, n. First known use: Noah. Novel regressive taxation scheme whereby vast sums of capital are transferred from those citizens who didn’t participate in the illusory Bacchanalia of the housing bubble to those who did and weren’t clever enough to get out in time.

    BANK, GOOD, n., archaic. Sober, conservative, risk-averse institutions designed to midwife customers’ capital and enable prudent lending to deserving businesses and consumers. See Capra, F., the Bailey Building & Loan Association.

    BANK, BAD, n. 1. Everyone else. 2. Especially Goldman Sachs.

    CREDIT-DEFAULT SWAP, n. loose translation from the original Latin “ubi mel ibi apes,” or “where there’s honey there are bees.” 1. A complex financial instrument vital to the functioning of a modern economy in the way it spreads risk among consenting parties. (Greenspan, A., pre-Sept. 2008.) 2. A complex financial instrument that nearly destroyed modern capitalism (Greenspan, A., post-Sept. 2008).

    CREDIT LINE, n. A set amount of borrowed money available only to those who don’t need it.

    CREDIT-RATING FIRMS, n. Firms that do scant rating of people with scant credit.

    DEFICIT, n. For the party in power, at worst a minor irritant and at best a precondition for economic growth. For the minority, the gravest threat to the stability of the Republic.

    TOO BIG TO FAIL, idiom. Banks, insurance companies, car companies, presidential approval ratings, Fed chairmen seeking second terms, other people who think they should be Fed chairman, the reputations of people who’d be responsible for letting things fail. Antonym: TOO BORING TO SAVE.

    Fun stuff . . .

    The Devil’s Dictionary — Financial Edition

    1. Bruce in Tn Says:

      Bernanke or Bernanked: Unconditional love. First defined in the Great Recession when very bad, no good investment banks were given huge sums of money, and then proceeded to spend large portions of that Bernanked money on bonuses for a job well done in creating a state of bankruptcy. A difficult definition to understand unless one lived through that time.

    2. sharkbait Says:

      investment bank: 1) can be an over-leveraged investment co. (see: hedge fund) which morphs into a bank holding company in order to receive TARP funds, then back to investment bank. 2) Whatever it wants to be. 3) Depends on rules of the game, which change frequently to facilitate maximum profits. Rules set, and unset by Congress, and function of campaign contribution amount. 4) Need to define “is” first. See “Bad Bank”, above.

    3.  Bruce in Tn Says:

      Retirement: (archaic)…The end of one’s working life. In times goneby, a time to reflect and enjoy the fruits of one’s labor. For all intents and purposes ended as a viable definition in September, 2008.

    4.  Bruce in Tn Says:

      Federal funds rate: Definition unchanged since 2009. Became known as “zero”. Minor attempts to change the definition brought about gnashing of teeth and wailing in Washington, D.C. so the definition became permanent by law in December, 2009.

    5.  call me ahab Says:

      B in T-

      you are on to something my friend- although i do think retirement is a recent phenomena anyway- people use to work until they couldn’t work anymore

    6.  cvienne Says:


      “I” could also be INVESTOOLS, who buy equity shares in the “bad bank”s involved in CDS instruments…

    [Sep 16, 2009] Laid off by Lehman - one year later

    Favorite line: 
    I walked up to the casino table with nothing in my pocket. And I'm leavin' with nothing in my pocket. But in between that time? Man, was I on a roll.

    [Sep 16, 2009] I Admit It

    the recovery many equity traders and economists see on the horizon is actually disappearing into the sunset.

    [Sep 16, 2009] A Modest Proposal- A Nation of Bankers

    The Big Picture

    My friend Scott is a hedge fund manager who noted the following, with just a trace of irony in his voice:

    Joe Stiglitz, in an interview from Paris with Bloomberg over the weekend, noted that “if workers do not have income, it’s very hard to see how the U.S. will generate the demand that the world economy needs.”

    With all due respect to a Nobelist who’s been on the right side of many of the economic debates of the last few years, I’m surprised that the obvious and simple answer to declining worker incomes in the United States escaped him:  We all become banks, borrowing short from the Fed at zero interest, and lending long to the Treasury at 330-370 basis points. The profits from that trade can be invested in the stock market, so that we can all diversify our income streams.

    Presto, household balance sheets repaired, and we’re off to the races again.

    Sounds like a plan, Scott!

