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Clowns to the left, Jokers to the right.
Here's the newest edition of Stock World Weekly: Clowns to the left, Jokers to the right.
Excerpt:
Our bearish outlook heading into this week proved accurate as U.S. equities traded sharply lower. We caught a glimpse of “No Mo POMO” in action. Not surprisingly, without POMO money from the Federal Reserve propping up stocks, the market behaved poorly. As Lee Adler of the Wall Street Examiner warned last week, “Normally, even with QE [quantitative easing], we’d expect some pressure to show up either in the stock or bond markets around such a large settlement. It should be a lot more ‘interesting’ without QE. This will be the first real test of the market without it since last August.” (Stock World Weekly, July 10, p.11)
Europe is facing its own challenges. The European Debt Crisis of the Twenty-first Century, “The Black Debt,” continued spreading across Europe like the plague. (Originating in China, the Black Death swept through Europe from 1348 to 1350, killing 30% to 60% of the population.) Our modern era’s fiscal contagion may be less lethal, but it still threatens to tear apart the economic fabric of the Eurozone by unraveling a complex arrangement of debt owed between member nations and eroding confidence in the continued viability of the Euro as a currency. The magnitude of the collateral damage to other countries is not known, but given the black box nature of the derivatives market, it is likely substantial. (See e.g. Derivatives Cloud the Possible Fallout From a Greek Default)
[...]
As the clock ticks down to the impending August 2 deadline for lifting the debt ceiling, negotiations between the White House and Capitol Hill are growing increasingly tense. Lawmakers and the President attempt to arrive at a compromise that will inevitably satisfy no one. President Obama, pushing for a combination of spending cuts and tax increases, reached out to the American public during his weekly radio and Internet address, declaring, “We have to ask everyone to play their part because we are all part of the same country. We are all in this together.” (Congress seeks debt solution, Obama goes to public)
Obama has embraced some measures that members of his own party deeply oppose, including proposed reforms to Medicare, while the Republican opposition has taken a hard line against any tax increases. Portraying the crisis as being a result of Washington’s political culture, Republican Senator Orrin Hatch opined, “Washington has consistently demonstrated that it cannot control its urge to spend.” (Debt limit crisis: what’s happening today) Will Hutton at the Guardian writes, “For months, Republicans have used their new majority in the House of Representatives to block any move to lift the artificial cap on the amount the US government can borrow. If by this Friday they still refuse – insisting on up to $4 trillion of spending cuts, excluding defense, and no tax increases as the price of their support – then the US will be unable to service its public debts. The biggest economy on Earth will default...
“But the Democrats cannot agree to the Republicans' absolutist demands, in part because the arithmetic of deficit reduction does not work without tax increases and cuts in defense spending, in part because they passionately believe that with taxes the lowest for 50 years, the US's rich should share in the pain and in part because in any human exchange there is an element of horse-trading.” (What hope is there for us if America is driven to the brink of meltdown?)
Financial economist and historian Dr. Michael Hudson was recently interviewed by Bonnie Faulkner on Guns N Butter. When Ms. Faulkner asked his opinion of where the U.S. economy is headed, Mr. Hudson replied,
“The economy’s going under because Wall Street and investors realize that it’s a done deal. That Mr. Obama is going to succeed in pushing the economy much further into a depression. We need the depression in order to cut living standards and labor by 30 percent. We need a depression in order just to lower the wages of America and to have an excuse – of course, a depression is going to make the budget deficit even larger and the solution to the depression has already been written up, just like the invasion of Iraq was all written up before 9/11, the solution is going to be that the government is going to sell off its land, whatever is in the public domain.
“The American government is going to look just like Greece and just like Ireland. They’re going to be told, ‘The states can’t pay, there’s no federal revenue to share with Minnesota or Wisconsin or the city of Chicago. They’re going to have to sell off their roads, sell off their streets, sell off their infrastructure, sell off their public utilities, sell off their business. The government will sell whatever it has, the Postal Service, to essentially buyers who will now borrow the money from the banks making a huge new market for banks and investment bankers, in privatizing and cutting up what used to be the public domain and turning it over to the wealthiest 10 percent of the economy. So people realize yes, the class war’s back in business. We’re going into a depression. We’ll buy back all these stocks after they go but meanwhile, the game’s over. Let’s grab what we can and just bail out. And that’s what’s happening now.”
