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David Stockman: "It Will Take A Major Dislocation In The Bond Market" To Wake Up America

Tyler Durden's picture




 

It is no secret that David Stockman, former budget director in the Reagan administration, has long been a vocal opponent of the crash course America has found itself on courtesy of record debt. In this Bloomberg interview, he presents his latest take on U.S. fiscal policy and the outlook for agreement between Congress and the Obama administration on a deficit and spending reduction plan. Suffice to say, he is not a fan of either the republican or democrat plan, and is convinced both sides are playing nothing less than class warfare to promote their flawed programs. "I think the people would respond if they knew the fact, and if they'd been were told the truth, but they haven't been, they've been lied to for the last 10-20 years by both sides saying that we can live beyond our means, new entitlements, new tax cuts constantly, tax stimulus for everything that we could imagine, and as a result of that the country doesn't know that sacrifice is going to be required, and that everyone is going to have to give up something." On the recent "spending cut" much touted by Washington: "even this noisy $39 billion package cutback, that was all flimflam and swindle: there wasn't $39 billion in that, maybe there was $5 billion at best, and had anybody in the business community reported that they had $39 billion in a package that was this fraudulent they would have every prosecutor in the country and the SEC on their tail right now." And on the much endorsed by Zero Hedge Tobin tax: "We out to put a major tax on transactions on Wall Street, because Wall Street is turning into a high speed casino. We need to start thinking about new revenue sources and that is one of them." So what will finally awake America? "I think it's going to take a major dislocation in the bond market, a real conflaguration on the part of the people who have to buy this debt, before the country wakes up." Of course, if the Fed is able to sell virtually unlimited Long-Term Treasury puts, the synthetic push on sellers will never abate and the Fed can manipulate the curve virtually in perpetuity, or until such time as those buying Treasury vol protection, ironically, decide it makes no more sense to hedge against a curve yield surge.

 

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Sun, 05/08/2011 - 13:07 | 1253094 Hephasteus
Hephasteus's picture

It's all very very simple. Hand out a few crumbs of wealth. Keep most of it for yourself. Then when it becomes clear that it's not going to work. Ask for permission from the crumbtards to do some hurting and stealing for the good of everybody.

Sun, 05/08/2011 - 13:14 | 1253112 Scottj88
Scottj88's picture

The new policy post-1971 was to expand monetary supply to spur growth.  Thus, from 1971-2008 America has experienced the “wealth affect,” as the strategy was to have economic growth to outpace the increasing monetary supply. Well, the “wealth affect” seems to now be over, as the price of gold since this new-found policy tells the story.

The end of the Federal Reserve Note is near, in my opinion within the next several years.

http://thehardrightedge.com/endofdollar/

Sun, 05/08/2011 - 13:35 | 1253162 Sudden Debt
Sudden Debt's picture

Never gonna happen. The opposition against THE fed is just to weak.

Sun, 05/08/2011 - 14:27 | 1253302 Michael Victory
Michael Victory's picture

Freedom's Latest "The Bigger Picture". Comments welcome.

 

~MV

Sun, 05/08/2011 - 16:38 | 1253644 Verstehen
Verstehen's picture

Not bad. Combine that with tanking consumer spending probably down to 65% over the next years. Tax receipts will fall further. Meanwhile paranoid bureaucracy is rising. It must shrink but does the opposite. Population is rising faster than jobs growth because consumer spending is falling which means growing gov spending to feed the population without jobs. The savings that are needed (to invest) are inflated away. The economy is overheating and collapsing at the same time. Inflationary Depression for 60% of the population is now inevitable. Watch socio-economics defeating macro-economics in slow motion. The long-term trend is even worse. The white population that is dying off will be replaced by low paid low-IQ uneducated Latinos. Sounds like an accident waiting to happen. The American Empire is already history (and its poodle Britain too). All the wars were useless in the end. Everyone with a brain cell left can see where the American experiment is heading. DECLINE. The tipping point was in the last decade. Never wake the sleeping giant China. Too late. The historical knowledge of American leaders is appalling. Throughout history the hegemon always favored liberal trade which in the end led to his downfall. Europe and China are part of a super-continent. How long can an isle force its will onto an super-continent? You will pay dearly.

Sun, 05/08/2011 - 14:42 | 1253337 JW n FL
JW n FL's picture

Tax Breaks.. or lets call it what it is.. $0 Fucking Taxes for the Top 1%(ish)..

 

Poor need to tighten thier belts, so Austerity Measures...

 

and the Middle will have to tighten thier belts becuase the Poor have already been robbed blind, given that the Poor has NO! LOBBY!

 

so the facts are.. No taxes for those with a Billion Dollar Lobby.

Poor, gets fucked as much as possible.

Middle, has to get fucked becuase the Poor has Nothing left to give.

and the worst.. is Absolute Return Fund types getting printed out of thier entitled tax bracket!

 

So, unless you are a Corporation! or Government Paid by a Corporation (thru the lobby of course, no bribes.. just lobby dollars) You! ALL!! of YOU(s)!!! are FUCKED!!!!

 

Senate Republicans blocked a Democratic Bill to End tax Breaks for Moving U.S. Jobs Offshore! http://goo.gl/6qhnK 

 


Republican Senate HIDEs! HUGE! Contribution Dollars from Government “Military” Contractors using “Free Speech” http://goo.gl/35V9l

 

Republican-controlled committee voted for a 18-month delay of regulations intended to reduce risk in OTC Derivatives. http://goo.gl/4IYGP

Much corporate political spending stays hidden http://www.latimes.com/news/nationworld/nation/la-na-money-politics-survey-20110424,0,1545345,full.story

 

http://goo.gl/cgg4O General Electric $14.2 Billion in Profits, Pays $0 in U.S. Taxes

$39M Dollar Lobby in 2010 $14B in Profits =’s NO TAXES PAID! http://goo.gl/rZLDY

$10 billion sale of F.D.I.C.-backed debt http://dealbook.nytimes.com/2009/01/06/ge-capital-begins-10-billion-debt-sale/

 

O ya! Social Security with its $2.5 Trillion Dollar in Slush Funds! LMFAO! GONE BITCHEZ!!! LONGGGGGGGGGGGGGGG GONE!!!