    [Sep 15, 2009] Fed's Yellen -- The Outlook for Recovery

    Is not Yellen just another despicable Greenspan crony ?

    [Sep 14, 2009] Happy Anniversary !

    Donald Luskin looks like a worthwhile competitor of Larry Kudlow ;-)

    While everyone is so focused on the anniversary of Lehman Brothers (9/15) and AIG (9/16), today is a different sort of anniversary: Its been exactly one year months since the single dumbest column ever published in The Washington Post appeared: Quit Doling Out That Bad-Economy Line.

    Breathtaking in its ignorance, shocking in its fallibility, astonishing in its author’s perversely misperceived world view, it stands as a monument to sheer cluelessness in a single person:

    Quit Doling Out That Bad-Economy Line -
    By Donald Luskin Sunday, September 14, 2008; Page B01

    "It was the worst of times, and it was the worst of times."

    I imagine that's what Charles Dickens would conclude about the current condition of the U.S. economy, based on the relentless drumbeat of pessimism in the media and on the campaign trail. In the past two months, this newspaper alone has written no fewer than nine times, in news stories, columns and op-eds, that key elements of the economy are the worst they've been "since the Great Depression." That diagnosis has been applied twice to the housing "slump" and once to the housing "crisis," to the "severe" decline in home prices, to the "spike" in mortgage foreclosures, to the "change" in the mortgage market and the "turmoil" in debt markets, and to the "crisis" or "meltdown" in financial markets.

    It's a virus -- and it's spreading. Do a Google News search for "since the Great Depression," and you come up with more than 4,500 examples of the phrase's use in just the past month.

    But that doesn't make any of it true. Things today just aren't that bad. Sure, there are trouble spots in the economy, as the government takeover of mortgage giants Fannie Mae and Freddie Mac, and jitters about Wall Street firm Lehman Brothers, amply demonstrate. And unemployment figures are up a bit, too. None of this, however, is cause for depression -- or exaggerated Depression comparisons.

    Overall, the pessimists are up against an insurmountable reality: In the last reported quarter, the U.S. economy grew at an annual rate of 3.3 percent, adjusted for inflation. That's virtually the same as the 3.4 percent average growth rate since -- yes -- the Great Depression.

    Why, then, does the public appear to agree with the media? A recent Zogby poll shows that 66 percent of likely voters believe that "the entire world is either now locked in a global economic recession or soon will be." Actually, that's a major clue to what started this thought-contagion about everything being the worst it has been "since the Great Depression": Politics.

    Patient zero in this epidemic is the Democratic candidate for president. As it would be for any challenger, it's in his interest to portray the incumbent party's economic performance in the grimmest possible terms. Barack Obama has frequently used the Depression exaggeration, including during a campaign speech in June, when he said that the "percentage of homes in foreclosure and late mortgage payments is the highest since the Great Depression." At best, this statement is a good guess. To be really true, it would have to be heavily qualified with words such as "maybe" or "probably." According to economist David C. Wheelock of the Federal Reserve Bank of St. Louis, who has studied the history of mortgage markets for the Fed, "there are no consistent data on foreclosure or delinquency going all the way back to the Depression."

    The Mortgage Bankers Association (MBA) database, which allows rigorous apples-to-apples comparisons, only goes back to 1979. It shows that today's delinquency rate is only a little higher than the level seen in 1985. As to the foreclosure rate, it was setting records for the day -- the highest since the Great Depression, one supposes -- in 1999, at the peak of the Clinton-era prosperity that Obama celebrated in his acceptance speech at the Democratic National Convention late last month. I don't recall hearing any Democratic politicians complaining back then.

    Even if Obama is right that the foreclosure rate is the worst since the Great Depression, it's spurious to evoke memories of that great national calamity when talking about today -- it's akin to equating a sore throat with stomach cancer. According to the MBA, 6.4 percent of mortgages are delinquent to some extent, and 2.75 percent are in foreclosure. During the Great Depression, according to Wheelock's research, more than 50 percent of home loans were in default.

    Moreover, MBA data show that today's foreclosures are concentrated in that small fraction of U.S. homes financed by subprime mortgages. Such homes make up only 12 percent of all mortgages, yet account for 52 percent of foreclosures. This suggests that today's mortgage difficulties are probably a side effect of the otherwise happy fact that, over the past several years, millions of Americans of modest means have come to own their own homes for the first time.

