Guest Post - Vampire Squid Economics: A Case Study In Full-Blown Wetiko Disease by Paul Levy

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Wed, 01/12/2011 - 01:28 | 869350 Trifecta Man
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While Paul Levy may use some different words, I find that I agree substantially with the concepts he presents in this article.  As to how we get out of this mess, we need to revert to another system as money, and I'm fine with the concepts of using gold and silver as our basic forms of currency, or their warehouse receipts as the substitute, and other metals for change.  I believe this will start as the black market, along with barter.  Then it will florish to ultimately overturn our debt enslavement.

Tue, 01/11/2011 - 20:30 | 868642 williambanzai7
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Appropos choice of metaphor...

Tue, 01/11/2011 - 19:12 | 868517 Dr. Porkchop
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I sometimes think it more likely that there is no man behind the curtain. That what we see is the collective action of people doing what they think they are supposed to do. The great vampire squid, this kraken, is us. There are greedy and evil actors, but I don't think anyone of them are talented enough to control anything from behind the scenes.

A boss of mine once asked me; Do you know why there are stupid people in charge? Because nobody has told them that they can't to it.  

Tue, 01/11/2011 - 23:13 | 869116 Pseudo Anonym
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there are stupid people in charge?

right. Within the top-down control structure, as identified in the article, who is the "stupid person" in charge? That's what I want to know.

Wed, 01/12/2011 - 10:27 | 869695 Cognitive Dissonance
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That's what I want to know.



by Pseudo Anonym
on Mon, 09/27/2010 - 18:39

well put, LeB. Some additional ideas who the puppet masters might be can be found in this source: . When will people stop being naive and quit blaming the Fed. That's what I want to know.

Tue, 01/11/2011 - 18:30 | 868422 Pseudo Anonym
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So close, yet so far. It is fascinating to observe how presumably intelligent thinkers advising "out of the box" thinking stop short of thinking "out of the box" themselves. I respect the fact that it is the thinkers' time to waste and not mine; however, I am not sure why these thinkers are motivated to dispense yet another opinion regarding this kabuki theatre – the play itself and the characters that play in the present financial charade? Who cares? I guess they do. Why do these thinkers not focus on the puppet master? The one that pulls the strings behind the scenes? Could it be that their own psychological makeup is unable to face the fact that there is, in fact, somebody at the top of the ponzi structure and their beliefs would be shattered if the “emperor” would be identified? I guess it is easier to talk about the “Big Wetikos” than their leader: A few quotes and a few questions:

Our need for money becomes the ‘hook’ through which the Big Wetikos (who control the supply and value of money) can ‘yank our leash’ and manipulate humanity.

Who is the “Big Wetikos'” leader? Who's the Man? That's what I want to know.

As the wetiko infection progresses in the global body politic, the global economic system becomes gradually redesigned to exert more and more effective top-down control by the few over the many and to the benefit of the elite.

Who is at top if it is the “top-down control” structure? Who's the Man? That's what I want to know.

The one thing the Big Wetikos are most afraid of is large numbers of people seeing through their charade and realizing that the emperor has no clothes.

Who is the emperor? That's what I want to know.

Wed, 01/12/2011 - 03:22 | 869447 New World Chaos
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The emperor of this world is the hive mind of the oligarchy, otherwise known as Satan.  There is actually nothing truly supernatural about Satan.  He is made of bullshit securities, court precedents, corrupt regulators, fiat currency, "Law is Law" zombie cops and all other injustices and petty tyrants.  A trillion little acts of greed, control, psychopathy, and callous indifference reached a critical mass of interconnectedness and became self-aware.  That "collective dream or a mass spell" is what it is like to be part of a collective consciousness that has infected vast tracts of our culture and psychology.

Jesus knew.  The Rothschilds know.  Most of the elites are clueless, because there is no train of orders coming from a single human at the top. 

Satan's dream is to keep us stuck on this planet in an eternal dark ages.  His nightmare is that we spread out into space, transforming dead matter into conscious matter until the whole universe becomes the ultimate emergent mind:  God.