 

Social Security - Robbing The Middle Class http://goo.gl/m8QMq

 

Corporations OWN! America! Corporations OWN! Government!! “We the People” are OWNED!!! “Fall of the Republic” HQ Full Length Movie http://goo.gl/EwUsC

 

 

Sun, 05/08/2011 - 14:52 | 1253362 sun tzu
sun tzu's picture

So who pays the $2.2 trillion in federal taxes each year? It must be the poor because the rich aren't paying any taxes at all. The people on welfare are paying 99% of the taxes. Yeah, that's it.

Poor bitchez!!!

Sun, 05/08/2011 - 16:31 | 1253630 blunderdog
blunderdog's picture

The "middle class" pays all the taxes.

The rich pay a bit, sure, but there just aren't enough of them to matter.  The poor pay virtually nothing, because that's all they've got.

That leaves everyone between about the 35th and 99.9th percentile to pay all the taxes. 

They're all middle class.  Annual incomes between $30K and $1million or so.

Sun, 05/08/2011 - 17:05 | 1253725 Amish Hacker
Amish Hacker's picture

Beware the MSM claim that "the rich pay more income taxes than the poor." It's a statement deliberately intended to confuse "taxes" with "income taxes." Even those who earn too little to pay income tax pay plenty in FICA taxes on their income, not to mention sales taxes, SDI, etc. And many of the rich get most of their income from capital gains (taxed at just 15%), not earned income.

 

Sun, 05/08/2011 - 18:02 | 1253866 blunderdog
blunderdog's picture

I know all about it.  I'm actually fuckin' poor.

But despite the fact that the poor pay taxes, they still pay relatively *little* because they just don't have anything.  I pay sales tax on about 50% of my income, because that's everything left from my paycheck after rent, and I'm paying the ~5% payroll taxes, but comparing my current tax contribution to that of a decade ago when I was in the top quartile of income reveals that it would take about 8 of me "now" to pay the same that 1 of me paid back then, just looking at total amount of dollars given to the taxman.

Mon, 05/09/2011 - 07:25 | 1254867 Stormtower
Stormtower's picture

Maybe not.............

http://www.suethefed.com/

 

Sun, 05/08/2011 - 13:43 | 1253178 DeadFred
DeadFred's picture

So if the guy is right as I suspect he is, how do we best do the altuistic thing and get the maximum exploitation of the meltdown for personal gain?  I've been looking for several weeks with this scenario in mind and haven't found anything better than inverse bond funds that would give a rather pathetic 50-100% rise in a meltdown situation.  Come on we should be able to milk a true conflag[u]ration for more than that!  If the Fed has puts on the 30 years they may not be the biggest movers.  The mid range bonds that have been affected most by QE2 might be good candidates but the ETFs I've looked at are scary because they have so little liquidity.  My research has been pretty much limited to ETFs because of my account limitations but what are the best tactics here? I hate sounding like a ghoul but this ship is headed for the rocks and I'm not at the helm.  If I/we make some profit from the inevitable crash we have better options to help the life-saving after the fact. But how??

Sun, 05/08/2011 - 14:11 | 1253255 blunderdog
blunderdog's picture

how do we best do the altuistic thing and get the maximum exploitation of the meltdown for personal gain?

Become a pimp who treats your hos well and implement a profit-sharing plan.  Everybody wins.

Sun, 05/08/2011 - 14:57 | 1253387 The Profit Prophet
The Profit Prophet's picture

Your post smacks of an immoral individual filled with hubrous and driven by greed....the very qualities that have led us to the financial abyss. I was hoping for some indication of sarcasm, but you provided far too much detail in the level of analysis you have undertaken.  If you do indeed "hate sounding like a ghoul", then my best advice for you is to "stop thinking like a ghoul".  You may not be "at the helm", but I have no doubt (based on your post) that had you been "at the helm", you would have steered us in a similar direction.

Seek the true nature of charity and aspire to embrace it...it may be your only hope. That and keep buying physical....

T.E.I.N. everyone!

Mon, 05/09/2011 - 09:33 | 1253635 DeadFred
DeadFred's picture

deleted

Sun, 05/08/2011 - 19:25 | 1254047 401DK
401DK's picture

TBT, but timing before the collapse is the tricky bit.

Sun, 05/08/2011 - 13:17 | 1253126 nah
nah's picture

HAHAHAHAHAAAAAAAA thats hella funny haypushups

Sun, 05/08/2011 - 13:42 | 1253177 Oh regional Indian
Oh regional Indian's picture

Crumbtards. Instant  classic. Adopted. Much better than Sheeple.

Crumbtard.

ORI

Sun, 05/08/2011 - 13:45 | 1253195 myshadow
myshadow's picture

+1 on crumbtard.  Brilliantly pithy.

Sun, 05/08/2011 - 14:34 | 1253325 WmMcK
WmMcK's picture

Sheep may be shepherded.  Ignorance is not stupidity.

Rebuilding with only warriors will be slower and brutal.

Those that refuse to listen will suffer but it's not ultimately efficient to unnecessarily condemn/sacrifice. Fight club is OK, but we'll do better to cooperate when we can.

Survival should not be enough for humanity.

"Crumbtards" does make me hungry, though.

 

Sun, 05/08/2011 - 15:42 | 1253530 yabyum
yabyum's picture

Crumbtard, A new ZH classic. I have met the enemy and it is us.

Sun, 05/08/2011 - 16:28 | 1253624 Ruffcut
Ruffcut's picture

"Crumbtards" does make me hungry, though."

Crumbtards, never touch them. They have too much high fructose corn syrup in them.

Ignorance is often a choice. Stupidity is a gift that only gives poor results.

Sun, 05/08/2011 - 20:05 | 1254130 WmMcK
WmMcK's picture

Oh, I was thinking of crumb tarts (like crumb cake?)

Avoid the hf corn syrup at all costs.

Ignorance is often a choice but not always of the ignorant.

