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Here There Be Big Nymbers (Sic)
The earlier discussion of CDS, Einhorn, and the US UST-CDS basis trade, sparked a flurry of queries on the topic of "really big numbers." Therefore, even as ZH staff awaits the most recent data out of the BIS, we present for your numeric (in)comprehension pleasure lots and lots of zeroes. The chart below summarizes the biggest relevant numbers currently out there, appearing as pixels occasionally on every single computer in the financial world. And what does it say? That the total notional value of all OTC derivative contracts as of the most recent count (sucks to be on the recount committee), was $592,000,000,000,000.00 at the end of 2008. Fear not: this number is actually a reduction from the most recent previous read of $683,700,000,000,000.00 in June of 2008. Well wait, that thing we said about fear not, ignore that: because the net notional, or the market value of all OTC contracts, i.e. what someone (cough taxpayer cough) would be on the hook for when the Fed's plans go astray, increased by 66.5% over the same period, to $33,900,000,000,000.00. Like we said, big numbers - and this is just OTC. The real number includes regulated exchanges, and to estimate that, double the numbers above. In totality, the "sidebets" on everything from interest rates, to F/X to corporate default risk, amount to about $1.3-$1.4 quadrillion (that's 15 zeroes before the decimal comma) in terms of uncollateralized liquidity (think inflation buffer): take all those zeroes away and the value of the dollar would go down by 1E10-15: you listening yet American middle class? And the actual exposure, or "money at risk" is roughly $60 trillion: a number which is about the same as the world GDP if one were to remove all the various stimulus programs. Take away Goldman, JP Morgan, and all the other wannabe BSD's, and this is what you end up with: the heart and soul of the Too Big To Fail monster itself. And there is no way on earth to stop that mangled, mutated heartbeat without destroying the very fabric of both our capital markets and societal system. Please give the Federal Reserve a golf clap for this truly amazing accomplishment.
So with everyone and the kitchen sink focused on CDS and the neutron bomb that they undoubtedly must be if even such anointed shamans of CDSology as David Einhorn (one wonders, will David donate the billions of dollars he has made while trading CDS to charity?) say they are evil incarnate, here is the truth about CDS courtesy of the Fed's Fed- the Bank of International Settlements.
The volume of outstanding CDS contracts fell 27.0% to $41.9 trillion against a background of severely strained credit markets and increased multilateral netting of offsetting positions by market participants. This was a continuation of the developments seen in the first half of 2008. Single-name contracts declined by 22.8% to $25.7 trillion while multi-name contracts, a category that includes CDS indices and CDS index tranches, saw a more pronounced decrease of 32.7%, to $16.1 trillion.
Despite the lower outstanding volumes, the gross market value for CDS contracts increased by 78.2% to $5.7 trillion as a result of the credit market turmoil. Gross market values grew 95.6% to $3.7 trillion for single-name contracts and 52.5% to $2.0 trillion for multi-name contracts. [As noted previously, the $5.7 trillion number has since collapsed to under $3 trillion as per most recent DTCC data].
Greater use of multilateral netting during the second half of 2008 also resulted in a change in composition across contract types (Graph 3, left-hand panel). Amounts outstanding of multinamecontracts fell 32.7% to $16.1 trillion, while the 22.8% decline in single-name contracts to $25.7 trillion was somewhat smaller.
The composition across counterparties also changed during the second half of 2008 (Graph 3, centre panel). Although the amount of CDS contracts between reporting dealers declined 24.4%, this was smaller than the 29.8% decrease in outstanding contracts between dealers and other financial institutions and the 47.7% drop in contract volumes between dealers and non-financial institutions.
Developments in gross market values across counterparties reflected the uneven declines in the outstanding volumes for the different market segments (Graph 3, right-hand panel). The market value of contracts between reporting dealers grew by 89.3% to $3.2 trillion, representing 56.2% of the total market value of outstanding CDS contracts. The market value of contracts between reporting dealers and other financial institutions increased by 66.3%, while the market value of contracts between dealers and non-financial institutions was 51.0% higher.
Less than $3 trillion? I mean, how is that even worthy of an FT op-ed? Most people won't even bend over to pick up a $3 trillion bill on the street: sorry - if it doesn't have a quint-, or at least a quadr- in front of the -illion, people frankly don't give a shit, thank you Tim Geithner. Trillion is just so..... pre-Obama.
Yet where it gets moderately interesting is when analyzing Interest Rate derivatives (swaps, options and forwards), not only because the numbers suddenly really perk up, but because of the $420 trillion in notional OTC total, about $200 trillion is held by none other than the usual zombie stooges: Goldman, JPM, BofA, C and WFC. Do you see now why the Fed will kinda, sorta always and forever be forced to bail out this unholy pentagram? The shitstorm as a result of the collapse of one or more of the five major spokes of at least $420 trillion (and as much as $840 trillion) in IR derivs would basically wipe out anyone and everything in its path. No exceptions.
BIS on Interest rate derivatives:
In the second half of 2008 the market for OTC interest rate derivatives declined for the first time, after recording an above average rate of growth in the first half of the year. Notional amounts of these instruments fell to $418.7 trillion at the end of December 2008, 8.6% lower than six months before (Graph 2 and Table 3). Despite the decrease in notional amounts outstanding, declining interest rates resulted in a notable 98.9% increase in the gross market value of interest rate derivatives, to $18.4 trillion. [yes, that is a lot]
The amount outstanding of interest rate swaps decreased 8.0% to $328.1 trillion. Outstanding volumes of US dollar- and yen-denominated interest rate swaps remained virtually unchanged relative to the previous quarter. In contrast, interest rate swap markets denominated in euros (–10.6%), sterling (–24.2%), Australian dollars (–27.8%), Canadian dollars (–16.7%), Swedish kronor (–21.2%) and Swiss francs (–6.9%) all saw declines in the amounts outstanding.
The gross market value for interest rate swaps – the largest market by far – grew 105.7%, from $8.1 trillion to $16.6 trillion. The most significant increase took place in the US dollar swap market, where the gross market value surged 201.2% to $9.3 trillion. [gee, whose favorite Federal Reserve was singlehandedly responsible for this dollar swap love explosion?]
Outstanding volumes of options contracts declined 17.5% to $51.3 trillion. The gross market value of options grew by 51.3% to $1.7 trillion. The amounts outstanding of forward rate agreements (FRAs), the smallest of the interest rate derivative segments, remained stable at $39.3 trillion, while the gross market value of outstanding FRAs grew 74.4% to $153 billion.
Thus net notional exposure in IR land is nearly $20 trillion or almost double the US GDP (or triple if one excludes the impact of Obama funny-money). So why are we reading again how CDS is anti-social? By that logic IR swaps, sloshed around by the JPM-Goldman-BofA trio of Mutually Assured Destructors, is the pinnacle of delusional, schizophrenic, psychotic behavior. Which is not to say that the CDS' destructive impact should be underestimated. On the contrary: CDS, when handled by the current group of greedy, risk seeking idiots, will undoubtedly destroy the world. It is just a matter of time. However, to keep things in perspective, how about we also consider Interest Rate swaps, whose numerical danger is more than 5x that of CDS (again, really big n(y)mbers here). And we haven't even touched on FX, commodity, and equity derivatives.
