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Frontrunning: February 2
- Tom Hoenig for Treasury (Simon Johnson)
- Moral hazard prompts TCW and AllianceBernstein to buy bank sub debt (Bloomberg)
- The dollar-alternative trade continues: commodities rise as AUD drops on no OZ hike (Bloomberg)
- A scoop of double dip (Barrons)
- iTraxx Fin widest to iTraxx Europe since Lehman (Bloomberg)
- Philippine bond sale fails for second time this year (Bloomberg)
- Swiss banks Achilles heel is workers selling data (Bloomberg)
- Germany may be willing to buy stolen Swiss bank account data (Bloomberg)
- Davos, the contrary indicator (Slate)
- Volcker rule unabridged (MarketWatch)
- Social Security could be next to need a bailout (WaPo)
- Anyone remember Great Atlantic & Pacific? Another horrendous idea by Burkle's retail team (WSJ)
- Banks ready to battle over Volcker rule (Reuters)
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The Washington Post article was the dumbest thing I've read in a long time. Someone draw the man a T-account.
Washington Post has become a Republican rag, Graham's grandaughter wouldn't know how to Edit a newspaper if Edgar Allan Poe came back from the dead and tutored her for 5 years. She's an embarrassment to the Graham family name
What part of "Social Security is taking in less in taxes than it is spending on benefits" don't you understand? The Ponzi scheme set up in the '30's is about to crash (as they all eventually do). There is not (and never has been) a "Social Security Trust Fund." The people who have paid into SS all their lives, thinking they were "saving" for their retirement have just been making deficit spending easier for the Democrats and the RINO's.
The deficit math is relatively simple. In less than a decade, the US national debt will reach 20 trillion. If Treasury-debt interest rates reach 10% (it was much higher in the '70's) the entire income of the Federal Govt will go to servicing the debt. Even an novice accountant could tell you how that will end--insolvency.
By 2020, the US will either be a "socialist paradise" (really "socialist hell," like Venezuela) or we will have gone through something akin to the Civil War, only this time making the states predominant, and returning the Federal Govt to its intended, limited role. No idea which will happen, but one or the other will.
PS. The WaPo is a rag, but it is a tool of the Obamination, as are most of the media. If the WaPo is getting scared about the fiscal insanity of the Feds, the end is near.
When will we stop pointing fingers at this party or that party and recognize there is one political party with two different factions jostling for power? It seems average Joe is the last to figure this out. The lobbyists and corporations realized this decades ago, centuries ago, and thus are equal opportunity bribers...er...campaign contributors.
Spend some time going over the corporate donor lists and you'll discover the reality. As long as we continue to believe there is salvation in the "other" party or "our" party, we are just mice on the treadmill. Let's grow up folks.
+1000 all this political back and forth bickering only distracts you from the looting taking place. Both parties are one in the same.
http://gregmankiw.blogspot.com/2010/02/president-obamas-new-budget.html
The problem with Johnson is that he, like so many in the academic/economic community are partisan hacks. Hoenig may be an inflation hawk and may be outspoken but take a look at his voting record. Johnson's first point is that Hoenig has spoken out against the banks, well so has the president. Johnson highlights that Hoenig is a republican (so what) and goes on to say we don't really know much about his views.
Finally consider this - we have a president who re-appointed Bernanke as Fed Chair and now we have a left of left academic in Simon Johnson wanting to have the Treasury (currently headed by ex Fed Geithner) headed by another Fed? Are there not candidates outside of the bankster/Fed cabal? Last week in his blog and on the front page of HuffPo we had Johnson and his sidekick James Kwak calling for Krugman to replace Bernanke.
Krugman....now there's a losers loser.
Did I mention he's a loser?