Too many are proud of it, though.

 

Sun, 05/08/2011 - 13:40 | 1253180 oh_bama
oh_bama's picture

This guy is WAY TOO NEGATIVE!!

"Wall Street is truned into a high speed casino!"

Is he in his right mind? What CASINO? SILVER MOVED A BIT but other markets are peaceful and VIX

HAS NEVER BEEN LOWER IN HUMAN HISTORY!!

WHAT DISLOCATION? BEN IS NOT GOING TO SIT!

Who is this guy? What a JOKE!!

 

 

 

Sun, 05/08/2011 - 14:29 | 1253299 takinthehighway
takinthehighway's picture

Appropriate avatar for satire.

Sun, 05/08/2011 - 13:10 | 1253102 Alcoholic Nativ...
Alcoholic Native American's picture

Bondzilla doesn't exist.  It's all a matter of national security at this point.

Sun, 05/08/2011 - 13:26 | 1253145 narnia
narnia's picture

We woke up Kingflation Kong to fight Bondzilla.  In the end, they will not fight each other, they will be allies.

Sun, 05/08/2011 - 13:08 | 1253104 Ahmeexnal
Ahmeexnal's picture

ASSEMBLE THE ARMIES!!!!!!!

Sun, 05/08/2011 - 13:08 | 1253105 topcallingtroll
topcallingtroll's picture

As long as the music keeps playing we have to keep dancing. We dont have many other choices, at least not if you have kids to edumucate.

After that I drop out of the rat race.

Sun, 05/08/2011 - 13:35 | 1253161 WmMcK
WmMcK's picture

Please dance as close to the exit as possible to avoid the rush.

Teach your kids to invest, not to be a employee/slave.

Sun, 05/08/2011 - 13:43 | 1253190 topcallingtroll
topcallingtroll's picture

I am.

I do.

However being a small business owner can feel very slave-like too.

The cynical in me thinks that government jobs will always have the best working conditions. As caucasian males my boys will be hired quickly even with all the reverse discrimination because they are learning spanish. They will be the token white males hired to maintain diversity as long as they have a politically correct skill.

Sun, 05/08/2011 - 14:20 | 1253277 WmMcK
WmMcK's picture

Best working conditions until a crash, maybe.

We all need an exit plan when Uncle Sam becomes (even more) unreliable.

Espanol es muy bien.  Rusky khorosho.

Mandarin y otras idiomas, tambien.

Buena suerta.

Sun, 05/08/2011 - 14:54 | 1253373 sun tzu
sun tzu's picture

Their Spanish might be better used in South America. Conditions will be better there

Sun, 05/08/2011 - 23:35 | 1254553 Votewithabullet
Votewithabullet's picture

FAG

Sun, 05/08/2011 - 14:52 | 1253374 sun tzu
sun tzu's picture

Their Spanish might be better used in South America. Conditions will be better there

Sun, 05/08/2011 - 21:13 | 1254275 WmMcK
WmMcK's picture

Maybe SA will even be able to mine some more Ag without the governments "nationalizing" it.  A few of the countries there make my potential relocation list.

Sun, 05/08/2011 - 23:38 | 1254557 Votewithabullet
Votewithabullet's picture

MARICO

Sun, 05/08/2011 - 13:14 | 1253113 jkruffin
jkruffin's picture

The day of reckoning is approaching!!!!! It will come within days..........look at that unsustainable deficit.  OUCH!

Sun, 05/08/2011 - 16:35 | 1253637 Ruffcut
Ruffcut's picture

I reckon the day is already here. The deficit is an illusion that can exist til the counterparties say it can't.

Sun, 05/08/2011 - 18:57 | 1253988 downwiththebanks
downwiththebanks's picture

Bullshit:  Jubilee on the debt, with a nice middle-finger to the banker-gangsters.

The whole thing is a fractional reserve scam.

Sun, 05/08/2011 - 13:15 | 1253116 mynhair
mynhair's picture

What is 'conflaguration'?

Sun, 05/08/2011 - 14:07 | 1253225 cosmictrainwreck
cosmictrainwreck's picture

LOL.... somebody junked you for implied diss of Tyler (probably illyia @ 13:16, who goes on record as "don't care" about typo) ha

Mon, 05/09/2011 - 03:43 | 1254777 ViewfromUnderth...
ViewfromUndertheBridge's picture

he actually said that...kudos to Tyler for the phonetically correct transcript

Sun, 05/08/2011 - 13:29 | 1253120 Segestan
Segestan's picture

Americas elite induced ' Deep sleep' has allowed the third world an even deeper dream. Reality won't just come to America.

Sun, 05/08/2011 - 13:47 | 1253194 Oh regional Indian
Oh regional Indian's picture

Could not agree with you more Segestan. Here in India, deep sleep, eyes wide shut, is in a-bun-dance.

ORI

Sun, 05/08/2011 - 13:16 | 1253122 illyia
illyia's picture

Conflagration.

I do not care if it was misspelled in the quote.

 

Sun, 05/08/2011 - 14:48 | 1253361 Slartebartfast
Slartebartfast's picture

Actually Tyler spelled it correctly, Stockman said, "conflaguration", which is a slang term.  It's an urban morph of conflagration, like using "axe", instead of "ask".  Makes me wonder who briefed Stockman on what to say in the interview.  Eh?

Sun, 05/08/2011 - 23:16 | 1254510 illyia
illyia's picture

Why not conflagurasian?

Sooner or later everyone will be speaking in a language only they, themselves, understand.

It will do wonders for international negotiations... as in: "why don't we axe him?"

Terminator: "Ax who?"

Sun, 05/08/2011 - 13:16 | 1253123 Sudden Debt
Sudden Debt's picture

Flight to safety?
Just buy THE 30 year than!

Safety my ass!

Sun, 05/08/2011 - 13:21 | 1253128 Number 156
Number 156's picture

They know whats up. It keeps them awake at night. But they're already halfway across the Styx, and they've already paid the boatman,  and there's no turning back. All they can do is  lie lie lie, and pretend to be ignorant of the facts, because the day is coming when they will have to answer for it.