Which brings us to our point: thank you Mr. Einhorn for finally starting to focus people's attention on one of the many facets of the Fed's uncontrollable liquidity Frankenstein. CDS, while destructive, is merely the appetizer. What will truly annihilate financial markets are all those instruments that are in place only to perpetuate the myth that a 5% interest rate in 30 year Treasurys is somehow exorbitant (based on a quick back of the envelope calc, should prevailing interest rates move higher by 1%, the net IR exposure will rise by $3 trillion... in the wrong direction... at an exponential pace). Yet what better way to keep rates where they are than than to tell China: "Hey guys, you bust one auction, and this spring loaded balloon full of $420 trillion pieces of worthless Washington feces will blow up right in your face (and take us all down with you)." In essence this is an amusing revision of that old fable: the Fed owes the world a few billion here and there: well, Ben, you are out of luck, "You're Fired"; the Fed owes the world $1.4 quadrillion in naked and worthless pieces of paper (whose nudity will become apparent the second someone calls Bernanke's bluff) and the Fed owns the world.
It is, Mr. Einhorn, unfortunately as simple as that. Which is why may we suggest after you are done with your philosphical anti-CDS crusade, that you take a long hard look at this BIS report and consider just who your friends in the business are: something tells us that of the JPM/GS/BofA trio you Prime with at least two of them. If you really want to make a stand against those who are abusing weapons of financial annihilation, maybe you can demonstrate your seriousness by cutting all prime brokerage relationships with Goldman and JP Morgan. Then, and only then, will we, and everyone else, know you are willing to put your money where you mouth is (and where your CDS P&L used to be).
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the only answer
http://www.youtube.com/watch?v=HMBd2PWMUcU
only answer
http://www.youtube.com/watch?v=HMBd2PWMUcU
No no no no no no no no. If you do a big blowout like that then all the remaining rat bastards, this biblical plague of human vermin locusts, will hide behind their Xe-men and lay low.
Accidents, misfortunes, and WTF-was-thats should befall each of these treacherous, treasonous bastards, slowly, unmercifully and inexorably depleting their syphilitic-brained ranks until they, of their own volition, rue the day they were spawned and in one final act of unremitting selfishness, off themself.
See some of my other posts on this thread. I'll give you style points though...
Doesn't matter.
I was aiming for panache, but I'll settle for style.
It always matters.
But, we do need to get on with it.
-UR
To those about to revolt,
we salute you.
The esbat at Goldman Sachs and the Fed would seem to me to pose far more danger to the American way of life than
Al-Queda.
A deployment of American forces in Wall Street rather than Afghanistan would seem to me to make far more sense.
A variety of charges ranging from market manipulation, false accounting and violation of the Constitution under Rico might be found to be appropriate, but perhaps first detantion in Guatanamo bay might be thought the best couse of action.
Geez, chumba, while I admire your idea (always farm the dangerous stuff out) I feel my original idea --- using incendiary-armed remote-controlled toy cars and airplanes --- would prove much more entertaining.
Death by Mattel....
A doomsday device has been created with the TBTF on the deadman trigger.
If this is reality, it must be defused.
A variation of the China solution should be considered. The most odious elements of this financial complex must be dismantled, contracts unwound or otherwise voided.
This financial house of cards is, if anything ever was, against human public policy.
A new multilateral organization will need to be created to execute the reset. The existing institutions (IMF, BIS, UN, central banks, etc.) will have to be subordinate to the Resolution Authority.
What a strange dream.
Wow, Tyler. Before I could even finish reading your opening on this topic I actually gave a "mock" golf clap, and then I actually saw you suggest it in the last line. Good stuff, TD.
This is a complete nightmare after reading this. Is there anyway for us to avoid the complete meltdown? This looks like the end of civilization. anything we can do? anything? Is that for real, the year of 2012?
Kubler Ross, stages of grief:
1. Denail
2. Anger
3. Bargaining<---You are here.
4. Depression
5. Acceptance
so you're one step behind him?
I can't decide. I think there is some depression in these posts too, don't you?
Definitely detect the depression. Now acknowledged, you may move on to acceptance.
See how easy that is?
You'll feel much better once you have a few more ounces of gold in your safe. A foundation of wealth naturally begets a foundation of sanity and serenity.
I am Chumbawamba.
yes
(1) friends and (2) a sick sense of humor
seem to help
I like this site cause it combines the two
Yes, for sure; however I'm at acceptance. We're all fucked and now it's just navigating thru all this for survival purposes. Better to be ahead of the herd, rather than behind, or with them. This TD post is one of the most important of all IMHO. The blueprint is on the table for all to see. McCreant, I admire your ferocity this fine day. If only more had such passion... The dumbing down of the US has really taken its toll on the populace.
Welcome. It's about time you arrived. Drinks are in the next room, no alcohol spared. Abdul in the back will happily trade you your dollars for his gold. Says he gets a special deal and is willing to pass on the savings. Don't know what he does with the FRN, but then we don't care, and Abdul seems happy with the arrangement.
I am Chumbawamba.
Thanks, Chumbawamba, I'll have a double please. When is happy hour?
It's always happy hour here!
I am Chumbawamba.
That's why I like posting here, its always happy hour or the restaurant at the end of the universe. I don't have to be good. Being good has been our problem. Or should I say compliant, dependent, conforming, pied pipered...
Hope should be strung up and eviscerated, split open from clavacle to pelvis. Hope is propping it all up. Hope is pacification.
Lose hope and find the way.
Bravo!
False hopes bind us to unlivable conditions.
Once we give up pounding on the closed door in front of us and look around, all kinds of possibilities (that have always been there) suddenly come into view.
Acceptance doesn't mean accepting you're fucked. It simply means the one direction you previously wished to follow is blocked. Now you're free to entertain all the other possibilities.
Just because you "accept" something doesn't mean that you have to like or agree with it.
"[...]compliant, dependent, conforming, pied pipered..."
The whole of society it would seem has PMS - pinhead moron syndrome.
[Ed. note: Is that redundant or just stupid2?]
Seen Johnny Rico lately? Doom?
MOU
Apologies if this is a misfire.
MOU?!? N was asking about you over at her place. [Ed. - at least I think it was N... - might have been EE on ZK. BTW, they have all just about walked away from CFN since JHK started calling his posts in] Doom is rumored to have left ZK, some kinda conspiracy dustup. Rico, geez. He's in love or something.
Damn. Miss ya.
I was sorry you stopped blogging. You are a good writer and not the echo chamber type. I told you I submitted your blog to WRH.
Sounds like I should check N's. I look over there from time to time to see the main post.
JHK, Keeerist! I go over on Monday to look, but honestly, the comments [walk away to get ill, wipe mouth, come back], good God the trolls have CON-troll. Not that I want to be all nice and sweet, but I can stand only so much redundancy. Got to be paid trolls, got to be.
Hang around. There is something brewing here that is not just typing. This is a good crew. I'm on a learning curve. It's fun.
Chumb - I hope you remember to look me up in The Second Room. I know you have listened to the sounds emanating from there. I am sure you will roll in after you ask the good folks How U Like Bass.
See yaz
Get your self a piece of rural land and build a small cabin. There is enough food in the forest for you to survive. Think like a squirrel. And wild onions grow everywhere in the Northeast. If you will be in Northern New Hampshire, I will be operating a pirate radio station.
http://www.littleradio.com/entry/how_to_start_your_own_pirate_radio_stat...
been thinking a lot about that lately. Starting to grow a lot and learning to grow through winter. Like these sites
http://www.prodigalgardens.info/index.htm
http://tinyfarmblog.com/
hey davey,
thanks for these...couldn't have come at a better time...researching LED grow lights this morning.
here's one back at ya (watch the powerpoint):
http://www.echotech.org/mambo/index.php?option=com_content&task=view&id=...
even if you got some land, there's good tips in there on how to maximize your yield.
on topic -- a good friend & a wise man wrote this last week:
"If you think there's a solution, you ARE the problem."