Ms. Faulkner: “What is your assessment over the current debate in Washington concerning the raising of the debt ceiling? This debate seems to be taking place between the Obama administration and the Republicans without much input from Democrats.”
Mr. Hudson: “It’s a good cop-bad cop deal, a charade that they’re both playing. The Republicans are playing the role of the bad cop, saying, ‘You have to not raise taxes on anybody, no progressive income tax at all, no closing of the tax loopholes, not even a prosecution for income tax fraud. And by the way, we can get a lot of money if we just give a tax holiday to all of the companies and the individuals that have been keeping their money offshore. Let’s just free wealthy people from taxes altogether and that will help recovery.’ So they’re being sort of the bad cop so Obama can pretend to be the good cop and say, ‘Hey, boys, let me at least do something. You know, I’m willing to cut back Social Security, I’m willing to take over really what was a George Bush program, but you have to let me get a little bit of revenue somewhere.’ And at the very end the Republicans will say, ‘Oh, okay, you can throw us into the briar patch.’, and they’ll give something and they’ll essentially get their program and Obama will have sold out his constituency.”
Ms. Faulkner: Would a U.S. default send interests rate soaring and if so, what would be the economic effect?
Mr. Hudson: “An interest rate wouldn’t matter if you default. I mean, if you tell me I can write you an IOU but you’re not going to collect, I’ll give you 20 percent. What does it matter if you default? No, it wouldn’t send interest rates soaring at all. It wouldn’t have any effect at all. This is all a just pretend argument to create the crisis to give Mr. Obama the opportunity to do what politicians do – to sell out his constituency to his campaign contributors on Wall Street. He’s going to go down as a Herbert Hoover, or rather a Warren Harding probably. He’s going to go down as the man who brought on the depression that the Republicans never could have gotten away with. Only a Democrat posing as a left-winger could support the anti-labor, anti-wage, pro-Wall Street policies that his advisors have been pressing. And there again, that came out in the New York Times interview with Sheila Bair.”
Ms. Faulkner: I see. So this is a charade put on for public consumption, the business of a possible debt default.
Mr. Hudson: “It is to create the illusion of a crisis. No politician or Wall Street really likes a crisis but what they do like is the illusion of a crisis to create a pretense for introducing a solution to the crisis that actually makes fortunes for them all. And the way in which Obama resolves the non-crisis of the budget limit is going to make fortunes for Wall Street – and impoverish the population for the next decade.”
Ms. Faulkner: So this is a way of getting away with all of this?
“Yes.”
(Read full interview here: Wall Street’s Euthanasia of Industry)
In spite of all the tension, drama and political posturing on Capitol Hill, we currently believe that some kind of a deal will be worked out prior to August 2, and that it is highly unlikely that the U.S. will actually default on its debt obligations. We remain moderately bullish on stocks for the long term, but bearish in the near term. Consequently, we are more likely to look for bearish trade ideas than bullish trade ideas early next week.
There's a video from the movie Reservior Dogs that goes with the title, thanks to Rob for pointing it out. (Embedding disabled, but click here.)
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No credit for the great one hitter " Steeler's Wheel" !!!!! Stuck in the Middle , who placed the clowns and jokers as such .
And cause no one posted - jeez -
http://www.youtube.com/watch?v=OMAIsqvTh7g
Yes, great song from the early 70's, WAY before Quentin T.
The clowns on the left and the jokers on the right will have their circus, even if the kids cry and mom and dad leave broke.
Peanuts! Popcorn! Cotton Candy!
My bet is gold hits $1,650 real soon.,.....oil responds to the weaker dollar soaing toward $150 as GS predicted......and the NYSE and Shanghai market decline sharply....the China RE market is getting so outrageous...it remeinds me of those crazy folks waitin gin line outside Las vegas condos waiting to pay $800,000 for a 1,200 sf condo....now worth less then $150k.....crazy stuff.....crazy.
What did happen. I grew up close to the border and will never forget School House Rock. America in those days was optimistic and into educating a new workforce ..... http://www.youtube.com/watch?v=FWYmEICNgOQ . Trying to make sense of it all - north american failure or global one?
North American, but global as a consequence of consumerism and pursuing a laxity of morals and ethics and the descent into narcissism.
"Only a Democrat posing as a left-winger could support the anti-labor, anti-wage, pro-Wall Street policies that his advisors have been pressing".