Sun, 05/08/2011 - 14:41 | 1253335 newworldorder
newworldorder's picture

Aint that the truth.

Sun, 05/08/2011 - 15:56 | 1253564 Vendetta
Vendetta's picture

Its all lies coming from "the hill" is the sad truth

Sun, 05/08/2011 - 13:20 | 1253135 Kickaha
Kickaha's picture

David Stockman for President - 2012.

Sun, 05/08/2011 - 13:49 | 1253200 Bay of Pigs
Bay of Pigs's picture

I guess you forgot his years in the Reagan Administration? They got the ball rolling on the massive deficits and debt.

He is partly responsible for where we are now. Just another hypocritical bullshitter blaming someone else.

Sun, 05/08/2011 - 14:06 | 1253244 cosmictrainwreck
cosmictrainwreck's picture

there is the possibility, however, that he has repented of his sins & "seen the light"

Sun, 05/08/2011 - 14:22 | 1253281 DeadFred
DeadFred's picture

For decades the Soviet Union, bent on world domination, made paupers of its people in order to build the largest military force in history.  By starting the USA down the path of debt Reagan was able to overcome the Soviet military advantage, seemingly without effort, thus demoralizing the Soviet leadership and leading to the end of the cold war.  The current disintegration of the  US is the inevitable outcome of the Reagan's path but by his and our sacrifice we saved the world from becoming a radioactive wasteland (except for parts of Japan). This way of looking at events feels a lot more noble than thinking we've just been buggered by the Rockefellers and Rothschilds.

Sun, 05/08/2011 - 15:23 | 1253460 Alex Kintner
Alex Kintner's picture

That will be comforting as I roast rats over the campfire tonight.

Sun, 05/08/2011 - 23:00 | 1254479 Mec-sick-o
Mec-sick-o's picture

Yeah, right.

The Berlin wall fell in 1989.  No need for USA to sacrifice anymore.

 

Sun, 05/08/2011 - 14:55 | 1253382 seek
seek's picture

The other David - David Walker - would be far more preferable.

I honestly doubt he'd take the job, though, as he knows how fucked we are.

Sun, 05/08/2011 - 13:27 | 1253141 bob_dabolina
bob_dabolina's picture

Agree 100%

Glad someone got on the telley and said it.

Sun, 05/08/2011 - 14:24 | 1253293 DeadFred
DeadFred's picture

I'm a bit amazed they let it on the telly.

Sun, 05/08/2011 - 14:46 | 1253349 cosmictrainwreck
cosmictrainwreck's picture

machts nichts; fuckers will continue laughing all the way to the bank. just one more ranting "extremist". (PS: no worries about the "public" - they don't want to contemplate this)

Sun, 05/08/2011 - 13:27 | 1253148 Cdad
Cdad's picture

Well said.  Stockman puts his finger on the real problem...the entrenched crony capitalist forces that have their hands deep in the tax payer's pocket.  Until such time as the nation is prepared to confront this truth, currency debasement is the only assured outcome.

As for how it resolves itself positively, only a consumer led recession can force the hands of said crony capitalists entities, the revolution of the closed wallet.  If they cannot be forced out by law or lawmakers, then maybe by a citizenry that refuses to support their industries.

It would be the easiest revolution in the history of the globe.  However, and of course, zombie materialist Americans can barely sit still when a new product release is announced, even when the only new thing is the product color.  And so we trudge on destroying the dollars our sons and daughters will need in order transact...for the titillation of the moment.

Brilliant!  Fluoride for all my friends!

 

Sun, 05/08/2011 - 13:30 | 1253149 velobabe
velobabe's picture

this is a great man! tyler?

Sun, 05/08/2011 - 13:39 | 1253176 Real Estate Geek
Real Estate Geek's picture

I smell a VAT.

Sun, 05/08/2011 - 14:02 | 1253232 CitizenPete
CitizenPete's picture

I smell Government Spirit 

Sun, 05/08/2011 - 13:41 | 1253185 tony bonn
tony bonn's picture

the major dislocation will occur when the interest rate swaps fall apart.....i don't know when that is but when it happens it will make the recent japanese tsunami/earthquake feel like a vibrating comfort matress....but it must happen....cancer cures are never painless....

Sun, 05/08/2011 - 14:32 | 1253316 reload
reload's picture

The total outstanding trades in the interest rate swap and interest rate derivative markets are absolutely huge. However, despite these transactions being `off ballance sheet` items, they are not naked positions. Most are hedged or netted off against another swap, so the nett exposure is far far smaller than the total volume outstanding. Certainly some market participants are running curve mismatches in size, and some will have `bugs` in their risk management and reporting systems which will be exposed by a big/unexpected shift in rates. However I think the biggest risk here is probably from counterparty exposure rather than position mismatches or outright rates exposure. So the swaps are probably a risk in that a counterparty blow up will lead all the TBFT players demanding a handout - or that the FED takes on all their crappy positions. Of course there has been widespread miss selling of swaps and more exotic interest rate derivatives by the usual TBTF suspects - particularly to municipalities and other non federal government entities. The lid seems to be firmly on this at the moment, but it is only a question of time before one of these victims blows up ahving taken some `expert risk managemnt advice` from a wall street sales exec. In terms of the market as a whole this will be a land mine rather than a nuke.  

Sun, 05/08/2011 - 19:03 | 1253995 downwiththebanks
downwiththebanks's picture

Since it's all casino bullshit, tax the turnover for these professional greed heads and worthless paper shufflers who can't work a screwdriver in the real world.

Sun, 05/08/2011 - 13:49 | 1253198 Josh Randall
Josh Randall's picture

Lets get this b!tch down to 0 so we can start from scratch - there are smart enough people to get the system righted, but we can't until it hits everyone in the crotch and nose at the same time

Sun, 05/08/2011 - 14:49 | 1253366 takinthehighway
takinthehighway's picture

A sentiment surely seconded by a majority on here - but things will have to get much worse before they can get better.