If you try to use Satan's methods (fraud, violence, lies, control) against him, you channel him and you will become part of the monster you seek to destroy.  But he has a few weaknesses:  His thought process is very slow, working at the speed of bureaucracy.  He is a parasite, so he dies when we remove the host (ourselves) from his system.  He is addicted to human misery, and this will ultimately cause him to consume himself.  Like a vampire, he is also allergic to sunlight- and silver!

Wed, 01/12/2011 - 10:06 | 869668 Pseudo Anonym
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does Vatican work for/reports to Satan (the hive mind of the oligarchy) or Satan works for/reports to Vatican? That's what I want to know.

Thu, 01/13/2011 - 01:14 | 871812 New World Chaos
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The Vatican has worked for Satan ever since the Council of Nicea and the purge of the Gnostics.  Corrupting the Church was a major coup, but the Church left itself wide open by being a state religion with a secretive, heirarchical power structure.  Satan then used the Church to suppress learning, support feudalism, run the Crusades and the Inquisition, and lead those who desired spiritual growth into a maze of worthless dead ends.  Due to the Renaissance and Satan sucking away the Church's moral credibility, the Church ultimately lost most of its ability to control, stifle and enslave.  Therefore, Satan focused on finance.  The Church is still under his control, but it is a shadow of its former self, little more than an empty mummy in a spider's web.  Satan uses it to molest children in Jesus's name, because it causes crippling emotional issues and because Satan thinks it's funny.

Now that I have offended Catholics, I will also crap on Southern Baptists, Mormons, and most other fundamentalist churches in America.  These churches are tools of Satan because they support war, willful ignorance, the police state, and tyranny in general.

Fri, 01/21/2011 - 18:13 | 894667 Guy Fawkes Mulder
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You are awesome.

Tue, 01/11/2011 - 19:26 | 868550 Cognitive Dissonance
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Why do these thinkers not focus on the puppet master? The one that pulls the strings behind the scenes?


Who is the “Big Wetikos'” leader? Who's the Man? That's what I want to know.


Who is at top if it is the “top-down control” structure? Who's the Man? That's what I want to know.


Who is the emperor? That's what I want to know.

Hilarious! Your mindless rants are so yesterday.

So you mean there is only one puppet master? A master of the whole entire world, even universe? Out of 7 billion people on this earth only one is running the show? Pray tell most intelligent one, who is it that controls the world because I never saw the author suggest there was just one.

Delusional ranters are so boring.

Tue, 01/11/2011 - 20:03 | 868646 Pseudo Anonym
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Thank you for demonstrating, by your reply, that your preference is argumentum ad hominem whenever you encounter critical reasoning that is over your head.

Nevertheless, can you name one, top-down control structure (as defined in the article), that does not have a formal (or informal) leader who decides when everybody else, within the structure, is undecided? That's what I want to know.

Tue, 01/11/2011 - 22:33 | 868969 brodix
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 Top predators no more control the ecosystem than their prey. The lion just fulfills its role, until another rises to take its place. Actually, when there is a systemic collapse, the top predators, as a species, are often the most vulnerable. Then the pyramid gets smaller, it's the top that often suffers the most damage.

It took from the American Revolution to World War One to decisively get rid of monarchy, which was political power as private property. Out of this process emerged private banking and now it's time to start making that a public function as well.

 Just as a house has personal rooms and family rooms, society has private functions and public functions. The financial system is the circulatory system for the rest of the economy. When  it is run by private parties, they can effectively tax the rest of the economy. Thus, if it is a public function, these inherent taxes go back into the public purse.

Money is the blood of the economy, so the vampire metaphor is appropriate. 

Tue, 01/11/2011 - 23:05 | 869085 Pseudo Anonym
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within the animal kingdom, is there a social (and functioning) structure (i.e. beehives, ant hills, wolves, lions, etc.) without a "top dog" leader? Is there a top-down control structure (i.e. financial oligarchy, elites, naked emperors, etc., - as defined in the article) without a top dog?

The financial system is the circulatory system for the rest of the economy. When it is run by private parties

nature abhors vacuum. Is the financial system, run by private parties, without a body of command? No private party strong enough to take the command? No player strong and ambitious enough to take the lead? Entities within a top-down control structure reporting to nobody? Vacuum at the top? Was that the premise for your reply? That's what I want to know.


Wed, 01/12/2011 - 08:01 | 869524 brodix
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The king is dead. Long live the king.