If by Wall Street he means the banks, OK -- but with Trumka visiting the WH 60 times or so and B.O. selling out GM bondholders, and railing against Boeing for a factory in a right-to-work state, you can hardly call him anti-union.
"And the way in which Obama resolves the non-crisis of the budget limit is going to make fortunes for Wall Street – and impoverish the population for the next decade."
There the same old hegelian dialectics ....
The cartoon is by "CAM" from the Ottawa Citizen. I think he started in Regina and his stuff has been the funniest political cartoons ever. He illustrated a book called "Not Politically Correct " back in the 90's.
What Americans must realize is the European Central Bank and IMF's wholesale liquidation of Greece's public assets and their imposition of Austerity programs is the same as our domestic Banksters who are circling heavily indebted states and municipalities nationwide. What's happening in Greece is what's happening in Wisconsin. We are Greece!
See: AMERICA: A "De-constructed Third World Nation-State" - International Banking Cartel Vs. The People
When a small group of elites control the apparatus of government and commerce the people get the shaft.
Our elected officials are morally bankrupt and nothing more than Minions with benefits; who are chained to a political fundraising grindstone with no hope for independent action. Borrowing $1.5 Trillion + a year to continue down the same path is the definition of insanity. And though our Freedoms are under siege and way of life threatened, the power rests with the consent of the people.
The face of America is YOU. Our country's laws, our freedoms, our humanity rests in the hands of each of us. Our imperative for building a more just and humane world demands we do not exchange a walk on part in the war for a lead role in a cage.It is our birthright that each American physically stand against Tyranny and together "We The People" can secure a government of the people, by the people and for the people!
See: THE FOUNDING FATHERS: MYTH ASIDE, THIS IS A VISION GONE WRONG! - Part Two
A case for being thoughtful (Part I)
Thoughtfulness is such a wonderful trait. It is one of the things that separates us from most of the other creatures. One may argue that some creatures have the ability of cold-calculated thought or that other creatures have the same hot flashes of passion that we do. But it is rare to see the warmth of thought-tempered passion that thoughtfulness represents. It is even rare among people.
I believe that the reason for its' rarity is that to be thoughtful, one must also love. It is far easier to love at the micro level than at the macro one. That is why it is easier to be thoughtful for your spouse, children, family and maybe even your community or small business. It is all but non-existent to see true thoughtfulness for a city, state, nation or humanity.
Invariably, at the macro level a person or group or committee will be biased or overcome by their hot passion or cold thinking. You can usually tell which way a person leans by asking them to describe the “Declaration of Independence” or our “Founding Fathers”.
I feel that both examples are profound cases of thoughtfulness. These architects of a nation made their thoughtfulness abundantly clear in a single statement; “..they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”
At first glance, you can feel the hot-blooded passion in every word. But unlike today where most have trouble saying what they mean or meaning what they say, every word in the above phrase packs a powerful, “thoughtful” meaning. Put aside your politics, pick up a dictionary and decode what
it really means to have the “RIGHT” to “Life, Liberty and the pursuit of Happiness.” I dare you.
The Oxford dictionary defines right as a moral or legal entitlement to have or do something. You probably already see where I am going with this. But things are not what they appear to be. Yes, I believe that all people are entitled to the basic level of nutrition, medical care, shelter, and clean air/water necessary to “LIFE”. I also believe all people are entitled to free access to education and information that will allow them to pursue whatever level of “HAPPINESS” they are capable of achieving through hard work, whatever innate talent they possess, and whatever luck the “Creator” or “Universe” bestows on them. Unfortunately, business does not work that way.
You have probably heard the expression, “It's not personal, it's just business.” What a perfect summation of passion and cold thought. Profit and Loss, Investing, Bankruptcy, Foreclosure...etc are all cold, cold, passionless concepts. An investor wants to make money. Investors want the value of their investment to rise forever and will reward the success of the CEO with a never-ending rise in wealth.
This is just one example of how being exceptional alters the “Bell Curve of distribution”.
We may all be unique as individuals but we cannot all be exceptional or “special”. Life does not work that way no matter how much you try to make it so. All the positive affirmations to infinity will NOT make you an “American Idol”. Even most of the winners of the show end up as failures as an “American Idol” or their success can be measured in weeks or months at best. Most of us are “average” and sit in the middle of the “Bell Curve”. In school or life being average should put you in the middle of the class(middle-class).