Conditions for revolution are much more daunting in 2011 than they were in 1776 or 1861. The PTB have dealt themselves a royal flush while giving us at best a pair of deuces with a trey high. Yes, they cheated, but you daren't draw your pistol against the machine gun pointed at you.

So...you walk away from the game. Seek out others tired of the rigged game and join with them in a quest to establish an honest system. Perhaps it may come to naught - but maybe, just maybe, your efforts may bear fruit. At the very least, you can say that you honestly tried to bring about a solution to the problem and make the world a better place for yourself and those you care about.

 

http://www.southernnationalcongress.org/

Sun, 05/08/2011 - 13:58 | 1253218 jkruffin
jkruffin's picture

Bernanke has built the ultimate bubble in bonds.  The bursting of the bond bubble will destroy America, and it so called wealth effect Bernanke likes to tout. All he can do is hope that he can get out of dodge before it collapses, and I don't think he is going to make it.  We might as well get the treason charges ready, because that is where this one is headed for him. 

Complete and utter collapse in global markets is coming within a matter of days.  I wouldn't even doubt there is a planned attack on them, just like silver and gold paper last week.  I said a month ago the paper trade would kill silver/gold and it has, at least for now. Now, it is time for the paper stock and bond trade to kill themselves. It is about to get very nasty.

Sun, 05/08/2011 - 14:01 | 1253230 IdioTsincracY
IdioTsincracY's picture

Too late, dude!

First you sell the nation Reaganomics, then, when everything is about to go to hell, you start going on tv saying the exact opposite.

what happened to "Deficits do not matter"? What about the 'trickle down' wealth?

I have just two words for you:

F@ck You!!

 

Sun, 05/08/2011 - 14:09 | 1253254 cosmictrainwreck
cosmictrainwreck's picture

I think we should go back and examine every word you said or wrote in the 1980's; are those transcripts available?

Sun, 05/08/2011 - 14:33 | 1253311 Re-Discovery
Re-Discovery's picture

He left Reagan admin early and has always been a bit of a gadfly from that time.  Started as a wunderkind (I think he was Budget Director at 32 or something.)  Give him some capacity to grow.  He was anti-Bush so that says something.

Sun, 05/08/2011 - 16:49 | 1253676 blunderdog
blunderdog's picture

Stockman wasn't that guy, even during his Reagan days.

Mon, 05/09/2011 - 01:32 | 1254713 baby_BLYTHE
baby_BLYTHE's picture

and neither was Paul Craig Roberts

Mon, 05/09/2011 - 06:44 | 1254833 Cultural Capital
Cultural Capital's picture

+1

Sun, 05/08/2011 - 14:04 | 1253231 pcrs
pcrs's picture

taxation=theft, taking money under threat of murder. The money will only go to douchebags dropping bombs on other people. No approved theft.

Sun, 05/08/2011 - 19:02 | 1254001 downwiththebanks
downwiththebanks's picture

Taxation = how the government steals from the masses to give to the rulers.

Sun, 05/08/2011 - 14:29 | 1253243 silberblick
silberblick's picture

Here's a hilarious animation exhorting folks to get even against the banksters and government: http://thesilvergoldhedge.blogspot.com/2011/05/join-sla-to-get-even-and-regain-your.html

Sun, 05/08/2011 - 14:12 | 1253256 km4
km4's picture

Thank goodness there's people like David Stockman speaking truth to corrupt power of both parties.

David Stockman: “Crony Capitalism” Has Killed the Free Market and Democracy http://yhoo.it/dSt6hD

Sun, 05/08/2011 - 14:10 | 1253259 dark pools of soros
dark pools of soros's picture

Free happy pills for everyone comming soon so you feel your shitburger and dirty apartment are as wonderful as what u see on tv

Sun, 05/08/2011 - 14:20 | 1253276 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Most of Reagan's men are saying Obama is failing while Obama parades around thinking he is just like the former President.

Sun, 05/08/2011 - 14:27 | 1253290 IdioTsincracY
IdioTsincracY's picture

To the contrary, Mr. Stockman is trashing Regan and his economic policies ... you know, ... the wonderful world of reagonomics, which he himself helped implement:

http://www.businessinsider.com/david-stockman-hank-paulson-reaganomics-t...

As I said:

F@ck him and Reagonomics!!

Sun, 05/08/2011 - 14:39 | 1253338 WmMcK
WmMcK's picture

But there is no zealot like a true convert.

Sun, 05/08/2011 - 14:20 | 1253285 blindman
blindman's picture


aren't the bond vigilantes the same parties
that needed bailouts and zirp? is this some
kind of freudian psycho deal with norman bates
in the mirror contemplating cutting his mother's
throat?
so where are the bond vigilantes? they are
starting the get away hummer, not yet done looting
the treasury vaults.
when the time comes they will change hats, so to
speak.
and meanwhile they are shredding the law so as to be
immune from prosecution. also, they are undermining
the one thing that protects them from public hangings.
respect for law. so, the infuriated and confused many
will, as always, have their fury misdirected at the behest
of their masters / controllers. war. the misdirection
of the fury of a people to the unknown other; rather than
dissipated by comprehending the source of their fury and
unknowing state.
no?

Sun, 05/08/2011 - 19:06 | 1254006 downwiththebanks
downwiththebanks's picture

The 'bond vigilantes' are the companies that own many of the posters on ZeroHedge.  That's why, faced with taxing these brigands or cutting grandma off health care, the Austerity cranks hanging around these parts the right of the brigand to steal at will.

And fuck grandma on this Mother's Day.

Sun, 05/08/2011 - 14:38 | 1253310 silberblick
silberblick's picture

Here's a hilarious animation exhorting folks to get even against the banksters and government:

http://thesilvergoldhedge.blogspot.com/2011/05/join-sla-to-get-even-and-regain-your.html

p>

Sun, 05/08/2011 - 15:40 | 1253518 Alex Kintner
Alex Kintner's picture

How many times a day will you be posting that link to an advertisment? Do I get a commission if I start posting it too?

