- advertisements -
Who did not see this one coming?
I mean.... srsly.
Q: Both personal income and disposable income were down in Q3, so what's a Gov to do?
A: Spend someone else's money
Ramblings from Sancho
In any country there are those in the private and public sectors who are willing to line their own wallets at the expense of others. The problem arises when the people in charge of containing the corruption become careless or worse yet, corrupt themselves. In a society where regulators fail to regulate, the end result is a breakdown of law, justice and equality, and ultimately, trust.
Such an event does not happen overnight. As a society matures and prospers it is natural for elected officials to try and spread the wealth (or at least the appearance of spreading wealth.) Entitlement programs sprout up like mushrooms after a soaking rain, and markets are manipulated to increase consumption. While one can argue that entitlement transfers and increased consumption can be a good thing, selling homes to those who cannot possibly afford the payments and creating policies that benefit bankrupt corporations at the expense of the prudent is neither just nor proper.
As the economic climate degrades and the inevitable asset bubble begins to implode, those dependent on a skewed market or economic bailouts get desperate. If the regulators are doing their jobs, fraud is exposed and those responsible are prosecuted. Similarly, financial corporations that had bet the farm on risky investments are taken over and reorganized. To prevent future meltdowns, the legislative regulators draft bills to limit leverage and prevent fraudulent lending practices. The economy eventually heals and begins to flourish.
If the regulators are influenced by cronyism, greed or intimidation, a severe economic downturn may result in the creation of a huge societal rift. The chosen few who were saved at great expense return home to their penthouses while the middle class gets stuck with the tab and an underwater mortgage. The myth of equality is irrevocably shattered as Joe Sixpack loses all trust in Government. To appease J6P, the Government juices up the economy by creating money and dropping interest rates to nothing. But because there is no trust J6P refuses to increase consumption. The Government does everything imaginable to encourage the purchasing of homes and other durable goods to counter plunging tax revenues and staggering deficits, but J6P's balance sheet is in no condition to take on more debt. J6P's disposable income drops further as new sources of tax revenue are explored and signed into law to counter revenue shortfalls.
J6P grows disillusioned as the income gap between the middle class and the unemployed vaporizes. Heads roll in the next round of elections but without proper regulation, the party in charge is of no consequence. In a world without justice or trust, it's every man for himself. The criminals and lackeys responsible for the collapse emerge stronger and more arrogant than before. With a taxpayer backstop, they push risk to a new level in yet another attempt to fleece working class. Deception, greed and outright fraud are irrelevant as regulators turn a blind eye. Political whipsawing ensues as voters choose fringe candidates from either party in a desperate attempt to fill the rift. As a result, boom-bust cycles increase in frequency and amplitude until the financial shocks can no longer be absorbed. Without proper regulation and incentives, any free market economy is destined to fail.
Thanks Sancho. May I add, from Ayn Rand:
"When you see that trading is done, not by consent, but by compulsion - when you see that in order to produce, you need to obtain permission from men who produce nothing - when you see that money is flowing to those who deal, not in goods, but in favors - when you see that men get richer by graft and by pull than by work, and your laws don't protect you against them, but protect them against you - when you see corruption being rewarded and honesty becoming a self-sacrifice - you may know that your society is doomed...
"Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper... Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked: 'Account overdrawn.'"
...End the Fed.
At least Audit it, all of it.
To think Greenspan once penned this for her newsletter:
Sancho, I think you were just junk flagged by Ben or Timmay!
Great quote from my favorite book. Thanks
One of my favorite quotes, and quite salient Sancho.
A few facts:
Sometimes I don't think citizens or representatives understand the facts above, I sometimes feel lonely in the realization of how corrupt the system is and feeling that few understand this. If we have the leading military in the world, why do our representatives let the tail of the central bankers wag the dog (US govmt)? I know the military basically enforces the commercial interests of corporations, but why is banking so over-represented - have they taken over ownership of most of the corporations and industries? If they have taken them over, people need to realize they did it illegally with their own printed paper and are therefore not the rightful owners. Any thoughts, where am I wrong?
From Ron Paul, "It is imperative that the American people know what the Fed is up to, how much money it loans to banks and what types of agreements it enters into with foreign banks and governments. Just about all of this information is exempt from audit or oversight. The Fed's actions directly affect the value of the dollar, which is coming under increasing pressure from our foreign creditors. If we do not wish to see a complete collapse of the dollar, the Fed needs to be subject to a strict audit of its actions, if not an outright abolition of its charter...
The Fed's influence comes about because of its monopolization of the creation of money. If we could abolish the government monopoly on the creation of money, the Federal Reserve would be forced to clean up its act or go out of business. Economists know that monopolies lead to reduced output and higher prices, a suboptimal allocation of resources. This applies as well to the market for circulating currency as it does to markets for any other good...
The final barrier to competing currencies: Laws that assess capital gains and sales taxes on gold and silver coins. Under federal law, coins are considered collectibles, and are liable for capital gains taxes. These taxes actually tax monetary debasement. The purchasing power of gold may remain relatively constant, but as the nominal dollar value increases because of a weak dollar, the federal government considers this an increase in wealth and assesses taxes...