    Here's another one not to be too alarmed about: Obama is flat-out wrong when he frets on his campaign Web site that "the personal savings rate is now the lowest it's been since the Great Depression." The latest rate, for the second quarter of 2008, is 2.6 percent -- higher than the 1.9 percent rate that prevailed in the last quarter of Bill Clinton's presidency.

    Full disclosure: I'm an adviser to John McCain's campaign, though as far as I know, the senator has never taken one word of my advice. He's been sounding a little pessimistic on the economy of late, too. And to be fair, he isn't immune to the Depression-exaggeration virus, either. At a campaign news conference in July, my fellow adviser Steve Forbes warned that Obama was seeking "the biggest tax increase since Herbert Hoover and the Great Depression." Factual? Almost certainly not.

    ... ... ...

    And Obama's infection by the Depression-exaggeration bug goes way back. His first outbreak came on Oct. 2, 2002, in his famous speech opposing the invasion of Iraq, delivered when he was an Illinois state senator. He said that the invasion was "the attempt by political hacks like Karl Rove to distract us from" a litany of economic troubles including "a stock market that has just gone through the worst month since the Great Depression."

    ... ... ...

    McCain campaign adviser and former U.S. senator Phil Gramm was right in July when he said that our current state "is a mental recession." Maybe he was out of line when he added that the United States has become "a nation of whiners." But when it comes to the economy, we have surely become a nation of exaggerators.

    [Sep 14, 2009] Economic Donkeys

    I am all for the military preventing people from messing with what’s rightfully the profit of the financiers.

    [Sep 14, 2009] Missing Radical Deregulation As a Cause of Crisis

    As long as they [banks -NNB] are concerned about their own survival, they aren’t concerned about yours.

    [Sep 14, 2009] NY Times Lehman Post Mortem: The Power of Denial

    naked capitalism

    There is a not bad piece at the New York Times on the fates of various ex-Lehman employees a year after the collapse.

    The story vividly if unwittingly illustrates the old saying that fish rot from the head.

    Selected comments

    if a man’s bonuses depends on him NOT seeing something, he will not see

    [Sep 13, 2009] IMF Head Says Crisis Set to Continue

    President Obama promised change, but then there is the French quip that as much as things change they remain the same.

    [Sep 11, 2009] Liquidity/Sentiment Review

    [Sep 11, 2009] Junk Bond Defaults Worst Since Great Depression. So Why Is The Market Rallying-

    civil-disobedience :

    Why are Corporate Bonds holding up so well? Civil is uncertain (i.e. Clueless).

    But I bet China has something to do with it!

    All this talk of a powerful China has Civil considering how to profit from this.

    After viewing Swani's excellent China links "City On Steroids" & "Outsourcing Unemployment" by Vanguard, and my other massive readings on the topic of China's rise, Civil likes what he sees in China. Civil has decided to take bold action.

    I have scheduled a "Nationality Change Operation".

    Yes. That's right. The China story is so compelling, that Civil is going to be operated on, by some leading edge doctors.

    Civil is going to become Chinese!

    It will not be easy. But I cannot see the existing policies in USA working to make us a better society to live in. There will be a decline in standards of living in USA. The outright theft of the USA, and not a single indictment or prosecution, is too much for Civil to bear.

    Civil-Disobedience normally thrives in times of Civil unrest, but this may be too much to handle. So Civil is going to "bite the bullet", and take it one level past Mr Jim Rogers, who just moved to China. Civil will be Chinese.

    Wish me luck.


    A witty writer referred to 911 as "neocon Christmas". That is wit!

    The day will be quite normal for me "lest the terrorists win". Maybe I'll go shopping.

    [Sep 11, 2009] Obama-Bama

    As Bloomberg points out:

    The Obama plan would label Bank of America, New York-based Citigroup and others as “systemically important.” It would subject them to capital and liquidity requirements and stricter oversight, relying on the same regulators who didn’t understand the consequences of a Lehman failure.

    [Sep 11, 2009] Out of the Woods . . . The Big Picture#comments#comments

    1. Deflator Mouse Says:

      Guess what the bear just did in the woods…..

    1. leftback Says:

      There once was a Bear
      Who was lighter than Air
      Who went for a walk by the Cliff

      On escaping the Woods
      He said “now it’s all Good.
      I can fly, I can fly, it’s a Gift!”