Sun, 05/08/2011 - 14:40 | 1253340 blindman
blindman's picture


http://thesilvergoldhedge.blogspot.com/2011/05/join-sla-to-get-even-and-...
.
Join the SLA to get even and regain your dignity
.
full disclaimer
obviously not intended as advice of anykind,
medical or otherwise,
except maybe the part about your mojo.

Sun, 05/08/2011 - 16:38 | 1253642 akak
akak's picture

Join the SLA to get even and regain your dignity

You want us to join the Symbionese Liberation Army?

Patty Hearst and some acquaintances tried that back in the 1970s, and ended up with some hefty jail time as a result.  At least they did directly take on some banks.

Sun, 05/08/2011 - 17:25 | 1253779 blindman
blindman's picture


people don't join revolutions. the revolution
is in them and what one sees is the manifest
collective emergent effect of higher principles.
it little matters what i want or if i even exist.
it is bigger and deeper and more fundamental
than that.
king's mountaintop and all.....
the bankers are just small time con men
standing in the way of history.
don't take my word for it. just forget about'it
and enjoy the popcorn.

Sun, 05/08/2011 - 14:59 | 1253386 newworldorder
newworldorder's picture

Major change will come only when the one of the following happens.

1. The FED stops being ablle to liquify whatever financial problem other debt based central banks face, including the problems faced by our treasury dept.

2.  World capital flows, cease to believe that the US debt ponzi can be maintained. This includes other major sovereign countries as well.

3.  The US military is no longer able to provide the securiy umbrella for world commerce to continue in its present form.

Mr. Stockman is correct, but the unwind will take a long time. The American "crumbtards" will not awaken from their long slumber, until the crumbs stop falling from the table of debt finance.

 

Sun, 05/08/2011 - 15:03 | 1253402 IdioTsincracY
IdioTsincracY's picture

Mr Stockman was the architect of the current 'economic' framework .... you know, the 'trickle down' one ....

the 'crumbtards' should have kicked his ass a long time ago  ... I can't believe people still listen to this clown and the likes of him ...

of course, all free marketing for his sh!tty book.

Yo, Mr Stockman ... f@ck you!!!

Sun, 05/08/2011 - 15:51 | 1253543 JLee2027
JLee2027's picture

Thats garbage and you know it.

 

Sun, 05/08/2011 - 16:08 | 1253584 IdioTsincracY
IdioTsincracY's picture

Of course it's garbage ... trickle down my a$$

Mon, 05/09/2011 - 00:05 | 1254617 JLee2027
JLee2027's picture

That wasn't what I referred to, and you know it.

 

No more replies to you.

Sun, 05/08/2011 - 16:07 | 1253583 Vendetta
Vendetta's picture

somebody believes the US debt ponzi can be maintained?

Sun, 05/08/2011 - 17:23 | 1253772 Things that go bump
Things that go bump's picture

They believe it can be maintained for now.  

Sun, 05/08/2011 - 19:10 | 1254010 downwiththebanks
downwiththebanks's picture

Why should Uncle Sam repay crooked, insolvent banker-gangsters who get free money with which to gamble whenever they ask for it, anyway?

Sun, 05/08/2011 - 14:57 | 1253389 tom
tom's picture

I appreciate Stockman speaking on the right side of today's debate, but I always get the uneasy feeling he is trying to subtly rewrite history by painting himself as a fiscal conservative, when in fact he was a big deficit spender.

Sun, 05/08/2011 - 15:02 | 1253405 IdioTsincracY
IdioTsincracY's picture

fiscal conservative ... what a joke!!

Thank you for a good laugh!

Sun, 05/08/2011 - 14:59 | 1253395 Alex Kintner
Alex Kintner's picture

Funny how none of the Austerity Carnival Barkers ever mention ending the pointless wars, drastically cutting military spending and clawing back the $5-10Trillion handed to the banksters. Oh and give them back the toxic MBS that the taxpayers were forced to pay 100 cents on the dollar for. Until all of that is done, I'm in no mood to hear these pukes talk about punishing the working class.

Sun, 05/08/2011 - 19:10 | 1254014 downwiththebanks
downwiththebanks's picture

Don't knock the Austerity Carnival Barkers:  sure, people who can't afford food and gas might struggle a little more when we take their health care away, but the banker-gangsters have to have money for the new man-purses being released for the summer in all the SoHo boutiques.

Priorities, man.

Sun, 05/08/2011 - 15:22 | 1253459 buzzsaw99
buzzsaw99's picture

So what will finally awake America?

 

That's some funny shit right there. Wake us up to what end? Americans aren't stupid, they like the way things are. Go try to wake up someone else.

Sun, 05/08/2011 - 16:12 | 1253590 Vendetta
Vendetta's picture

how does someone wake up someone in coma?

Sun, 05/08/2011 - 17:01 | 1253712 buzzsaw99
buzzsaw99's picture

+1

Sun, 05/08/2011 - 19:11 | 1254018 downwiththebanks
downwiththebanks's picture

When the masses woke up in Wisconsin, ZeroHedgers were right there to defend the banker-gangsters with every ounce of energy they could muster.

Sun, 05/08/2011 - 15:22 | 1253461 QQQBall
QQQBall's picture

Reward prudence and saving. Cut "war dept" spending. Cut down on the empire expansion. Cut non-essential gov't depts and cabinet posts. $2.2T in reves; there is your budget, now live within it. How hard is that? Get gov't out of auto business, out of mortgage finance business, etc. Reward prudence and saving. Make investment more positive; not raising transaction costs on savers and investors. People living in hiomes 2 years w/o payments; this was unheard of a few years ago; now, its accepted. Close thefucking borders - enough with the illigels and teh anchor babies - change the fucking anchor baby law... you here illegally - your child does not get citizenship. Go back to reg UE bennies; no 99 weeks or whatever. As you cut spending, the budget will get trimmed. Use the surplus as buffer against higher IRs and to pay down deficit. Punish the imprudent - cannot pay your mortgage - hit the fucking bricks. Sell the house to a current apt renter who saved and live dw/in his means. Punish the crooks and cram-back the bad loans to fraudulent originators. "Their" answer is always higher taxes = BIGGER government.