Burkle through his company Yucaipa is a genius, reference his play in the consolidation of the grocery business back in the nineties
Highlights
'91 Burkle acquires Alpha Beta markets for $245m
'94 Burkle acquires Smitty's (Arizona) for $141m
'94 Burkle acquire's Ralphs in SO Cal for $425m + 1b in debt
'95 Burkle acquires Dominick's in Chicago for $750m
'96 Burkle's Smitty's merges with Utah's Smith's $240m
'97 Burkle gains control of Fred Meyer in a transaction valued at $700m + $1.3m debt
'97 Burkle/Fred Meyer acquires Ralph's/Food 4 Less etc and Spearately QFC for $2b in stock +2.9b in debt
'98 Burkle sells Dominick's for $1.85b
'98 Burkle sells grocery holdings to Kroger for $8b + $4.8b in debt
"Social Security could be next to need a bailout"
<sarcasm on> Boy, I didn't see this one coming. <sarcasm off>
I remember having a conversation with a financial planner was I was a younger man and investing a small amount of money into my first IRA account. The financial planner (actually a financial products salesman with a better title) told me the IRA would supplement the Social Security I would receive when I retired.
Even way back then I recognized that the SS program was just another tax that would not be there when it came my turn to step up to the pay window. I remember the naivety displayed by the salesman, my friends and my family, who all told me it would be there when I retired, dutifully repeating what they had been told by their government and most importantly, our wonderfully free and independent press.
Of course, the promises were never intended to be kept, which in my view is obvious when you examine the actions of the government and citizenry over the past 30 years. We never held the government's feet to the fire so who is to blame here folks? Do you blame the 4 year old child throwing the temper tantrum in the middle of the super market or the parent who ignores the child while s/he examines a can of peas?
Has anyone noticed that the current younger generation, those who are now between 18 and 30, have no illusion regarding SS and don't expect to ever receive a dime from the 7.65% the government takes from their paycheck? Talk about the full faith and credit of the citizens being in danger of slipping away.
My real fear is that this generation won't decide to revolt and tear down the system but in fact will decide to join the fray and take what they can while a system is still functioning. We, the baby boomer generation, the former pot heads, long haired hippies, participants of the free love and drugs movement of the 60's and early 70's, those who marched in protest demanding accountability by their government, are now not only average Joe but the bankers, governmental leaders and middle management of "the system". We have brought this world and our nation to it's knees. Do we really expect the up and coming generation to save us from our own shit pile? Or will they join in on the thieving.
+1000
Totally agree.
The thing that really scares me is whether I'll actually get to keep my IRA and 401K money that I so diligently saved (and shoved into moneymarkets in late 2007) knowing that SS wasn't going to be there for me. Perhaps now we'll be forced into annuities backed by the full faith of the US government which is nothing in my book. Need to figure out how much I can get out without subsidizing the gov't largess too much in penalties and AMT.
And how soon before the boomer parents are out on the street with no SS income and looking to move in with us?
Dude, start getting the guest room ready today!
SS was originally designed to only provide 1/3 of one's retirement needs. So, at one time, empowerment and self-determination were still in vogue. Consider now that 401k's and IRAs may be stolen and converted to government-backed annuities, and outrage should be faire-du-jour.
If our 401ks and IRAs are confiscated, will this be enough to get people into the streets? Will the army of savers defeat the army of non-savers? We know that we are outnumbered by the non-savers, but we should be tougher than they; after all, we have already foregone consumption in the present for security in the future. I hope we are ready to fight for that security in the now.
"If our 401ks and IRAs are confiscated, will this be enough to get people into the streets?"
Nope, it will not be enough. Facing the choice between surrendering your IRA/401(k) to the government (of course, it won't be presented that way) or armed insurrection in the streets, exactly what do you think the average Joe will do?
I've spent a great deal of time studying Nazi Germany because I could never understand how millions of Jews would simply walk themselves on to cattle cars and how the rest of the population would not only condone it but in many cases applaud it.
The key was that there never was a time when BIG choices were ever presented to the population. For the Jews, it was small choices. Do you get an ID card or face arrest? Do you move to the ghetto or get beaten on the street and thrown in prison?
For the rest of the population, the same small choices were presented. Either they can accept the propaganda being presented by their government or they can be branded uncooperative and treated like the Jews. I personally believe the torture in Guantanamo was done deliberately so that USA citizens would recognize the extent to which the government would go towards getting what they want. Psychological terrorism against their own citizens. Very effective. It is of course much more complicated than this and brilliantly simple.