People who are far below-average and those that are truly exceptional reside at the opposite ends of the curve. If pay compensation were left to the true forces of totally free trade then wages would follow a very similar “Bell Curve” to that of the talent pool. However two factors skew the extreme ends of the curve to the point that the entire distribution of wages is corrupted. This corruption of wages creates a secondary effect that concentrates wealth and power in two disparate forces that use their wealth and power to effect changes in government that promote their continuation to the exclusion of everyone else.
What I find interesting is how so many people want a reset. Here is our opportunity. Don't raise the debt ceiling. U.S. default. TBTF banks go belly up. Deflation. People start getting hungry. Some sort of radical change comes to government (ok, maybe I am dreaming). Here is the chance!! Yet Ilene and other leftists are now acting as if the world is coming to an end if the ponzi comes to an end. I am ready for a U.S. default. Are you?
Starve the Beast. Kill it. Now. Actually, the McConnell deal results in NO real spending cuts and another 3 trillion in debt, so all this Socialist angst from Hudson, Keiser, the Guardian et all is a crock. DC will kick the can, one...last...time. Next time, almost certainly during the lead-up to the 2012 election, the foot will break. Then, Kiss Tomorrow Goodbye.
Starve the Beast. Kill it. Now. Actually, the McConnell deal results in NO real spending cuts and another 3 trillion in debt, so all this Socialist angst from Hudson, Keiser, the Guardian et all is a crock. DC will kick the can, one...last...time. Next time, almost certainly during the lead-up to the 2012 election, the foot will break. Then, Kiss Tomorrow Goodbye.
You are EXACTLY CORRECT! The McConnell deal ONLY cuts 1.3-4 TRILLION over the next decade!(Hell, .Gov is adding 2-3-4 Trillion every year) IS THIS A FUCKING JOKE? The KICKER with this piece of shit deal is, The Obummer gets to AUTOMATICALLY RAISE THE DEBT CEILING UNTIL DECEMBER 2012! NO DEBATE, NO ARGRUMENT, NO ANYTHING! There's going to be blood in the streets if this clusterfucking scam gets passed!!
Are you ready?
You must be young, male, and have no family or children that you care about.
Be careful what you ask for. The world is a crowded place, and the system in place is meant to provide for everybodys welfare. It may be having some difficulty at the present moment, but is immensely better than nothing.
Armageddon is a fantasy, you know.
gh
Sellstop -interesting name for someone witht their head in the sand. You are being sarcastic; right?
As far as I am aware most of the Euro bank & sovergin debt is internal - so why can't they print euros ?
This will drive up the Euro price of oil but then again there too many fucking cars on European roads - this will drive energy conservation.
"Clowns to the left, Jokers to the right"
Classic headline, spot on and funny too, chuckled for ages ;))
There was more meaning to the title than I knew. Just added a link to the video of a scene in Reservior Dogs: click here
FUCK OBUMMER !!!!
"Our bearish outlook heading into this week proved accurate as U.S. equities traded sharply lower".
Do me a favour.
From the 27th of June to the 8th of July the Dow moved up from the mid 11,900s to the 12,7000s. It's now just below 12,500. The S&P moved from 1267-ish to high 1350s, now at 1318-ish.
US equities have NOT moved sharply lower. Yes, they are lower than a week ago but look at the ramp up at the beginning of July!
DavidC
but (s)he said "heading into this week". so (s)he's right.
what the action looks like from february is a broad, possibly head and shoulders, topping pattern. of course it could break out to new highs (my portfolio will hate it) and make whatever pattern irrelevant. fundamentals don't look good but so what, right? as always, we shall see.
The idea that a default would be good for the environment is pathetically naive. Any serious financial crisis will an excuse to ignore or roll back environmental laws and regulations. We might use a little less oil and coal, but we'll have a lot more pollution of all kinds. Think Albania.
Doubtful. Less environmental laws, less regulations would mean more consumption.
Slower activity is the main path to less consumption.
want to stimulate the economy? raise interest rates a half point, and promise to continue doing so. Why would that help? Businesses would have to pay to borrow the money they get for free right now, and they use to buyback shares. SInce they would have to pay the interest they would put that money to work? Why? because in six months we're going to raise rate again! If you borrow now your debt will be lessened in six month.