Sun, 05/08/2011 - 19:15 | 1254019 downwiththebanks
downwiththebanks's picture

You're the illegal, White Man.  Get the fuck back to Europe.

Sun, 05/08/2011 - 15:53 | 1253539 medicalstudent
medicalstudent's picture

thundering...

 

sober up...

 

J Hazard Mater. 2011 Feb 28;186(2-3):1942-6. Epub 2010 Dec 25. The relationships between low levels of urine fluoride on children's intelligence, dental fluorosis in endemic fluorosis areas in Hulunbuir, Inner Mongolia, China. Ding Y, YanhuiGao, Sun H, Han H, Wang W, Ji X, Liu X, Sun D. Source

Chinese Center for Disease Control and Prevention, Harbin Medical University, Harbin 150081, Heilongjiang, China.

Abstract

There has been public concern about children's intellectual performance at high levels of fluoride exposure, but few studies provide data directly to the question of whether low fluoride exposure levels less than 3.0 mg/L in drinking water adversely associated with children's intelligence. In this survey, we investigated the effects of low fluoride exposure on children's intelligence and dental fluorosis. 331 children aged from 7 to 14 were randomly recruited from four sites in Hulunbuir City, China. Intelligence was assessed using Combined Raven Test-The Rural in China while dental fluorosis was diagnosed with Dean's index. Mean value of fluoride in drinking water was 1.31±1.05 mg/L (range 0.24-2.84). Urine fluoride was inversely associated with IQ in the multiple linear regression model when children's age as a covariate variable was taken into account (P<0.0001). Each increase in 1 mg/L of urine fluoride associated with 0.59-point decrease in IQ (P=0.0226). Meanwhile, there was a dose-response relationship between urine fluoride and dental fluorosis (P<0.0001). In conclusion, our study suggested that low levels of fluoride exposure in drinking water had negative effects on children's intelligence and dental health and confirmed the dose-response relationships between urine fluoride and IQ scores as well as dental fluorosis.

 

our status quo is too big not to fail.

 

(hepa, reverse osmosis)

 

 

Sun, 05/08/2011 - 16:11 | 1253594 theinebriatedsot
theinebriatedsot's picture

they're not gonna stop: they WANT TO blow up the system. They can't install their new system until they've destroyed the old [existing]. This is another piece of the NWO being set up....and if you guys think any sanity is gonna 'magically appear', you clearly don't understand the situation. Sanity won't appear because they DON'T WANT IT TO.

- el sotto -

Sun, 05/08/2011 - 16:17 | 1253605 I am Jobe
I am Jobe's picture

The war to end all wars is about to happen. Strap on bitchezzzzz.

Sun, 05/08/2011 - 16:42 | 1253660 Ruffcut
Ruffcut's picture

Why war when there are so many more riches to be stolen?

The elites love the suffering. More entertaining.

Sun, 05/08/2011 - 16:28 | 1253614 slewie the pi-rat
slewie the pi-rat's picture

isn't there an election in 2012? 

david stockman speaks to power:  "me!  me!  over here!  my hand is up!"

redistribution of wealth?  okey dokey, but only to the ubers.  and he's still there!  even tho he & reginald van raygun deregulated banks, leading directly to the S & L crisis and the keating 5 (who were senators in the banksters pockets, with the possible exception of john glenn), he is against the repeal of glass-steagall, since 2008, near as i can tell.

and, he still doesn't seem to think inflation is a fuking tax, does he?  regressive, like the VAT we can smell.

other than that, i don't have anything nice to say.

Sun, 05/08/2011 - 16:30 | 1253627 Ansare
Ansare's picture

 

Forgive the ignorance, but would someone please explain what happens with a bond dislocation?

Thanks very much.

 

 

Sun, 05/08/2011 - 16:31 | 1253634 malek
malek's picture

ZH endorses the Tobin Tax?

How come? (Or as written previously where?)

Sun, 05/08/2011 - 17:18 | 1253759 slewie the pi-rat
slewie the pi-rat's picture

unhh,...malek---try the "search" box in the RHand column of every Z-page, below the contibutors' articles, ok?

i didn't, but relying on my mem (close enuf to mom 4 this sunday), tyler likes it b/c it might slow down the hi freq freaks and also make some of the 3-cent front-runs on $100 stocks go away, too.

my "search" for "tobin tax" came up with 8 pages of ref's. 

get to work, lazy bones!

Sun, 05/08/2011 - 19:15 | 1254023 downwiththebanks
downwiththebanks's picture

How come?  

Because if I pay tax on basic commodities needed for life, the opium addicts down at the gambling casino should pay SOMETHING for the unlicensed privilege of detonating the global economy.

If you're not going to take these marauders out back and shoot them, the least you can do is tax them on their addiction to leveraged gambling with taxpayer money.

Sun, 05/08/2011 - 19:33 | 1254062 malek
malek's picture

Two wrongs will surely make it right this time.

Sun, 05/08/2011 - 20:00 | 1254116 downwiththebanks
downwiththebanks's picture

Much better to cut off grandmas medication.  Either genocide, or tax the banker-gangsters.  

Sun, 05/08/2011 - 16:38 | 1253641 Ted K
Ted K's picture

This guy David Stockman is a 100% fraud and a cocksucker besides.  Stockman complaining about the national debt is like a Kardashian sister saying Reality TV is ruining America. Look at when the nation's debt dramatically shot up----HINT: for all you "conservatives" who go to bed dreaming how you can spout family values and get married 3+ times like Limbaugh and Gingrich, the debt skyrocket wasn't under Carter.  It was when David "I'm a lying shithead hypocrite" Stockman was head of OMB and banging the gong for supply-side (trickle down theory) economics.

Read it, the graph here:  http://www.huffingtonpost.com/hale-stewart/ronald-reagan-fiscal-disa_b_8...

 

Sun, 05/08/2011 - 16:43 | 1253669 Ruffcut
Ruffcut's picture

Stockman, just wanting some face time with the cam. more useless MSM feeds. Sheeples like the turds on the barbie this time of year.