If you step back and view what is happening in the USA over the past 30 years, and in particular the last 10 years, the same process is in place. When it comes time for the government to seize the people's savings, the propaganda trail and villains will have been carefully laid out by government and the MSM for months or years in advance. And the meek sheep will face a decision, go along to get along or revolt.
The answer in 95% of the cases will be the softer easier way, to go along to get along. Do not expect people to revolt even when their children are being dragged away in chains. Won't happen. Fear is being used to control the population and it always works extremely well. I have history as proof. When a population has lived their whole lives in denial of what they are and how they live their lives, do you really expect them to suddenly grow some backbone?
You're living in a dream world, Neo. (No insult intended, I just love to use that "Matrix" quote.)
Well said CD, as usual. Hitler wrote about the power of propaganda (which our media has perfected) in Mein Kampf, Chapter 6 I believe. Fits to a tee. The media is a large part of the problem, not the solution. I wish people would figure that out. I don't listen to any of the TV propagandists, and I'm much better off for doing so.
Thank you for your kind words.
I made the mistake for a number of years of advising people to just turn the TV off. But I realized a decade ago that doing so was a reaction and not a response. It was the equivalent of covering my eyes rather than acknowledging the ugly facts in front of my face.
What I know say is the practice intelligent and disciplined viewing, to be critical of what you're absorbing, to question everything and anything, including what I'm saying here and now. We must understand how the modern propaganda and mind control techniques work if we are going to effectively resist them.
Sadly this requires an involved, engaged and proactive mind and spirit, which flies in the face of the softer easier way. It has gotten so bad that I no longer try to wake anyone from their slumber. The shock to the system will in most cases drive them even deeper into their denial. One can not be shaken awake, one must desire to awaken. This is an internal process and any external influences will only slow down or halt the awakening process.
I'm not saying I should do nothing. I must always be ready to offer a helping hand when they begin to rouse and I must always be a small irritant, like a mosquito buzzing around the ear, to remind them there is more they need to learn. But to hope that they will begin to climb the huge learning curve of the awakening simply because I'm shaking them just demonstrates my naivety.
I suspect that you are correct, of course. Too easy to paint the savers as being greedy, rich, and different from everyone else, and the masses generally dislike anyone who isn't like them. The leaches will be more than happy to succor off of our confiscated savings.
As screwball said, brilliant as usual. It is all about fear. I completely agree about Guantanamo. It's not so we fear the captive. It wasn't just the pictures and descriptions they leaked from Iraq, they also told us that they had studied those "reverse" psychological methods to produce the fear. They make sure we know these are "military" prisoners with no rights, no habeas, in a war with no borders that will never end. How exactly do you end terrorism? I often wonder that if someone tries to organize some kind of an economic shutdown, they will be arrested as a terrorist. Then what?
All this good news, ummm I'm thinking plus +95 on the dow today. Too much good news to go down.
The failed entitlement system of Medicare and Social Security is linked inextricably to our failing political system. One system built on another. If we want to defeat the political system, we must destroy the entitlement system.
The first step is to state the obvious: Social Security and Medicare are transfer payments, not savings or insurance plans. Wealth is transferred from young to old, vigorous to lame, rich to poor, healthy to unhealthy, wise to unwise. This is the currency of political power in this country.
The system is too powerful to be destroyed in one blow. We must begin by weakening it. This can be done by reducing the number of people that receive benefits by raising the ages of eligibility and introducing means testing, whereby people receive no additional benefits over certain levels of income/wealth. This will reveal the chimera to be what it is, and eventually enough of the electorate will come to hate the system that it can be wound down to a reasonable purpose, such as providing a very minimum level of benefits to the indigent.
What candidate for office will step forward today and vow to destroy Social Security before it destroys us? Whoever that man is, he will receive my full support.
Fiat currency is the precursor of the entitlement state. Perhaps, working in reverse, we can once again rely on a gold standard for our reserve currency.
The game is rigd, and until it all just goes away, we will just be circling the drain. Really nothing that can be done in that aspect. Just have to stop flying, anything they are trying to control just stop doing. But very postive on the future :-)
http://www.dailyjobcuts.com
UK economy "rests on a bed of nitroglycerine"
http://www.thetrumpet.com/index.php?q=6924.5439.0.0
I don't know, do you think his metaphor shows any concern?