Thanks, this one's good too. Huge database of wild and cultivated
http://www.pfaf.org/index.php
and this one's decent for my neck of the woods - this guy knows his mushrooms
http://fat-of-the-land.blogspot.com/
Like the great leader Stalin used to say: "If you kill a person, that's a crime. If you kill a million, that's statistics." It is pretty much the same in economics. Not that long the Obravda Networks got all excited when Mugabe Jr. "saved" 99 million on paper clips or some shit.
Watch out now
http://www.desdecuba.com/generationy/?p=1123
Derivative are more like auto insurance policies than life insurance policeies. Saying all the outstanding derivatives would implode into a giant ball of hell is like saying all the auto insurance policies would do the same. Most derivative just expire as most auto policies just get renewed and never get paid out. I know this is a very basic comparison. People always die, cars don't always get into accidents(unless you live in New Jersey!)
but maybe the danger is not so much in the exploding derivatives, but it is their use as a lever to force the sale of our bonds at the prescribed yield to foreigners, allows this game to continue indefinitely. Perhaps that is why "deficits don't matter!" We can force the whole world to fund our profligacy indefinitely?
After downsizing the TBTF institutions, cut the government into smaller pieces too.
Both are TBTF.
Re big money, just let the denomination of the bill equal the number of zeroes,
and then a portrait of Alexander Hamilton or Andrew Jackson goes farther.
Unfortunately, Gubmint has already devised an entrenched system for disguising its TBTF characteristics. Think : Fed, State, County , City, Borough, Township, Authority, District, Public Utility, etc.
All take a piece out of our collective taxable arses.
We already have that.
They're called "States" and "Counties".
Control *will* revert back to the local level, wait and see...
way past depression, but still have the anger. what did I do wrong?
when a bear attacks your camp, you don't have to be faster than the bear, just faster than the slowest camper. thats the best I can do for sick humor.
Dood, you've just correctly defined "capitalism."
Now, for an intensive course in economic democracy get thyself over to ied.info
And read Henry George, who really understood stuff.....
Obama USSR - United States Socialist Republic T Shirt:
http://www.zazzle.com/obama_ussr_united_states_socialist_republic_tshirt...
Disclaimer : I am in no way associated with the seller nor do I get any commission from sales.
BTW, this is something that Jim Sinclair has been teaching us since about 2006 or thereabouts.
http://jsmineset.com
I am Chumbawamba.
Does this have any relationship to, or bearing on, the recent decision by China to allow its banks to repudiate derivatives contracts?
while I agree having more derivatives outstanding than are necessary to hedge any positions is not a good thing, all is not lost. Despite the fact that the notional numbers are mind-numbing, that is just the underlying and that does not move. The monies that move are the adjustments based on that notional. So even when someone blows up all that the counterparty is stuck with is the original interest rate risk they had to begin with, they are not out the notional amount.
what a relief, theres only 40 trillion at risk not a quadrillion. I feel a lot better now
As TD mentioned above,
"there is no way on earth to stop that mangled, mutated heartbeat without destroying the very fabric of both our capital markets and societal system."
Which means that "a" new societal system (bigger more asymmetric Ponzi scheme) will be created. And, it will have to be supra-national because the derivatives are international. The world must overcome the mutually assured financial destruction blackmail through agreed upon international laws and solutions. Hence, the logic for a one world government.
The problem with a one world government is that when its new, bigger, more asymmetric Ponzi scheme reaches a breaking point we can no longer create a bigger Ponzi scheme to replace it. Then, it is game over for globalization and the gravy train of prosperity it brought us. We forgot there were risks to economies of scale.
Reject the idea of contributing to the new world order.
We have some time. The solution is simple, as in a simple life. Smaller, off the grid, self-sufficient, symmetric communities can survive as long as we are not storing amassed wealth. Amassed wealth will be taken from us or we will die defending it, sooner or later. Free it up.
Might be a good time to start working with our hands learning low tech skills to shelter and feed ourselves. Who knows, it might even be a better life than the rat race. We have the power to change our minds.
Though it might be best to forget about the "free love" part of the 60's communes ;>)
I am bob's faith, hope and love
Heh...
1% of 1.44 quadrillion is 1.4 trillion.
Which means it takes about 23% of the ENTIRE WORLD'S GDP, JUST TO MAKE A PAYMENT ON THE INTEREST (ASSUMING A 1% RATE).
I give gold two years before it's unpurchasable by any fiat currency.
CD: I just threw up on my Prada riding boots...I don't want to clean them...I just don't care...I can't feed the horse...I'm going Rogue...;-(
The horse cares. That is all that matters anymore.
I know...need to up level of meds and be grateful for the coffee and cigs...;-(
awww. Take care lil sister. Have a 'boro, a cup of fresh Peets coffee and a smoke. Luv ya.
with Miles here.
Folks like Miles and Deadhead here show ya that not everyone is a squid. They matter, the horse matters. And so do you.
backatcha!
Sqworl, a feeling of deep sadness and desperation is expected when facing a desperate situation. Essentially we are witnessing the death of a part of our self. The key to mental and emotional health is understanding that this reaction is normal and we can quickly recover if we chose. We don't need to internalize what is entirely an external event controlled by others who care nothing about us.
It's only as permanent as you wish it to be. We all have the tendency to fight it, as if by experiencing it we'll be consumed and never released. So we fight it tooth and nail and by doing so make it so much worse than it really is. This isn't a death sentence but rather an affirmation of life.
Being the sufficiently complex and adaptable individual that you are Sqworl, you're perfectly capable of feeling extreme despair and unimaginable joy at the same time if only you'll allow yourself to do so. Coming to grips with reality is not the end but the beginning of a much more rewarding life. A cherished part of you has just died, something you've nurtured for a long time. At the same time a much more important part of you was just born. Hatched I like to say.
Your false hopes previously bound you to an unlivable condition. Living a life of quiet desperation, feeling powerless over conditions and events you did not create but felt dependent upon, is no way to exist. Now that you're freeing yourself from those false hopes, you're also free from the emotional and psychological manipulations of the masters of the universe. Once you cut the self imposed puppet strings that previously bound you to that unlivable condition, you're now free to live with much less fear and anxiety.
The only way "they" can possibly control you is to convince you you're helpless, a powerless victim with nowhere to turn. But their psychological operation has failed and now you're free. Once you let go of the false hopes that froze you like a deer in the headlights of life, you soon recognize that you're not nearly as bad off as you thought you would be, that there are many other ways in which you can cope and even prosper.
You're no longer an emotional hostage, to be trifled with at the whim of others who care nothing of you and your situation. You no longer see this as "your" mess but "there" mess, you no longer take responsibility for actions you did not support or agree to. You no longer internalize what is completely external in nature. You are free to explore alternatives because you're no longer paralyzed with fear, waiting for the car to run you over.
This awareness won't happen all at once and there'll be residual emotional sadness and even a sense of loss for the false hopes you carried on your back for years. We all need to recognize that we've been emotionally and physically trapped in an abusive and domineering relationship with our government and other authority figures. There is bound to be some difficulties as we recover from the "shock and awe" emotional assaults we've been subjected to.
But the process has started and with it the freedom to take back your life now that you're no longer dependent upon others for your emotional, spiritual and physical freedom.
Welcome to the other side.
Sqworl, the journey is an amazing process of triumph and tragedy and I am coming to discover that the day will arrive when you realize that you have found the other side. I slip back, often. I now can more fully appreciate that process from your experiences as one who I had thought had reached the other side in some sort of permanence. I now realize thanks to you Sqworl & CD that the process of acceptance is much more than less and does not take on its true dynamics until we are in community, one with others.
Thanks for this awesome bit of introspection.