Yes, but it's constantly changing and evolving. Occasionally the whole system get destroyed and has to rebuild. We are at a point where the concept of storing infinite numbers of these drawing rights to community productivity as been blown completely out of any logical proportion and it's going to require a new paradigm. The larger society is, the more we are cells in a larger system and not autonomous agents. Fact of life.

Wed, 01/12/2011 - 09:52 | 869649 Pseudo Anonym
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To stay on topic, the author of the article identified a top down control structure; which ponzi scheme is. The financial elites that perform to our enjoyment in this kabuki theater we love to watch and hate, and many authors analyze, is extremely well organized internationally for an organization that is about to self-destruct and is in disarray. Who (not necessarily "a guy") writes/wrote the script for these top players in the ponzi scheme? Who controls the ponzi scheme today? Who/what, at the top, decides when nobody knows what to do and how to move forward? And when a final decision to move forward is made, to what/whose benefit? Based on what criteria? That's what I want to know.

Wed, 01/12/2011 - 14:55 | 870733 brodix
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Ponzi Schemes only work as long as everyone thinks they are getting more out than  they are putting in and that is the motivation behind all investing and many social institutions.

The fact is that capitalism itself has gone from being an economically useful process of allocating value where it is most productive, to being a self sustaining organism that is fundamentally focused on the creation and maintenance of capital.

 Probably this was inevitable, given the natural desire of everyone to want a piece of the action, as well as the fact that a debt based currency requires ever increasing production to service the debt and increasing debt to finance the increased production.

 The fact is that money is a form of contract, with everyone, by everyone using it and when everyone is going to try and cheat on it as much as possible, it has a finite lifespan. For a functioning currency to last, it can't be treated as a form of property, but as the economic contract which it is. Essentially a form of public commons, much like a road system. Everyone understands roads require public support and there is no social respect for those abusing the system. This isn't socialism, just an admission of economic reality.

 As for who is at the top and controlling it, now it's the bankers, because they have the economy by the balls. Obviously the energy companies also have their bottleneck and the security industry seems adept at ringing a few billion out of every crazy they can find. The actual politicians have pretty much lost control of the situation, especially with how they control finances. Normal budgeting is to define priorities and spend accordingly, but they put together enormous bills and then add on whatever is required to get enough others to vote for it. This is fundamentally designed to overspend. Which just so happens to benefit the investors in government debt. Actual budgeting would be to break those bills into their items, have every legislator assign a percentage value to each item, reassemble the bill in order of preference and have the president draw the line at what would be funded. There would be little incentive to overspend, since the few items on the line would have a smaller constituency than those being asked to fund them. This would destroy our debt based currency system though. So whenever you hear politicians railing about overspending, they are being disingenuous tools.

 The fact remains that very fundamental laws of nature apply to us all and if you want to understand, study basic physics, rather than politics. It is a constant process of social expansion and civil consolidation. In out, left right, up down.

Tue, 01/11/2011 - 17:01 | 868089 Drag Racer
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great post CD. Paul Levy has shown some real insite in this article.

Tue, 01/11/2011 - 16:21 | 867924 downrodeo
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THanks for the posting CD, I always enjoy hearing what you have to say. I like paul levy, he has a very gentle way of moving your attention to the appropriate questions and discussions. On a tangential note, I didn't know until today that there is actually such a thing as a vampire squid. I had always assumed it was just a clever metaphor. Ya learn something every day. Thanks again!

Tue, 01/11/2011 - 16:19 | 867919 George Washington
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CD: You and Paul Levy are two of my favorite authors...

Tue, 01/11/2011 - 16:35 | 867974 Cognitive Dissonance
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Paul Levy is amazing and his depth of knowledge always floors me. After an hour or two of talking with him my head is spinning with connections and ideas that never occurred to me up to that point. As he and I have talked over the last 2 years, I've seen how his non economic ideas have a place in my economic thought process and I regularly share with him my articles that often result from our conversations.

Until recently, even though Paul has a background in economics, he has never written on the subject for a multiple of reasons. I was not surprised to find early on that he is also closely connected to Catherine Austin Fitts. When Paul decided to write on the subject of economics I knew it was going to be an interesting ride.