      But this very large Bear
      Had been filled with Hot Air
      To enable a brief Dead Cat Bump

      The Bear woke with a Start
      And let out a huge Fart
      Then returned to the Earth with a Thump

    2. call me ahab Says:


      damn- you’re a poet- pretty good too-

      re the bear- in the next frame the bear jumps into a hot air ballon that says Dow 14,000-

      economy is saved!

    3. call me ahab Says:

      going broke-

      well- how about the balloon goes up and up- but the angry, molested, and raped citizenry shoot at it with their squirrel guns-

      ballon bursts and plummets to earth-

      the bear lives- dizzy and confused- but nourishes himself on the dead bulls scattered about-

      the end

    [Sep 11, 2009] Five Points on the Markets, Earnings, Economy

    Mish's Global Economic Trend Analysis

    bailout bingo:

    The good news is that the patient (ie the economy) is out of the hospital. The bad news is that he must return to a dialysis center (ie the Fed) 3 times a week to pull toxic waste out.

    [Sep 11, 2009] Beat the Press Archive The American Prospect

    Andrei Vyshinsky

    Does anyone except for the most imbecilically naive still believe that Barak Obama is anything but the most insufferable marionette?

    Mike Meyer

    Andrei: IMHO GWB holds the lifetime title for Most Insufferable. BUT since WE've already suffered through 8 years worth of Codpiece, YOU may have a point by this time next year. 'Till then he's just runnerup.

    [Sep 10, 2009] A Shot Across the Bow (Debtors’ Revolt Watch)

    [Sep 10, 2009] Safe Haven On Disclosure, Honesty, Ethics, and Outright Lies Who can you trust these days

    ...investing in the US public equity markets becomes essentially a widespread, electronic form of Vegas slot machines.

    [Sep 10, 2009] Simple math of decline

    From comments...

    Bush, Paulson, Bernanke = Obama, Geithner, Bernanke

    [Sep 10, 2009] Why Do Consumers Accept Debit Card Abuse charged him seven $34 fees to cover seven purchases when there was not enough cash in his account, notifying him only afterward.

    So he was stunned when his bank charged him seven $34 fees to cover seven purchases when there was not enough cash in his account, notifying him only afterward. He paid $4.14 for a coffee at Starbucks — and a $34 fee. He got the $6.50 student discount at the movie theater — but no discount on the $34 fee. He paid $6.76 at Lowe’s for screws — and yet another $34 fee.

    All told, he owed $238 in extra charges for just a day’s worth of activity.

    [Sep 10, 2009] Laying people off gets us ?...another lesson from cactus by Cactus

    An interesting variant of "layoffs enhanced" Peter Principle...
    Angry Bear
    A friend of mine - I'm gonna call him Gilbert - was telling me about some happenings at his office that might sound familiar, as I've heard quite a few variations on this theme recently. Gilbert is a middle manager at a Fortune 500 multinational, which, like many companies large and small, had a couple well-publicized rounds of layoffs this year and last, and one kind of phantom round in 2007 (which I believe puts them ahead of the layoff curve). The phantom round was somewhat disguised by a simultaneous generous early retirement offer to which all employees sixty and over were eligible.

    The interesting thing is this... the end result of these layoffs, as far as Gilbert is concerned, is that the likelihood of an incompetent person being fired from the company has decreased since 2007. This is because, in ordinary times, a manager will get rid of those he deems incompetent because he knows he will be allowed to replace those individuals when suitable replacements are located. Furthermore, in the interim, before a competent replacement is found and hired, there's enough slack in the system that the functionalities formerly performed (or not) by the incompetent employee can be performed (and performed better) by others in the organization.

    On the other hand, in times of large scale layoffs, there is no slack. There is nobody else there to take on the functionality during the intervening transition. But there is also no intervening transition. When there are layoffs going on, many (most?) spots on the org chart that don't have people's names on them stay empty. Eventually, many of these empty spots disappear. Those who manage staff understand that they will retain the responsibilities, even if they don't have the resources, and a lousy resource is better than no resource at all. So in times of layoffs, they don't volunteer their reports, even the ones they would normally like to fire.

    Now, you may be thinking... well, when a manager like Gilbert is told he has to reduce his head count by X as part of some layoff, he's going to pick his X least competent employees and fire them. But it turns out that is only partly true. See, layoffs are also occasions in which the needs of the organization are "rationalized." That is to say, a number of functionalities are deemed redundant, and the folks who do those jobs are let go, whether competent or not. The decision about which functionalities are no longer necessary are often made by someone high up in the organization, and according to Gilbert at least, are usually wrong.