All My Best
amen... and be careful. the ego has great resilience, it will use logic and political obeisance from either side of the spectrum, to convince you to follow the herd. it might even trick you into believing that by "being aware of what is really going on", that that in itself is enough to transcend it. But it is Not. The only way through the barrier is to Tear It Down. And it does not have to include violence, it is a non-violent act to sit down and do nothing, but really do nothing! do not go to work, do not pay your usury, do not do anything but help your neighbor, help them and they will help yours. In the end, revolution will come, and all that means, but it will not be your doing, it will be the great Undoing of all that is wrong with this particular life as a collective, in this time and this place we choose to call the twenty first century of civilized humanity. humanity will survive if it should.
"humanity will survive if it should."
And there it is. The form of survival we have chosen up till now is corrupt. It leaves us out of touch with ourselves and our own needs, the true nature of our family and friends, and nature. Our lives have become derrivatives of reality, rather than real. We are hurting ourselves.
We can do better, we have to trust this is true. We don't trust it because we have never had permission to explore it. We were born into this mess and we did not ask for it.
Good comment.
good comment & good response.
to rid oneself from a festering parasite, one must undergo a cleanse. however, one must be diligent in cleansing not to introduce more toxins when the body is in such a fragile state. however, if the cleanse is done properly & all parasites removed, one will feel a lightness of body and clarity of mind so that one feels as if they are a new person and that anything is possible...
CD, This is the most eloquent post I have ever read describing the current situation and where I have lead myself...may I quote it in my blog? I dont have many readers, but this post ties everything together, emotional, spiritual, economic. Even with my degree in psychology and social work experience, I cannot produce better words or vision of reality.
Thank you!
"Trillion is just so..... pre-Obama."
(I love this line above!) Brilliant, TD, ultra-brilliant! No one and nothing can improve on your exposition today.
A zillion thanks, big guy.
[Not to pick at lint, but: "..about $200 trillion is held by none other than the usual zombie stooges: Goldman, JPM, BofA, C and WFC."
Unless I misread that OCC report, wasn't that Goldman, JPM, BofA, C and Morgan Stanley???
An important point, since the unholy trinity behind most of the malevolence is Goldman, JPM and MS.]
As TD mentioned above:
"there is no way on earth to stop that mangled, mutated heartbeat without destroying the very fabric of both our capital markets and societal system."
Therefore, "a" new societal system will be created. It will be supra-national because the mutually assured destruction blackmail of the derivative markets is international and under no national government's jurisdiction. In other words, a one world government will be formed.
The problem is the asymmetry of societal systems is perfected within a one world government. Social asymmetry is not simply theoretically chaotic. When we amass, or centralize, authority and/or resources we become more vulnerable to physical annihilation. Centralization breeds specialization of function, glorifying economies of scale and discounting risks of scale. It is myopic. It brings a gravy train of prosperity at the expense of dependency on an asymmetric system. It is asymmetric because it is one unit, one world, one system. If one part of the system fails we all are doomed. The more units and the broader based the skill set of those units, the more symmetrical a society. Naturally, a symmetrical society is limited in scope but indestructible. If one third of the world is wiped out by catastrophe in an asymmetric society, the other two thirds would soon follow. If one third of the world is wiped out by catastrophe in a symmetric society, the other two thirds would be unaffected. We would do well to pursue symmetry.
What is the correct balance between economies of scale vs risks of scale? How much asymmetry is acceptable in a societal system? These will be questions for the future. But not before the one world government has its place in time. I want no part of the coming new world order.
For me, the solution is simple, as in a simpler life. Go Galt! Perhaps we should begin learning low tech skills in sheltering and feeding ourselves. Who knows, it just may be a better life than the rat race. Smaller, off the grid, self-sufficient societal systems will survive as long as we do not amass wealth. If we amass wealth, it will be taken from us or we will die defending it, sooner or later. We can amass the potential for wealth in skills instead. Then, we can trade and consume the wealth as it is created without storing it. Just In Time rules!
It might also be best to give up the “free love” aspects of the hippy communes ;>)
Isn't that what they want? For you to embrace your impovrishment. Love your servitude. Not that I disagree with most of what you say, but doesn't it burn you up that you have to hide out in cabin in the middle of nowhere to have freedom, while the squid fiatcos pukes party it up on private islands and ocean going yachts?
Tallystick,
Wow. Put like that, wow. Can I let them just leave me alone and go do that?
I need to get back to you on this...
I am disturbed.
MsCreant, please dont "accept" that we are only going through the KR stages of grief! HELL NO!!!!
Sure i can understand this could be viewed as the "anger phase" of KR's stages of death and dying, but for God's sake, why do we have to accept our current country's constructs as a force as large and impossible to conquer as death--NO...PLEASE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
I needed that slap, thanks.
But somewhere here CD does this idea a real service. Accept means not knocking on this door any more, and once you stop knocking, your attention is free to realize other doors are open. The question here becomes, do we expend the effort to take back what has been stolen? What do we sacrifice to do it? Is it worth it? Can it even be taken back? Is what they stole an illusion? Is it "real wealth?" The poster below brings up this issue very effectively.
I do know if someone is hurting those I care about, I need to stop it.
I submit that we were never pounding on the door that would have led to us taking back what was stolen.
We've been pounding on the door that leads to them returning what was stolen to us, to them ceasing what they're doing without significant involvement by us. We've been hoping that the legal and regulatory "system" would function as we were told it was designed to do.
Now that we are beginning to accept that this will probably not be the case, we are free to pursue other avenues, such as taking back what's ours and not waiting for someone else to give it back. Or as you say above, recognizing that what was taken wasn't real to begin with.
Let's move on, which can only happen when we're no longer stuck in a dead end.
I like my family, and wherever they go, there I am. I like my friends, and wherever they go, there I am. I like me, and wherever I go, there I am. So, no I am not jealous of vampire squid. I know how they live their impoverished little lives, I have lived it and I like my life better now.
After the first million, its just score keeping. So, I quit at 30, traveled the world ever since, recklessly indulging every appetite. And you know what happened? Wealth multiplied anyway. But even as the money grew, I found I needed less and less stuff. I have played with royalty and paupers, and the paupers were always happiest.
I am 51 now and just had a baby boy. The idea of living off the grid surrounded by those I like sounds very appealing to me. Most of mine do not see what I see yet, so I tell them it is just a ranch, an option for us to enjoy. But it is there when the time comes. They are a diverse group and will enventually bring a diverse set of skills to our little economy. We will lack nothing needed.
It is not about stuff anyway, it is about relationships. Love all, but shed the parasites and spend time with those you like. And in the process...starve the beast. Well, that's just my not so humble opinion.
Go Galt!
I like the way you refocused this. What is real wealth? Do the vampire squidz have it?
But if they are hurting those you love...if it was directly visible...I doubt you would easily just turn the other cheek.
Situational dependent. Sometimes it is best to slow play. Especially when going up against an adversary with vastly superior resources and if the adversary is so confident or constrained that you are permitted time to properly prepare and execute. Remember, chance favors the prepared and the knowledgeable. Know your enemy and know yourself.
bob said... I have played with royalty and paupers, and the paupers were always happiest.
Bravo Bob, I have fond memory's of reconing Costa Rica and the love the locals give out to friendly visitors. I've been galting for some time my self till I found my patch here in Skippy land, far way from the range of wild small arms fire (see hunting season in the USA). The people of poor mental health that you speak of will eventually turn on each other and cannibalize them selves, I personally don't want to be in the middle of that fracas.
Your idea of surround your self with talent is a win win for everyone involved and nothing beats a good team..eh.