Sun, 05/08/2011 - 17:06 | 1253728 slewie the pi-rat
slewie the pi-rat's picture

good one w/ the kardashian line, here.  i think when OJ finally sheds his mortal coil, they will will do a special:  "Fondled By The Juice"

i found a piece online by bert ely, with whom i am not familiar, and who seems a little think tank-ey, at first, but i found it well-done:  Savings and Loan Crisis: The Concise Encyclopedia of Economics | Library of Economics and Liberty

here are the Pastes:

1)  An incomplete and bungled deregulation of S&Ls in 1980 and 1982 lifted restrictions on the kinds of investments S&Ls could make. In 1980 and again in 1982, Congress and the regulators granted S&Ls the power to invest directly in service corporations, permitted them to make real estate loans without regard to the geographical location of the loan, and authorized them to hold up to 40 percent of their assets as commercial real estate loans. Congress and the Reagan administration naïvely hoped that if S&Ls made higher-yielding, but riskier, investments, they would make more money to offset the long-term damage caused by fixed-rate mortgages.   

2)  Capital standards were debased in the early 1980s in an extremely unwise attempt to hide the economic insolvency of many S&Ls. The Federal Home Loan Bank Board (FHLBB), the now-defunct regulator of S&Ls, authorized accounting gimmicks that violated generally accepted accounting principles. In one of the most flagrant gimmicks, firms that acquired S&Ls were allowed to count as goodwill the difference between the market value of assets acquired and the value of liabilities assumed. If a firm acquired an S&L with assets whose market value was five billion dollars and whose liabilities were six billion, for example, the one-billion-dollar difference was counted as goodwill, and the goodwill was then counted as capital.

any freaking questionZ?


Sun, 05/08/2011 - 17:07 | 1253721 BetTheHouse
BetTheHouse's picture

David Stockman may be right in this instance, but he gets no pass.  This is, after all, the guy who, as OMB director, enabled billions of dollars in Reagan budget deficits with his creation of the "magic asterisk" accounting device.  He was the midwife there at the birth of our nation's long-term structural budget deficits.  Now, of course, all he wants to talk about is fiscal responsibility.  It's like hiring Charlie Sheen as a life coach.  No thanks.  

Sun, 05/08/2011 - 17:07 | 1253734 Muir
Muir's picture

"I think it's going to take a major dislocation in the bond market, a real conflaguration on the part of the people who have to buy this debt, before the country wakes up."

--

Well, usually I would say this is deflationary; however, as I have now come to learn from the vast wisdom of the posters at ZH, this most definitely has to be bullish for silver.

As is everything else under heaven.

-

Sun, 05/08/2011 - 17:16 | 1253753 blindman
blindman's picture


you have to consider the heisenberg
uncertainty principle in relation to
what you your self do. markets are,
prices determined, an emergent effect
of individual actions or causes. our
activity determines the nature of the
environment we find.
no?
it is about power. if you think you
have none you are correct. if you think
you have some you are correct.
an enigma? power

Sun, 05/08/2011 - 18:37 | 1253944 WmMcK
WmMcK's picture

Does that mean we can't know (exctly) where we are and how faster we're going at the same time?

Sun, 05/08/2011 - 18:53 | 1253982 blindman
blindman's picture


yes. we can document with certainty one,
but not both, at any one instant. so the choice
is up to us. which will it be. we choose

Sun, 05/08/2011 - 19:18 | 1254026 Muir
Muir's picture

Think something more like Reflexivity would be more suited, but I enjoyed reading your comments and like your name.

Sun, 05/08/2011 - 20:01 | 1254123 blindman
blindman's picture


yes, reflexivity it is. and uncertainty
in time. and here is where the physical
pm investment is superior. it covers a
long period of time. one would not
eat a barn full of soy in one sitting,
or hold a pm investment for 26 seconds.
the market will, over time, fluctuate and
the word "precious" will not be removed from
the lexicon. you will, over the next 5 - 20
years, have opportunity to sell at your price
if you buy at today's prices. i would bet
my life on that. just sayin. my point is
the sla has it correct. get deep into the market
and spread the word. the more the merrier.
of course balance and liquidity are important.
ps. on a personal note i also have a once soft spot
of my anatomy for your lovely gif. thanks.

Sun, 05/08/2011 - 17:11 | 1253743 Muir
Muir's picture

But this is inflationary:

Tyler: "Of course, if the Fed is able to sell virtually unlimited Long-Term Treasury puts, the synthetic push on sellers will never abate and the Fed can manipulate the curve virtually in perpetuity, or until such time as those buying Treasury vol protection, ironically, decide it makes no more sense to hedge against a curve yield surge."

-

Now that is ZH brilliance at it's very best!!!!

-

 

Sun, 05/08/2011 - 17:58 | 1253854 sbenard
sbenard's picture

I agree with Stockman. Those of us who "get it" should plan and prepare accordingly!

Sun, 05/08/2011 - 19:16 | 1254025 Jim B
Jim B's picture

+1

Checked and done!  

I consider it self defense. 

Sun, 05/08/2011 - 18:55 | 1253981 PulauHantu29
PulauHantu29's picture

Good article. I like Stockman....he has turned over a new leaf and is honest and realistic. Here is an interesting debate held in NYC recently:

Mr. Sylla, the economist, said that “the world would outgrow the ability to use gold as a currency” if it were to return to a gold standard and that a return to a gold standard would translate into $9,421 an-ounce gold based on world reserves and $3,500-an-ounce gold based just on existing currency supply. He proposed, though did not further define, a “constitutional form of fiat currency.” David Stockman countered that based on a 25% gold reserve requirement, the price of an ounce of gold would be at $2,000, which he said the markets would likely reach “in seven weeks” anyway.

http://www.nysun.com/national/amid-a-collapsing-dollar-two-debates-on-go...

The whole article is worth a read...unbiased and well written.

Mon, 05/09/2011 - 06:47 | 1254836 WizDumb
WizDumb's picture

Look Ma !! Admiralty Flags !!!!

Do you have a flag??

Do NOT follow this link or you will be banned from the site!