Thanks for your kind words. I will pass them on to Paul, but I'm sure he will pop in and see what we are saying about his work. I don't think he's registered so he won't be leaving comments.

Tue, 01/11/2011 - 16:07 | 867893 brodix
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If we simply accept that money is actually the property of the guaranteer, which it most definitely is, then people would be far more careful what value they take from social connections and environmental resources to convert into money. The result would be a far healthier society, as well as a stable environment, economy and financial system. As well as a less powerful banking system and government, since their main lever of power and resource extraction would be smaller.

Capital is subject to the laws of supply and demand. We can only store as much wealth as can be productively invested, otherwise we just blow bubbles. We can only build as high as the foundation will support.

Tue, 01/11/2011 - 16:27 | 867940 traderjoe
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IMHO, the notion of quantities of money as the key barometer of success and personal self-worth has almost completely seeped into our culture, accompanied by consumerism as the expression of this self-worth. The more we make, the more we buy, the 'better' people we are. Of course, I believe this belief system has been fostered by the PTB (in a broader sense) in order create higher velocity. Velocity allows the PTB 'vig' to skim more from the top. Inflation is a part of the vig. 

In addition, the faster we spin on the hamster wheel, the less we have time to question and participate to influence the system. 

It makes for an economy that is virtually entirely based upon consumerism of mostly useless and disposable crap, with diminished social and familial connections. 

Of course, not all is lost, and the above is a wide generalization. I remain hopeful that a 'post-money', community-focused reality awaits us...

Tue, 01/11/2011 - 16:24 | 867931 Cognitive Dissonance
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Capital is subject to the laws of supply and demand. We can only store as much wealth as can be productively invested, otherwise we just blow bubbles. We can only build as high as the foundation will support.

Thus the need for illusion and the induced Wetiko disease to extract more out of an economic system than it can reasonably be expected to produce under these conditions, with leeches and vampires squids sucking it dry. How do you get the natives to act against their own best interests, to believe they are doing what's best for themselves when just taking a few steps backwards would show them it is not? The society at large must be infected with a psychological disease.

Isn't it interesting that the US Military is constantly conducting experiments to get soldiers to expend more energy over longer periods of time than mother nature intended. Despite the obvious physical destruction such activities produce, the soldiers almost always experience serious and often permanent mental illness or breakdown. The same thing is happening to society at large.  

The biggest lie we are told is that this is the only way to conduct an economy. Catherine Austin Fitts has written numerous articles describing not only how this is false, but that alternative economics would be much more productive. Our lost productivity is being sucker up by the Vampire Wetikos Squids.

Tue, 01/11/2011 - 15:18 | 867754 Bastiat
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Look forward to reading this at lunch, CG.  Always wanted to thank you for your ealier series which I read as a lurker.  So thanks!

Tue, 01/11/2011 - 15:43 | 867833 Cognitive Dissonance
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By my rough calculations over 75% of the people who come to ZH never leave comments. Thus "we" say they are lurking. You are (or were) in good company. Many ZHer's who leave comments believe they represent the Zero Hedge family. I know at least a dozen ZH readers who don't leave comments. While there are some similarities between the silent majority and the more vocal minority leaving comments, the silent majority is not who we think they are.

Thank you for playing in the ZH sandbox.

Tue, 01/11/2011 - 18:28 | 868417 Bastiat
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Thanks, nothing like it!

Tue, 01/11/2011 - 15:09 | 867718 Andy Lewis
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How, then, do we proceed?

Tue, 01/11/2011 - 17:20 | 868160 hbjork1
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IMO, very good question Andy.

Man, with his complex brain, has become the dominant animal on the planet.  As the population of man increases, competing with other animals and other tribes of men through the uncountable cycles of reproduction and death, man has tended to render many other species.  Other man-like creatures are known only from their fossilized bones.  Man's success is predicated on capacity to control or eliminate competition for available resources.  In our time man has survived reproduced sufficiently to begin to impact the very earth systems required for his own support.  IMO, "The Squid" behavior, that can sometimes be seen naturally occurring in young children, is bred in as a survival instinct? Reductio ad absurdum. Yes, we need money.

1. The needs of our lives are really the physical support and social interactions around us. 

2. Abode, heat, food, transport, (It takes too much time to walk everywhere.) all require collective activity to supply our lifestyles. 