MsMiscreant you are truly a selfless hero (again a hot trait!) it seems your selfless actions in taking that bullet has saved many from a fate worse than Muskrat love, the fed is truly evil, the diabolical soft sounds of the Captain and Tannille are not to be trifled with, seems TD and crew were able to disarm and remove_ minds intact_ great EOD crew ZH. Sorry my Army SEAR training protected me, but I forgot about the others MB, and will keep it in mind going forward, amends.
Two last things if I may.
#1. For those of you that wish to arm your selves single or semi- auto are best, pray and spray eats ammo and it sucks to empty a clip and not hit shit, plus the look on the bad guys face as you reload will be priceless. Drop the 9mm for .45cal in handguns, 9mm talks stay-down where as .45 demands it, best of both worlds knock down vs accuracy. Combat machined, matte black, beaver tail hammer and ambidextrous safety's so if hit in one hand you can always reach around your back and still fire.
#2. TD A good friends father in-law a Newport, Ca. lad was an investor/bankster for the USA government, rolling in the bucks too, all the bling! Now after hanging with said lad (many times over a number of years) and having fun the old tongue got wagging. So my question to you is how much of the governments oops I mean the citizens money was invested in these now stanky financial instruments as a means to fiancé its cogs and gears, games? I sayin how far do you think the penetration is ie pinky pie or up to our shoulder to get the calf out [?] and is that part of the big problem. We/our Government are inextricably intertwined, super glued in an incestuous relationship with the outcomes of the IBs, with regards to things that go boom if touched to soon.
Skippy...Great article ZH, love turning on ppls to ya and checking back in a week or two, looking for cerebrospinal leakage.
Numbers bigger than a Cheech & Chong Big Bambu rolling paper.
Everyone must get stoned, really stoned to believe in the astronomical
vastness of those numbers.
No matter how big number innumerate you get, it is impossible to keep up. Ms Tomlin.
Well, well, at least now I know why gold has been going up lately.
Fantastically well written!
" without destroying the very fabric of both our capital markets and societal system..."
So what. The sun will still come up tomorrow, just like it has for the past 3 billion years. BFD, let it all come apart!
We can do better than this, but first we must kill the beast.
This probably belongs on the Einhorn post, but since this is closely related and I needed some time to digest and think things through, I put it here.
I'm not saying the current state of affairs isn't bad, just that things are never as wonderful or as horrible as they seem.
Everyone thinks CDS is dangerous because counterparty risk is the ultimate reality, and the the nature of the striking event. Namely, a binary event: a default or breach of covenant. A naked position in CDS means that you profit from such an event; thus one conceivably has an incentive to do things or not do things that trigger the event. Should an entity force such an event, there are serious dangers to the entire system. The risk is that the economy is an interconnected network of firms, financiers, and consumers. An extreme sigma event could do unanticipated damage.
Interest rate swaps are not like this. They are not binary in the large: they are positions that are taken across what is essentially a continuum of yield points. And every position can be hedged with an offsetting position as one's contingencies change. This is one reason why the market is so big. You can plaster over realized adversities with yet more notional hedges.
Also, the nature of these risks are not unidirectional: there are positions based on TED spreads, which are sensitive to curve flattening; there are volatility-based positions; on and on. All considered, netting out to something "close" to zero (relative to 50 gazillion notional) isn't totally crazy.
To me, it seems there are two major problems. The first is the lack of legally binding clearing mechanisms make for another black swan, as the refusal to honor contracts would break the whole house of cards. That may be the whole point and I missed it. The second is our government's willingness to flirt with disaster with respect to a dislocation in the treasury market.
The sheer size of the notional makes a Fed backstop of counterparties non-credible. So they must support every treasury auction with bid support. Price stability is no longer an objective of the Fed.
"The sheer size of the notional makes a Fed backstop of counterparties non-credible."
Quite literally, the money quote for the entire system. Doesn't matter what nationality you are.
All central bank backing is bullshit because it is all fiction to begin with because it is:
1. Fiat currency
2. Fractional reserve lending
3. The levels of simulacra are on an order so far removed from reality that it is disconnected from reality, entirely.
Stored value represents real work done, something was done to something to transform it into having a use value, or into being a commodity (exchange value). Money represents stored value. FRN represents money. Computer pixels represent FRNs. Contracts represent the committed flow of computer pixels (which now represent capital, at least thrice removed from something real). I think the further you get away from what is real (the actual labor that went into the store of value) the more easy it is to manipulate it because the actual moving of the value can happen on a computer screen rather than in the real world. In the real world, if you were moving those stores of value around, more work would be happening. In VR they can do it and forget that it is real, and come up with formulations that are absurd and removed from the CONSEQUENCES that would manifest in reality.
Except they are manifesting, here, now.
I hope someone follows what I am seeing. The problem I am trying to peg is the contracts which represent the flow of pixels which several times removed are supposed to represent labor.
Derivatives are simulacra.
"I think the further you get away from what is real (the actual labor that went into the store of value) the more easy it is to manipulate it because the actual moving of the value can happen on a computer screen rather than in the real world."
MsCreant,
The above sentence is your money quote and summarizes the situation perfectly. This is what happened when the Nixon administration rejected the international Gold standard and instead convinced the world that Virtual Reality Fractional Reserve Notes held no bounds and thus anything was possible.
Of course, once freed of the earthly bounds and gravitational pull of that silly store of value called Gold, the Wizards of OZ along with the Masters of the Universe could create heaven on earth. The rest, as they say, is (or will be) history.
Derivatives as side bets on the price of real goods are and always have been tools of manipulation. Look at how many derivative contracts are cash settled. This mechanism distracts capital from directly affecting the price of the underlying. As the size of cash settled derivatives markets exceeds the underlying physical market, it begins to have more influence over the price than supply and demand in the real economy. Imagine what the price of oil would be if all the liquidity in oil could only go into the physical market. Gold is another good example.
Derivatives are less a source of inflation than a way of hiding fiatcos inflation as they provide a liquidity sink. As long as the physical and derivative markets can be arbitraged, this scheme works. Delivery failure in the underlying is the achilles heel.
Note the concentration of derivative contracts in the TBTF govt sponsored banks is a mechanism for unofficial price fixing, just as inflantion is an unofficial tax by FED fiatcos printing.
Wow! I think I understand, but since the new reality is so uninleligible, I have no Fucking Idea that makes sense.
Spend some time formulating your own considered opinion. I look forward to observing your maturation process. I can say that I have found MsCreant's observations immensely worthwhile material to aid in my own contemplative process.
Without exaggeration, not a day has passed where I haven't sat back after reading an ZH article and comments section and shook my head in amazement at the various intelligent views presented.
How many times have I thought I've researched a subject reasonably well only to find 2 or 3 additional points of view completely contrary to mine and all just as valid.
Thank you Zero Head community and in particular its crop of regular posters and contributors.
How many times have I thought I've researched a subject reasonably well only to find 2 or 3 additional points of view completely contrary to mine and all just as valid.
CD - I think that is the foundation upon which debate and consideration that contribute to an informed society rests. The willingness to not only hold up the mirror, but to welcome the process being rigorously applied to ourselves as well. Couple that with the prophylaxis that rule of law should provide to all with favor no none and we have the materials for what the founders of our republic deemed responsible self governance.
He who asks a question may be a fool for five minutes, but he who never asks a question remains a fool forever. Confronting a truth that is contradictory to a prior understanding may in the short run harm one's ego (and why many people choose to preserve their ego rather than seek the truth -- Kool Aid, anyone?). I find that many of those that comprise ZH community choose to humble themselves if it means that, in doing so, they will gain a deeper understanding of reality. I value the quality of exchange between the users on this site as much as the content that this site presents.