Inflation targets, what a liar Bernanke is. If he wanted to refinflate the markets he would raise rates!! The difficulty raising rates is that it reduces asset values marginally, that is the value of a house remains constant, but mortgage rates go up, therefore the asset value of the home must fall to balance the equation. Corporations who are sitting on cash might find that desirable, and wages might go higher, but marginally, since the value of the finished product is actually falling. That is wages would go up less quickly than interest rates, which is the way the worker always gets screwed, but the way he is getting screwed now is no jobs at all, or wage reductions.
and of course the deficit would shrink. but here's what Obama has in mind, massive privatization of government services. The reason are hidden in Doug Noland weekly creditbulletin
The answer to the problem is this, if public debt does not respond to monetary policy as well as private debt, the only thing to do is privatize the governments debt, and most of the work government does, in other words toll roads, private cops, private firemen, private schools. the complete takeover of America by corporate interests. and the man for this job is Barack Hussein Obama, but he must hurry, because the Democratic base is beginning to smell something rotten, and will diselect him, which is why he is so cozy withWall Street. They love him.....
the debt ceiling is a charade even as blue dogs like Pelosi puke at Obamas deal making with the GOP. Privatize SSN and Medicare, would he do thatZ? The guy who sold you mandatory Health Insurance as reform?? hahaha
This is the betrayal of Shakesperean dimensions.Read this and see if the light doesn't start to come on.
http://www.prudentbear.com/index.php/creditbubblebulletinview?art_id=10554
Great article, the G! It's a keeper. Much of what he says is stuff we knew already, but his overall perspective is what gives it force.
Note: You have to scroll down to the bottom past the data to read the article.
You draw the obvious conclusion that the next step is privatisation of public assets. But all of this is not new. People need to realize that this whole process, which could best be termed "Friedmanization" has been used by us against our swarthy neighbors in the southern hemisphere for decades. The only thing new is that it is now being applied to us, as if we too are brown-skinned! What are they thinking? Just as what happened in Chile, Argentia, Bolivia, etc did not end the world and bring on Armagedon, niether will this lowering of the US standard of living. It will bring a lot of grief and hardship and shock to the the people. See Naomi Klein's book "Disaster Captilalism--the Shock Doctrine". We already had a trial run of that here in the States with Katrina. If you want an example just look at what they did to New Orleans. Bush was right. It was a heck of a job. Now that I think about it, the reason the response was so slow and inadequate was because they were using this serendipitous disaster that happily dropped into their laps as a test case of Friedmanization in the US.
Same goes for taxes.
Use it or lose it!
(a local jippo logger had that on the sides of his logging trucks a couple decades ago)
gh
i havent head the term jippo in a long time. never quite understood what it meant, except independent.
The Fascists behind the throne of America have a reliable Ace up their sleeves:
http://maxkeiser.com/2011/07/17/there-is-a-warning-order-inside-the-pentagon-to-prepare-for-war
like The Ace of "Spades" ?........
That image is great.
Washington's solution: "We need a bigger truck."
That image is a insult to Trucking.
However the 1st amendment protects the freedom of speech so... it must be true. Get the bigger truck.
Am reminded of the movie "Duel"
+1 on Duel
Wrong take on all this. What is happening:
'Conservation by other means'.
What happens w/ money or fiscal policy is irrelevant, without cheap fuel all the so-called 'assets' Professor Hudson has up for sale to the capitalists are worthless.
There is no cheap fuel. If some dumbass wants to buy a freeway or an airport at what ever price they are buying bankruptcy.
We're still having an energy crisis, not a 'cost of money' or credit crisis. The capitalists are busy playing the wrong poker hand.
What they will get instead of 'good assets, cheap' will be debt deflation and margin calls. With the Treasury 'closed for business' there won't be as much moral hazard. With sufficient deleveraging the Fed will be helpless (as they almost are now @ the end of QE 2).
Bad for business = good for the environment. Default tomorrow, please!
Yes, the theater has been and continues to be Reps ask for the unthinkable, Dems fight and lose. It is bailouts for the bankers, corporate tax cuts, plenty of military spending and austerity for the people worldwide.
been watching this from the start. strange thing before Obama was elected this whole thing is exactly following a bilderberg conspiracy video. exactly waht was predicated and said would happen in the video. weird to me it hasn't gone viral at all.
agreed, I'm amazed that hardly anyone in the country realize the scam thats being played.
Don't know whether to laught or cry, but this was a very good posting.
I love the idea that Idi Obama has a constituency. CIA or NSA?