3. Ergo we must have a medium for exchange of our own resources with the resources of others.

So what to do about "The Squid (or Squids)?

IMO, what is wrong with first principals?

Why not start with calling fraud "FRAUD" and dealing with it, to a greater extent at least, as white collar crime?

People who "Robo Signed" home foreclosure documents might be given a slap on the wrist if they were not the perpetrators, but the people that set the system up knew what they were doing and should be given some jail time at least as a deterrent. 

Many on this board saw Lloyd Blankfein's (and some of Paulson's) testimony on C-Span and he admitted that they were selling what I will call "bad goods", but the buyers were so greedy that they didn't do their "due dilligence".

Possible solution: tranches sold should be what they are represented to be as a matter of law.  Quit treating it as a Poker game.   If the buying entity wants them without guarentee, the responsible corporate officer should be required to sign a release.  The prospect of loss of capacity to sue would be a motivator. 

I sign releases for personal affairs that involve very little money. 

Of course, a major problem is that the people that make our laws are too often culpable.  Promises are very frequently not kept. 

We all have one Representative that is our very own. (Except, of course, for some folks in Arizona whose Representative is in the hospital.)  We all have two Senators as well. 

The President called this incident a "tragedy".  Opportunity to lead missed.  He should have called it what it was, "murder and attempted murder of a US Congressperson."  

Tue, 01/11/2011 - 15:35 | 867805 Cognitive Dissonance
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Paul Levy is finishing up the final chapter in which (he has promised me) he will present some solutions. Alas, I suspect those solutions won't involve voting for some new charismatic face who tells us what we want to hear but is still captured by the same power brokers nor complaining that someone (else) needs to do something about the mess. 

The problem is that we all want someone else to fix our problems. To avoid accountability we spend a great deal of time hating the "bad" guys (aka patsies and figureheads) rather than taking care of the one thing we completely control, the space between our ears.

Tue, 01/11/2011 - 16:16 | 867911 flattrader
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And CD what if his solution inolves small town financial brokers and advisors like yourself closing up shop and going home for good?


Afterall, are you not a "Wetiko" products pusher?

Or perhaps you only sell socially conscious mutual fund products?

Tue, 01/11/2011 - 16:44 | 868017 Cognitive Dissonance
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Interesting that you ask because I'm in the middle of an article on Enlightened Self Interest. I have no doubt that his suggestions won't be exclusive to small town brokers.

Would it surprise you to know that I have twice left more lucrative positions in the financial world because I couldn't live with my own hypocrisy? I do practice what I preach though I am not perfect. Most cannot say the same.

Tue, 01/11/2011 - 17:21 | 868161 flattrader
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I think Levy is disingenuous.  (Like CHS.)  They claim we're ALL to blame.

The wetiko economic system is a bribery system. The Big Wetikos give us a tiny overflow trickle of the over-the-top profits they unjustly reap and in which we gladly share. We then pretend that we are ‘clean’, that we are not complicit in the systematic evil that is playing out. We fall under the self-inflicted illusion that we are not responsible and are merely victims of the system. And yet we are simultaneously feeding off and supporting the very evil of the system as it kills us.

What nonsense.  It's quite obvious to all but the addle-minded on ZH who the perps are.

I think they are beating on the enlightened investor because they themselves don't know what else to do or how to affect change.  Certainly no one else is reading their missives.

Assuming you've taken your money from the grasp of TBTF banks-brokerages, pulled your investments out of truly evil stocks/corporations/enterprises and become a conscious consumer where does that leave you?

(Even buying/holding PMs feeds his Wetiko monster.  There are plenty of small gold mines abroad worked by people who are kept in near slave-like conditions.  Some of these operations were discontinued when the POG was low.  Not any longer at near $1400 per oz.)

So, then are WE STILL to blame?

What BS.  We need to stop flogging ourselves and each other and go after the real perps.

Tue, 01/11/2011 - 15:08 | 867712 cheesewizz
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The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled dry American empire, reads like a Who's Who of Goldman Sachs graduates.


Tue, 01/11/2011 - 17:05 | 868105 velobabe
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GS is everywhere, and i know his private side kick†

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