Taking nothing away from Tyler, Marla and the contributors, it's in the comment section where the real intellectual Gold can be mined. All writers and writing is basically propaganda in that they seek to present their point of view in their own manner under controlled conditions. Their article (or comment) isn't a conversation or a debate but a lecture and the only way to absorb it is to simply listen. Nothing wrong with this per se.
Before the reader jumps on me, please recognize that there are different types of propaganda and entities other than government create propaganda. Consider what corporate product advertisements really are. Look carefully at text books, TV programs, newspapers, fiction and non fiction novels, books and articles. Look up the word propaganda and consider that since it's most often used to describe information produced by governments for nefarious purposes, that doesn't mean it isn't used by others. Greenpeace and the Sierra Club produce propaganda just like the US government.
But the comments sections strips away any possibility that the article will be one sided and narrowly viewed. People say ZH and it's posters are narrow minded and single issue orientated. But there are dozens of articles a week that spur hundreds of impassioned comments (such as this article) and this is were the learning takes place, in the friction and heat of conflicting points of view.
Wow! You guys are getting pretty sappy!
I'm still trying to come up with a good avatar and handle that have 1) nothing to do with each other, 2) are funny alone, and 3) are priceless together - much like Tyler's analysis and so many veteran (recency bias) posters here.
I've spent over a year trolling (reading, not flaming) various websites, and even though most of this info here is over my head I can't get enough.
The comment section is the invaluable reality check - I find a lot of integrity here - and more immortal comedy than cable TV.
yeah, so much for fight club ;~)
agreed, this thread is pure gold.
revelations remixed in real-time.
mucho gracias por todo.
So we're getting pretty sappy but you agree?
"I've spent over a year trolling (reading, not flaming) various websites, and even though most of this info here is over my head I can't get enough.
The comment section is the invaluable reality check - I find a lot of integrity here - and more immortal comedy than cable TV."
Sounds like it. Hurry up and get that handle and avatar. I think you'll find the regular posters will treat you with much more credibility when you can be distinguished from all the other Anon's. It helps when you have a history built up that shows us who you are and where you're coming from.
We won't beat you up for having a different opinion as long as you express yourself with some credibility and logic. We all learn from others. But we (I) don't trust Anon's that all look the same. We have seen in the past 2 or more Anon's that appear to be the same person based upon writing style but are taking different positions.
So we really don't wish to waste our time talking to what could be ghosts.
Perfect.You rule...and I mean that completely.Excellent post.
As an aside, I note the junk marker is running amok.The truth is so hurty!!!!
First they ignore you, then they ridicule you, then they fight you, then you win. Gandhi
The fact remains that violence begets violence and leads only to death.
Miles,
I ask that you consider your statement in a different light. Violence doesn't always beget violence. In fact, the reaction to violence is most often submission in a non violent way. The government often uses violence through the police and military and despite popular opinion and the propaganda of governments, violence is not always returned.
In fact, government violence is a very effective form of state sponsored terrorism that compels most people to pull back and comply. I understand where you're going here but one of the reasons governments peddle hope is to pacify the population and convince them resistance is futile. A little violence used here and there is the exclamation point on the "resistance is futile" concept they wish to drive home.
We are in an abusive relationship with our government and its minions. The reason we don't see or experience the violence that's always at the ready is because we have been pacified and don't resist. Thus there is no overt violence used against us. But the threat of violence is always present and an integral part of our calculations and thought process when we decide what to do or not do.
This is one of the reasons we are hearing such impassioned debate on this thread. Underneath all the anger and depression is the understanding that we simply can't pick up arms and fight back without meeting overwhelming force directed back towards us in a very personal manner.
I like to think that once hope dies, all that's left is action. The pain is still not great enough to compel us to bury our hope and take action.
CD -
A must read: http://mises.org/daily/3786
Ignoring the author's age, I could've sworn you penned that article.
You flatter me with the comparison. I read the article and while I have some minor disagreements with some of the content, I could hear myself in the article. Besides, I'm so much more handsome than Ben O'Neill. :>)
I try to visit the Mises.org web site weekly but there is just so much to absorb from so many different web sites (plus my regular 1-2 books a week consumption) that I'm in a constant state of frustration. I sleep 7-8 hours a night and work almost as many on a 6 day a week basis. After life's other chores, I have to chose between a social life or study.
For the past 4 or 5 years, there has been no social life. If I could find a rich spouse to support my sorry ass, I could one day die fat and happy with a book in one hand and my mouse in the other. One can dream, can't we?
1-2 books a week? Impressive considering your schedule and/or considering my reading speed. Any recommendations?
JM - your comment is similar to my thoughts on interest rate swaps (although I'm no expert).
The whole derivatives market is like looking into a mirror that is reflecting another mirror... to infinity.
It's almost like the system is designed to obfuscate truth - which it is!
A fractional reserve banking system (THE FED) is BASED on a deception (your bank says they have 100 pieces of gold, when they only have 10).
All those derivative fractions fly into the sky of abstration, distorting a person's perception of anything more than a very limited, partial, scattered view of reality... Too many mirrors, illusions, and everything becomes incomprehensible.
This is the world we were born into - the failures of our fathers have brought us here.
Thanks SteveM and others for your comments.
I am completely in favor of fractional reserve banking. It implies leverage, and leverage is a good thing with proper risk management.
Most humans live better now than at any other point in planetary history. Whether one thinks it is because of technology or whatever, leverage has a vital hand in the endeavor.
Sadly, the last twenty years or so of central banking moral hazard has likely ended this latest round of experimentation in non-gold backed financial systems, but leverage will not go away. No one should wish for it to go away. If it does, the world will be several orders worse than any Dickensian nightmare you could conjure.
A couple thoughts jm...
You assume that it is because of fractional reserve banking that we live better now than before instead of in spite of it... correlation is not causation - I would argue that fractional reserve banking has been a negative.
Fact is: leverage would still exist under a full reserve banking system... all leverage is, is the ability to borrow money. Under a full reserve banking system, someone would still be able (and willing) to lend you their money... The difference is that the bankers would no longer be able to manipulate the currency.
You might find this video interesting: http://www.youtube.com/watch?v=Ta7q1amDAN4
Since FAZ and EDZ use swaps to effect their 3x bear position, could it be that if derivatives cause an implosion of the stock markets that holders of FAZ and EDZ will not profit as chaos will reign in the swap swamp?
perhaps most of the bear funds are thusway doomed. And since Obama&Pelosi will confiscate gold, only way to hedge the future is silver.
Silver and especially 40% Kennedy half dollars (1965-1970) be the way to go.
The problem is the same with all derivatives:
In THEORY derviatives serve a purpose as they make a market more complete, thus allowing people to hedge risks (by creating replication strategies). In theory derivatives help price discovery, as specific risk profiles can be priced by the market.
A complete market is desirable as it implies no arbitrage opportunities, or put differently every contingent claim can be perfectly replicated by using the available instruments.
This is all basic Mathematical Finance theory, or at least in Germany where I learnt it.
HOWEVER, in practice derivatives lead to the exact opposite. Our human nature loves gambling, thus it is perfectly clear that there will always be more speculators than hedgers, especially the more speculating opportunities there are available.
This means that derivatives START off being used for hedging purposes (the way it is meant to be). This is quickly perverted into increased risk taking. In addition, given that the actual risks cannot be calculated accurately (only by 'models' that all turn out to be horribly wrong at some stage) the enhanced 'price discovery' only exists in flashy WS brochures.
The result is that market participants take more and more leverage and risk through derivatives which they would not be able to do otherwise. Derivatives are the building block of the Global Casino that all financial markets have become.
To think that CDS are the only way to express negative vies may be right. But if an investor buys an unlimited amount of CDS of a single firm, and eventually brings the company down to its knees, this has nothing to do with expressing a view. As the 'view' is self materializing by the reflexive impact of the purchase of CDS itself.