    The logical end result of Gilbert's theory... the company he works for now has a greater percentage of incompetent people working in it now than it did before it started laying people off. That would otherwise make the company that much less competitive, except that its main competitor has undergone exactly the same process.

    [Sep 10, 2009] Chronically obese GDP

    It's no secret why this is so: spending on medical care has exploded in the last 25 years, and now accounts for a whopping 20% of personal consumption expenditures and 14% of GDP.

    [Sep 10, 2009] Coming Soon- Interest-Only Mortgage Defaults

    Go figure: If banks give mortgages to people who cannot afford them, they tend to go in to default in large numbers.

    Who ever could have foreseen that coming . . . ?

    [Sep 9, 2009] Prada to Pravda By Chan Akya

    This is closer to satire then humor, but so be it...
    Aug 29, 2009 | Asia Times
    "Do we have to suffer through this transparently manipulative pseudo-reality again?"

     - Dr Sheldon Cooper, Big Bang Theory, Series 2. [1]

    Yes Dr Cooper, apparently we do.

    As we approach the 20th anniversary of the fall of the Berlin Wall, the decline of the Soviet Union is being mirrored by a parallel decline of the United States. What passes as reality on the pages and screens of the financial media today is so far removed from ground realities as to suggest a renewed version of the Pravda economy that the Soviet Union tried to build and failed. A "then and now" comparison isn't just stark but also quite scary for anyone with common sense (that excludes today's stock market investors right away).

    Then (or, a long time ago in the Soviet Union):

    Now (or, as things stand in the new Soviet Union): Creating the pseudo-reality: Ignore the important and the obvious

    Ignoring abject reality is the key process of governance. In the Soviet Union, this was achieved through the simple medium of a complete news blackout for citizens, other than state-sponsored propaganda through various channels. In the case of the US, much the same has been achieved, but by using the opposite tactic of selective reinterpretation of news that helps cast it in much better light.

    For example, consider what is going on in Afghanistan. The Soviet Union denied to its citizens that the occupation was going badly, and indeed did not publish any figures for personnel losses. Right up to the day that Soviet troops pulled out of the country, bled dry by the insurgents who had been sponsored by the Americans, citizens of the USSR did not even know how bad the situation was.

    When the then-Afghan president Mohammad Najibullah was stripped and hanged in public by the Taliban in 1996, the news media finally should have taken cognizance of the monster that had been unleashed in the form of militants whose answer to a "higher calling" was to do some pretty awful things in their temporal existence. Instead, the American and European media extolled the "freedom fighters" while quietly praying that the chaps would turn in their unused Stinger missiles. Well, we all know how that went.

    Fast forward to now, and the steady erosion of North Atlantic Treaty Organization (NATO) authority across Afghanistan isn't fully understood by viewers of American television, nor perhaps by the average newspaper reader. To wit, the rapid increase in the deaths of British soldiers that could well spiral into their complete withdrawal from the country at the drop of a terrorist hat (the British will only be following the course of the Spanish, who left Iraq in response to the terrorist bombing of trains in Madrid in 2004), a course of action that will soon be adopted by all other components of NATO in Afghanistan.

    Where that will leave the US, I do not know. However, the trend is quite clear and Obama's addition of a few thousand troops will prove about as significant as throwing a water balloon at a California wildfire.

    Now, most readers of this publication will already be familiar with all of this. The point to note is that the Afghan situation hasn't been seriously discussed on US networks because of fear of where the conversation will lead. The point isn't so much whether the country is Obama's Vietnam (technically speaking, it will have to be characterized as that of president George W Bush), but what the actual end game is that's being played out here.

    Does the US think that staying in the country for the next 20 years is feasible? Would Americans expect a reduction or an increase in the production of opium? Is there an ethnic allocation plan in place (think Iraq, but with real bloodthirst and guns) - because the notion of a single country is quite laughable? How are the terrorists and the Taliban to be dealt with - through education and modernization as per the NATO dream or through continued bombings as per the current plan?

    Most of all, what is the actual definition of success in Afghanistan for NATO and the US?

    For the Soviet Union, there were no real answers to the questions I pose above. It actually wouldn't really have known even if victory had passed it on the high road to Kabul a couple of times, mainly because there was no actual definition of victory. It was basically occupation for its own sake.