Thus, the more the dollar is debased, the more capital gains taxes must be paid on holdings of gold and other precious metals.
The long-term strength of the dollar will only be weakened by maintaining the Fed's monopoly on our monetary system. Our foreign creditors are already moving to dethrone the dollar as the world's currency...
The prospect of American citizens also turning away from the dollar toward alternate currencies should provide an impetus to the U.S. government to regain control of the dollar and halt its downward spiral."
And that is the way it is folks....
Don't be lonely. I am with you.
We need to form a support group here on Zero Hedge for those of us that recognize the biggest swindle in the history of mankind.
Let's meet in the basement of Lou's Tavern.
Hang out and see what happens.
Your "pretty interesting theory" you have, I have had that type of thought before, but I thought they were going to do it to Citi (AIG zombification, life support cash blood flows to the rest of the system), but I did not think of it from the point of the CBs. The problem I see with the theory is that they are not like AIG, primarily insurers. So while the idea feels right, and it is possible I don't understand aspects of how Citi and BofA function compared to AIG, I had ruled it out because they were not insurers. I had gotten to the point of thinking about corporations without loyalty to countries, but not the CBs. That takes it up a notch and would explain why there is soooo much cooperation between these units/corporations. It is clear we are being used and tossed aside like a third world country (or if I may be so crude, like a used condom).
AN, you give good post.
The safest bet I can think of is that the government will keep running deficits to try to keep unemployment from going too much above 10%. And a decent bet is that households and institutional investors will pump money into treasuries until treasuries are a goodly percentage of their net worth, and that will keep a damper on inflation and interest rates for longer than most people thing, and thereby, allow deficits for longer than most people think.
Not that I'm happy about any of this, but what can you do.
Who is John Galt?
You are kidding, right? I mean, unemployment is truly waaaay above 10% (try around 28% to 34% -- seriously!).
Secretary Locke is the same sec'y who has given waivers to companies receiving "Stimulus I" funds to allow them to buy foreign, and offshore those "green jobs."
I mean, once the few green jobs which are actually created from those funds are registered in the USA, then they are immediately offshored.
Please remember, Secretary Locke is the former Gov. Locke of Washington state, who offshored state jobs at 49 out of 51 state agencies.
The dood's got a record.....
And the Fed is the one who is pumping money into treasuries (including some of their offshore "companies" which are doing some of that purchasing), plus Goldman Sachs, Morgan Stanley, and others, doing their naked short selling on that exchange of theirs, ELX Futures.....
You have to wonder at what point someone in govt will wake up and realize that, just maybe, unemployment is above 10% BECAUSE of the stimulus.
marginal productivity of debt is negative....
recovery is impossible.
Good luck with that...
You're in WA, too no?
I appreciate your comments and will buy you a beer near Seattle if you want some time.
His handlers walked this statement back:
i saw that article.
the deal is that no admin official can use the word "stimulus".
they can spend another kazillion trillion, but it will never be called "stimulus".
FDR's CCC v.2.0 coming soon to a neighborhood near you.
This cannot be happening! Help me...I've fallen and I can't get up!
Here are a couple of useful synonyms for "stimulus" that could perhaps be used...
14. shot in the arm
If it was up to me, I would go with a "shot in the arm" -- but I guess that would be too confusing; with the H1N1 flu vaccination and all. Maybe a kick (in the ass) would work...
You forgot K-Y warming gel...for that warm anal probe it really stands for.
I can hear Obama saying it now:
"My fellow American citizens. We warmly invite you to bend over and grab your ankles. I have been meeting extensively with members of Congress, and we have agreed to the creation of a new Boning Package. No longer content with financially raping you, we have decided to rape your children, your grandchildren, and all your descendants in perpetuity."
obama and fellow american citizens is an oxymoron.....
Thank you for the excellent suggestions. I've got most of them on my list, but number 12 is a real killer! Fuck you.
First, I would like to thank you
Unconditionally and without reservations for your kind words.
Certainly, you will understand how touched I am by your great
Kindness. As you can appreciate, it is my hope that by
Year end, this terrible mess will be
Over and things will be back to normal for all of us.
Until then, I can only wish you and
The administration the best of luck
On your many important endeavors and please
Offer my best to the President and his lovely family.
Arnold, Governor of California
Fuck you steroid breath.
Until you can rout out those southern cali right wingers, you will not get a cent of propellant 2.0 money. And, tell that right wing fuck Issa to leave my squid buddy bill dudley alone.
here's wishing a 900 barbell falls on your throat, crushing the life out of you and barbara boxer becomes the next governor of california.
ps....stop sending those semi nude pics of you in your dick suit to barney in exchange for him agreeing to backstop future cali municipal bonds. it ain't gonna happen unless you guarantee a Dem in every fuckin' cali congressional district.
DH is on a roll tonight! Let em rip buddy!
I've asked DH to contact you to advise that you hold off any $52 put buys on the "diamond boy" company as he will likely be the next treasury secretary in short order.