In particular, MsCreant (excellent posts, by the way) as well as everyone interested....
USC 18, 242. Deprivation of rights under color of lawAs we can see, there appears to be a "bit" of some bad weather coming over the horizon and, in such case, we will be expected (read forced)
to accommodate and QE is not at our disposal. We really have to "work" for our "money". Here is some information some may find useful:
Whoever, under color of any law, statute, ordinance, regulation, or custom, willfully subjects any person in any State, Territory, Commonwealth, Possession, or District to the deprivation of any rights, privileges, or immunities secured or protected by the Constitution or laws of the United States, or to different punishments, pains, or penalties, on account of such person being an alien, or by reason of his color, or race, than are prescribed for the punishment of citizens, shall be fined under this title or imprisoned not more than one year, or both; and if bodily injury results from the acts committed in violation of this section or if such acts include the use, attempted use, or threatened use of a dangerous weapon, explosives, or fire, shall be fined under this title or imprisoned not more than ten years, or both; and if death results from the acts committed in violation of this section or if such acts include kidnapping or an attempt to kidnap, aggravated sexual abuse, or an attempt to commit aggravated sexual abuse, or an attempt to kill, shall be fined under this title, or imprisoned for any term of years or for life, or both, or may be sentenced to death. This from http://www.law.cornell.edu/uscode/18/242.html
Now for the real kicker. In law, it is vitally important to view the statutes in question and note the definitions, as their meanings are very often changed
in order to mislead and trick one into believing one thing when, in actuality, same means something completely different. Here is an example which
may be applicable to many due to the current situation at hand. Rather than use space here, go to this link:
http://famguardian.org/TaxFreedom/Instructions/3.5EducateFinInst.htm
What this is about is 26 USC, 6331 Levy and Distraint and note to whom this applies to and the definition of "employee". If you read this
without knowing the definition of employee, you will be mislead. Keep USC 18, 242 in mind as discussed above.
To add insult upon injury to us, did you know that insider trading is legal for Congressional Members? Here's the proof:
http://www.securitiesdocket.com/2009/03/11/closing-the-congressional-insider-trading-loophole/
http://wallstcheatsheet.com/breaking-news/do-lawmakers-legally-insider-trade/?p=2278/
They have to invent transactions with really big numbers, that way the skim is larger.
Since we're getting all apocalyptic, and that movie is out this week, here's some MUST READ material for all you astrological investors:
Mayan Calendar SIXTH NIGHT begins November 8, 2009.
http://www.calleman.com/content/articles/nov8_sixth_night.htm
remember that for the mayans, there was no schism between astrology & astronomy.
and the mayans were damn good astronomers.
reading trough all the comments under this post made me realize that my radical pessimism mixed with I-don't-give-a-shit-ism is actually far more rosy than the reality itself. Shit, i think ill start drinking again. I know there will be much fun once when the wrath of history comes down on us, but i think i would rather leave the party before that. And on that note, I raise a glass to all of you.
Don't leave the party. If you do that, they win.
Yeah the fed just sent me a e-e-mail, fixing up the problem, they do care.
http://www.youtube.com/watch?v=RSWxgMlsOyU&feature=fvw
Skippy...ex-ranger+ with skillz educated farm boy thingy with a red head fixation >.-
SKIPPY'S EMAIL FROM THE FED IS A DANGEROUS EARWORM. BEWARE. SKIPPY KNOWS NOT WHAT HE HAS DONE. REPEAT, THIS EARWORM COULD LAST DAYS AND STEAL YOUR PEACE OF MIND.
It is kinda sweet though. Hehe.
I took the bullet for you.
MsCreant - Reminds me of V for Vendetta quote:
+Quoting V:+
* I worried about myself for a while. But one day I was at a market and a friend, someone I'd worked with at the BTN, got in line behind me. I was so nervous that when the cashier asked me for my money I dropped it. My friend picked it up and handed it to me. She looked me right in the eye and didn't recognize me. I guess whatever you did to me worked better than I'd ever have imagined.
* No one will ever forget that night, and what it meant to this country. But I will never forget the man, and what he meant to me.
* I remember them arguing at night. Mum wanted to leave the country. dad refused. He said if we ran away, they would win. Win, like it was a game.
+/end referenced V quote+
How many of us are pondering the same? Right now, the security of the familiar, the tranquility of repetition.
Tomorrow our submission.
The truth is, there is something terribly wrong with this country, isn't there...
Yes friend, and through the process of colonization and the doctrine of imperialism, we have infected others, exporting our sickness even as we export jobs, means of production, and all the stuff we rely on to survive, to the new set of slaves.
We have become the empire we fled back in the 1700's.
We have become the empire we fled back in the 1700's.
There it is. Thank you for the simplicity I have searched for.
Only now it has grown to monstorous complexity and size.
To infinity and beyond - Buzz Lightyear (Insert graphic below)
http://www.enjoyart.com/single_posters/disney/buzz-lightyear.htm
BTW, Best wishes on your planned run. Please keep me up on that one.
Thanks Miles. Unfortunately I will have to wait a while in order to meet the age requirement. But the first election I am eligible for I'll be sure to give Barney all hell.
bingo...which is why it is vitally important that we do not repeat the same mistakes that our ancestors made as we seek to exorcise ourselves from it.
douple dippin here, drinking a martini and tossing a molotov.
let the mother**f*r burn. seriously, i hope it all goes up in flames.
and let's not kid ourselves, the beast has a lot more clever technology than it did two centuries ago. we're talking mass genocide on the scale of really big numbers. you can bet your bottom dollar(no pun hehehe) the greed lizards at the top of this pyramid are going to eat everything in sight to stay alive. the basic fear of dying drives a collective in the very same way it does for the least of them. just like me, they do not wish for the story(our personal life) to be over yet, and these gorillas will stop at nothing to preserve theirs.
i am not afraid of Death, actually, quite the opposite .... i am just so fucking bored with all this, with the things i see with the stupidity i witness daily, with the shear amount of the lack of any understanding ... yes, let it go up in flames .. all of it ... maybe someone, at some distance future point will make it better ... i dont know ... but it is so fucking boring and stupid ... let it die ...
seriously, having to hunt to stay alive, while keeping one open to not get eaten...
I don't think you would find any time to be bored. just saying.
meh ... i have been trough much worse and much exciting situations than that .... and also .... and if i would hunt i would hunt in lower Manhattan, and it would not be animals which i would hunt .... well not animals animals at least ...
well not animals animals at least ... ROTFLMAO!
CB - I would love to hunt with a mirror that everyone could see. Hold it up and destroy the myths of the window dressing. Perhaps I have hunted enough two legged critters in my time and would prefer the more usual hunts and haunts. I suppose that is why the mundane is.. well.. so mundane. It sure beats the hell outta the charge of being fired upon without result. The old zzzziiiiiP vs snaaaaP discussion.
there might be a better party to go to. complete and utter chaos will really get your adrenaline pumin. i mean, there could be blood guts and gore flying around, havin to diodge it and sh*t! and if you can slog through that and still be breathing when it's over, effin A! I'm all for that party. it beats the hell out of waiting to see what my fate is going to be at the hands of Corporate Master or the Government or whatever you believe has power over your life at this moment. this kind of nonsense will go on ad infinitum, and has been for 5000 years or more, until you sit down and quit feeding it. My great hope is that all people will wake up and quit showing up for work and quit paying their bills. this sucker will shrivel up in ninety days. and then the carnage will start cause that is all they will have left to try and make us behave.
I am done. cashed that ticket and actually hangin with others who have done it too. they look just like you.