    You might ask why any of this is relevant to the broader issues raised at the beginning of the article. From my viewpoint, Afghanistan is an important issue because understanding the end game may well offer a vignette of the thinking on all other radical measures being planned and executed by the US government - ranging from the Keynesian economy of zombie companies and individuals to the next steps on medical services reform.

    Drugs and reality
    In the Soviet Union, there was an appropriate saying, "The government pretends to pay the workers, and workers pretend to work." The downside of that trade-off was that Russians (and other nationalities contained within the Soviet Union) did not believe in the possibility of any improvements in their life quality and behaved with the nihilism appropriate to that observation.

    This seemingly harsh statement has within it the notion of truth wrought by the idea of what separated a successful Russia from an unsuccessful one in that era: getting ahead in the ration queue, or getting to drive the plush version of the Lada. Gee, what an improvement over being a few places behind in the same queue for stale bread and spoilt meat; or driving a smaller Lada.

    No surprise then that Russians took to vodka. As a society, Russians looked at the queues as unfairness of the system towards them as individuals (because some people were able to leapfrog the system), rather than recognize that they were victims of an unsustainable economic system.

    Being unable to distinguish between secular and cyclical decline is the actual problem for developed nations today - Americans and Europeans think of equity market declines and the house-price falls of 2006-08 as the key issue, rather than as a necessary correction after years of excess. So now traditions and social mores are sacrificed at the altar of recovering wealth lost over the past two years.

    How intelligent people reconcile the obvious areas of cognitive dissonance - many people you know are not only bankrupt but also unemployed and unlikely to rebound any time soon, yet you are asked to believe that the "economy is growing again" - is a matter not so much of anthropological interest but one that determines the course of global developments.

    It's interesting to me then that pretty much no one appears bothered that the rising scourge of prescription drugs, particularly antidepressants, could well prove to be the key problem for these societies down the road; if anything, some in the media appear to believe that drugs are helping to "contain" social problems. Much like alcoholism cured Russian violence, I'm sure.

    History may choose not to repeat itself. But if it does, watch for results that aren't vastly dissimilar to the declines that we saw in the case of the Soviet Union. In the interim, the number of people who do not want to hear the truth will likely rise, as denial becomes one of the cornerstones of happiness.

    Eat a burger, drink some beer and pop some pills, dude. Then switch on the telly and have the cable news ladies tell you how good things are going to be.

    Note 1.Big Bang Theory is a CBS television series in which fictional character Sheldon Cooper, played by Jim Parsons, is a theoretical physicist.

    [Sep 9, 2009] Central bankers stuck in a hole

    The Jackson Hole retreat truly kept central bankers in the hole as they savored the success of their sauvetage of failing banks and boasting full confidence about economic recovery.

    ...Their pronouncement is akin to a drunken driver saying that the lesson from being drunk is that one gets a hangover and says and does things that hurt others - conveniently forgetting that it is excessive alcohol that led him to his drunken state and the next time he could kill himself as well as others.

    [Sep 8, 2009] Moron capitalism  By Julian Delasantellis

    Among government infrastructure spending projects ready to be funded, stock market appeared to be the most  "shovel ready" ;-)
    Sep 2, 2009 | Asia Times

    Perhaps a future economics teacher, after lecturing on the previous historical epochs of agricultural capitalism, feudal capitalism, industrial capitalism and finance capitalism, will look down into his textbook to see the chapter heading that covers our current era - "moron capitalism".

    [Sep 7, 2009] YouTube - Smash And Grab Theft At Apple Store

    $46,345 in 31 seconds. Gee, that approaches CEO wages.

    [Sep 7, 2009] Keeping Us There The Big Picture#comments

    A rising market act as an incredible anesthetic (opium, even) on the folks that count in making anything happen

    The Nature of Modern Finance

    It's definitely clogs the arteries of economic and endanger patient with obesity ;-). but it's more like gambling -- an activity that produces no tangible or lasting good to its willing participants, yet yields to its operators an ever increasing share of economic output. It's a huge rent (private tax) extracted from the society.

    ...there is growing evidence that the vast majority of what happens in and around modern financial markets is much more like junk food – little nutritional value, bad for your health, and a hard habit to kick.

    U.S. Markets Flash Strong Warning Signals -- Seeking Alpha


    To expect the Fed to not prop up the financial sector at taxpayer expense is to expect your dog to not lick his balls.