You see, I am modeling the timing of the political ramifications of terminating (with prejudice, naturally) that little phuck geithner, primarily because he cannot lie worth a shit and he is making our team look pretty silly because of the lack of this critically strategic skill set. For fuck's sake, even our worshippers at HuffPo have a picture of that little premature ejaculator on their headline every day because he cannot properly spin the incestuous and symbiotic relationship with my good friend lloyd blankfein. If turbo boy was doing the right job, the huff po-bama sycophants would have lloyd on a pedestal alongside with, well, Barry O himself: you know, a force for good, an agent for change, and, errr, a champion of transparency. Anyways, I digress, though it is fun when larry and I laugh our stones off whenever that stuttering little squirrel gets up in front of a microphone or camera. You should have seen the fucking projectile diet coke vomit coming out of fat larry's nose when Tim most recently did his "we support the dollar" gig for the 800th time in the last two months.
Anyways, back to the diamond boy. Naturally, upon assuming this important job as assistant to larry summers and the goldilocks gang, jameroo will do everything humanly and legally (wink, wink) possible to assist the bearded buffoon in destroying the US dollar and, most importantly, selling those Obama propellant bills and bonds to the fed, chinese, american banks, and, hopefully, joe 6 pack, in order to fund the important campaign work, excuse me, I mean economic recovery work that the Obama admin is committed to. The only thing jameroo asked for is for our good friend mary schapiro to keep busy by looking the other way investigating odd lot daytraders in brooklyn while the jpm trading desk uses that fed honey money to jack jpm commom into the fucking stratosphere. I guess the moral of the story is you better forget about the put crap and start going long jpm.
*applause* Very well done!
How dare you try and talk for my comrade DH. He possesses utmost wisdom and is a serious truth seeker--his DNA shows no ostrich ancestors--which means the sand in his hair is from a long ago surfing trip. There was one particular gene in question--the Garcia gene as it is known at HGSI--but it turned out to have an R-squared of .066 for all people born in that particular year. The Lennon gene was slightly higher but within the normal range. Care to give a sample of yours?
Truth be told, you need to stop banging Shapiro. We know your strategy--keep her coming until the last Viagra runs out. Then she might show up for work. That Linda Blair thing you do with her is amazing. Put it up on Youtube...the chicks love you even when she spews stimuli on you.
As for my dimon trade---it's investment grade with perfect clarity. No lasers here to brighten it up. Just wait, you and Dimon will make such a perfect pair that between the two of you, the Lincoln bed will be way too small. Better ask for a kingsize bed because you can keep this orgy going on for months. I mean seriously, BB doesn't need to get laid--he has an AP for that--but you and JD will be like drunken sailors awash in amazing liquidity. Sail on, sail on, sailors. Don't forget the lube--you're gonna need it.
Jamie and Rahm went up the hill to fetch a bailout for Morgan.
Jamie fell down, upon his crown, and Howard's fortunes were golden.
Enjoy it while you can Rahm,
Damn, I hope I am forgiven for the other thread action then Howard......
We're just fooling around. Of which do you speak, Miles?
beautiful Howard! starts my day off with a much needed and welcome laugh of approval! love the Garcia and Lennon take....2 of my very favorites.
I have to say that was a comprehensive and penetrating speech, Keep the good works flowing..
What does Ahnold have to do with this, Idiot. And, Issa is trying to generate support to audit the Fed.
Barbara Boxer is a joke and you take every dem in Cali and flush them all. They are all a waste of time and space.
Sounds to me like DH was doing his best RHAM-bo impression.
"barbara boxer becomes the next governor of california."
A) You're giving me nightmares.
B) We have right wingers? Impossible. We are a bellwether (code for progressive)
IOU for that one. Thanks!
You've got serious typing issues. What happened? Too much time in the jungle?
I may be wrong, but I suspect that neither you nor deadhead got the message. Kudos to Howard...
PLUS, it's hard to type when your hands have been cut off...
Interesting that you knew that detail about him,,WFB See you later aligator.
You forgot the recycle of the old favorite - Investment
I like "juice", as in "The PPT juiced the Dow and SPX today in the last 30 ninutes of trading."
jeez somebody just junked all these posts. get a life, whoever did it.
Whoever flagged you as junk needs to realize their frontal lobotomy was "just a bottle in front of me". Nuff said. It's only Monday.
It's a 'job creation initiative'.
Which is but an add-on module for TGD 2.0
Well, we know it's true. AMERICA.. FUCK YEAH!
Tips: tips [ at ] zerohedge.com
General: info [ at ] zerohedge.com
Legal: legal [ at ] zerohedge.com
Advertising: ads [ at ] zerohedge.com
Abuse/Complaints: abuse [ at ] zerohedge.com
Advertise With Us
Make sure to read our "How To [Read/Tip Off] Zero Hedge Without Attracting The Interest Of [Human Resources/The Treasury/Black Helicopters]" Guide
How to report offensive comments
Notice on Racial Discrimination.