    The urge to do it, for both, is just too irresistible.

    [Sep 4, 2009] Peter Schiff on the Surge in Gold

    Banksters as a form of Islamic terrorism ?

    ...the US is 'ground zero' for the Wall Street debt fraud and bubble economy based on the dollar reserves.

    [Sep 3, 2009] charles hugh smith-The Pareto Principle and the Next Wave Down in Real Estate

    All we need for a complete bubble reflation is people avidly gaming the system... oh wait, we have that, too. A recent Time magazine cover story on Las Vegas contained this informative tidbit (courtesy of Michael Goodfellow):

    (Realtor) Boemio specializes in short selling, in a particularly Vegas way. Basically, she finds clients who owe more on their house than the house is worth (and that's about 60% of homeowners in Las Vegas) and sells them a new house similar to the one they've been living in at half the price they paid for their old house. Then she tells them to stop paying the mortgage on their old place until the bank becomes so fed up that it's willing to let the owner sell the house at a huge loss rather than dragging everyone through foreclosure. Since that takes about nine months, many of the owners even rent out their old house in the interim, pocketing a profit.

    [Sep 2, 2009] Wilbur Ross- 500 More Banks to Fail by End of 2010


    Is anyone keeping a scorecard of the estimates?

    Whitney: 600 banks
    Ross: 500 banks 


    Angry Saver (profile) wrote on Wed, 9/2/2009 - 5:15 pm

    Wilbur Ross is a perfect example. He's a billionaire who doesn't have the sack to bid without the FDIC holding his hand and guaranteeing his returns.

    The US billionaires are TBTF. We can't survive without their tax revenue.


    Look at Bernanke....he got elected.
    Let them eat cake? Sounds like a risky decision.

    [Sep 2, 2009] Data Points to Ongoing Economic Woes

    1. call me ahab Says:

      “Bailed-Out Banks’ Executives Set to Cash In Again”

      cool- love those banksters

    2.  Cohen Says:

      Trickle down, it’s in the name. Rich people taking a piss on poorer people

    [Sep 1, 2009] Is Goldman Sachs Trustworthy-

    The Big Picture

    Should hedge funds be setting their Outlook to auto-delete anything from research department?

    1. The question isn’t whether Goldman Sachs is Taibbi’sgreat vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.

      It is much more simple than that — the more relevant question is “Can Goldman Sachs be trusted by their own clients ?”

    2. leftback Says:

      Q: How do you know when a sell-side analyst is lying?
      A: Whenever his mouth is moving.

    3. Mannwich Says:

      It doesn’t matter when our royals are wrong. They still declare “victory” and move onto the next scam. The Tyranny of the Incompetent lives on.

    4. mcHAPPY Says:

      As the wise president George W. Bush once said:

      “There’s an old saying in Tennessee — I know it’s in Texas, probably in Tennessee — that says, fool me once, shame on — shame on you. Fool me — you can’t get fooled again.”

      I think we can all agree with this sage advice.

    5. I-Man Says:

      “I love the smell of napalm in the morning.”

    6. Marcus Aurelius Says:

      “market is down on good news.”

      Reminds me of an old joke:

      Doc: I’ve got some good news and some bad news, which would you like to hear first?

      Patient: I’d like the good news first.

      Doc: The good news is that we amputated the wrong leg. The bad news is that the other one is getting better.

    7. cvienne Says:


      “The “market” is merely a reflection of the fears, hopes, greed, and intelligence or lack thereof of its participants.”


      Well, as this thread suggests (a thought that is MIRRORED by just about every deep thinking blog in the financial community)… The MARKET is controlled by the USG, the Fed, & GS at the moment…

      Suggesting they are…

      1. Fearful
      2. Hopeful
      3. Greedy
      4. Intelligent (or lack thereof)

    8. Bruce N Tennessee Says:

      Caught up…

      If you are a 17 year old pizza delivery boy who is day trading in AIG…how do you take a 17% hit in one day??

      …just wondering…

    9. leftback Says:

      “i think the Fed/Treasury were so desperate that they could care less if people could connect the dots”

      Correct. Tiny Tim sent Blanky and Jamie some money and told them to “get this mo-fo market going North so I can dump my POS house in Westchester and get out from under this crushing mortgage”. The man can dream, right?

    10. leftback Says:

      Well, well, that was interesting, wasn’t it? We have had a splendid week already at Schadenfreude Asset Mgmt.




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