Tyler:
I can understand why the huge notional amount of IRS outstanding might lead one to wonder whether there exists therein a huge embedded and under-reported systemic risk. IRS however are distinguishable from CDS in the following ways:
(i) a CDS credit event can result in 100% of the notional amount becoming payable. I think a recovery of 50% of the notional amount might be considered typical.
(ii) under IRS, periodic payments of say 5% (depending on the reference interest rate) of the notional amount are due from one party. If the interest rate suddenly doubled, the exposure would jump to 10% of the notional amount, so the risk is much lower than the 50% payment above. This ignores the fact that the exposure is actually even lower as the other party likely owes an offsetting periodic fixed interest rate payment.
(iii) most acknowledge that the CDS market is generally speculative - the buyers and sellers of CDS are not trying to hedge an existing exposure (e.g. they do not hold the underlying bonds), they are instead making a speculative bet. There is therefore nothing to offset the potential risk of a 50% payment above.
(iv) the IRS market is generally used to hedge specific exposures, so it functions to mitigate the risks caused by sudden shifts in interest rates, rather than increasing it.
This is just off the top of my head, there are likely many other reasons not to be worried about IRS. I don't think many in the industry are worried about them either, and with good reason.
One of the non-trivial dangers I see is that of a treasury market dislocation (read: an outlier event in the interest rate process).
If the stochastic process jumped "big enough", there would be no way to dynamically hedge the exposure before the whole shithouse went up in flames.
Agreed?
OK .... i just want to say this .... there are actually two possible versions of the Future. One is global Marxism in the form of Self-regulatory Socialism which will come as a joint effort from all of those who feel or are slaves of the vast minority which controls the everyday reality of the vast majority, and of which The Revolution will be the birthplace OR there will be a Desert of the Post-Humane, an uninhabited environment freed from the fundamental nature of Humanity, but ready to rebuild itself yet again in a better way. Maybe I'm just rambling, and maybe i will not be taken seriously, but i dont care, i really don't care. I do not wish to accept that what we are witnessing now is THE pinnacle of historical revolution, i do not wish to accept that this is the maximum of Humanity. And simply for that reasons i wish that it all burns the fuck down. So, anyone has a lighter ?
wow! I hadn't seen this post til now. I on board cheeky. I am tired of this shit. desert of the post humane, here I come.
Dude, we so don't need a lighter.We have thermonuclear weapons....the ultimate currency hedge.They also hedge against prosperity and fecundity if we actually use them in large numbers.You have to love the bomb.The Malthusians must be practically itching to use them....the bomb solves so many problems.Overpopulation, debt.Once all the major population centers reach 10 million degrees in a few milliseconds trite things like empire and the banking system go away.
Gee, that desert seems close.
And no, I really do not think this is the pinnacle of our civilization.The ones that embrace that are drunk on the koolaid.
CB - I believe that the human dynamic is much more... well... dynamic. Life is its own force and it will find a way to advance, mature and when necessary, destroy & rebuild.. The tension between pure freedom and pure security in our own existence and within the larger human community are parts of the force that makes the wheel go round. I hope your primal scream at the passing clouds helps. I think I will go outside and join you.
Peace Brother Man
How about dessert, it's a little sweeter. It would appear that coordination and collusion beats rugged individualism every time, if workers of the world united oligarchs would be out of business.
Remember to eat dessert first, life is uncertain.
Will this do?
http://i.somethingawful.com/features/gift2007/pn02.jpg
yes, perfect .... now what we need is 42 trillion barrels of ethanol to provide enough Molotov cocktails to burn down the Sun itself.
Few observations about this comment:
1. The sun is innocent in all this, leave it alone.
2. 1.5 Quadrillion in derrivatives are probably better than Molotov cocktails in terms of WMD.
3. The process of just making that much ethanol is enough to fuck some stuff up.
4. Could be if we just drill the rock we affectionately call earth, we could stick a rag in it and ignite the core. This does strike me as a little excessive on the level of destruction needed to set it right.
5. What I am getting as I commune here with folks is that local is what matters. This community is virtual, I can get support here. I then need to take the ideas back to my own community as best as I can. Problems will be local. Solutions will be local, but like Katrina, we are in the habbit of looking to big gov for the bailout. We are our own bailout.
Local cheeky is the paradigm shift. The economy is a fiction that we are allowing to oppress us. It is just a metanarrative that needs to be torn down. Local will come into vogue, and, my academic manure shoveling friend (I shovel too), it will become the next limiting, oppressive metanarrative because everyone will come to distrust any kind of cooperation that looks like centralization and that will be wrong too. Thesis, anti-thesis, new synthesis.
And so it will go.
what she said,,, god, I love a smart skirt.
local is where we start burning it down! hell yea!
And the wheel makes one more turn. Great synopsis.
I can understand why the huge notional amount of IRS outstanding might lead one to wonder whether there exists therein a huge embedded and under-reported systemic risk. One should however consider that:
(i) a CDS credit event can result in 100% of the notional amount becoming payable. I think a recovery of 50% of the notional amount might be considered typical.
(ii) under IRS, periodic payments of say 5% (depending on the reference interest rate) of the notional amount are due from one party. If the interest rate suddenly doubled, the exposure would jump to 10% of the notional amount, so the risk is much lower than the 50% payment above. This ignores the fact that the exposure is actually even lower as the other party likely owes an offsetting periodic fixed interest rate payment.
(iii) most acknowledge that the CDS market is generally speculative - the buyers and sellers of CDS are not trying to hedge an existing exposure (e.g. they do not hold the underlying bonds), they are instead making a speculative bet. There is therefore nothing to offset the potential risk of a 50% payment above.
(iv) the IRS market is generally used to hedge specific exposures, so it functions to mitigate the risks caused by sudden shifts in interest rates, rather than increasing it.
I am just amazed with the posts here...everyone...CD, MsC, CB, etc...just WOW...I am not alone in my pessimism, desire, dropping out, starving the beast....I am at the acceptance phase, with some regressions to depression and anger from time to time, and no longer give a fuck (that works really well with my dad, who is a system person...lol). All I care about is my family, freedom and living the most I can each day. $$$ out of the market, investing in tangibles, hand tools, storables, useful skills (wood working, welding, gardening, etc).
CD...your post #124107...nail on the head...:) Thank you!!
Now if I could just remember my complex password after Sapphires and Pauli Girls, I wouldnt have to post anon...:)
tomdub_1024
Texas! http://blip.fm/home?reblipId=26981512
One might call it going Galt. It's one thing to subsidize the bottom 1/3rd of a society. Left vs. right can debate that for ages. What's criminal and where I left the institution formally known as America is when we added the Oligarchs. Instead of making them wait in line at the soup kitchen we just flip bits in computers and BAM! welfare delivered.
We should put up a poll of how many of us are doing the same thing. Nicely summarized: "All I care about is my family, freedom and living the most I can each day. $$$ out of the market, investing in tangibles, hand tools, storables, useful skills (wood working, welding, gardening, etc)."
I suspect the results would be akin to the Nobel Peace prize awarding. We're all just at various stages.
Please don't forget that there is no "upper class" in the USA. By definition, "upper class" is royalty. Since the USA has no royalty, it has no "upper class" and, therefore every billionaire is "middle class". Therefore, every time the Senators give a billionaire another huge handout from the Public Treasury, they are helping "the middle class". And every tax cut aimed at a billionaire is a "middle class tax cut". They don't even have to lie.
one more time (even if your comment is tongue and cheek), if the middle class would just sit down and do nothing, not pay a single bill, not a single usury note, in less than ninety days, this party, this illusion, is OVER!
Good People die, suffer endlessy, from cradle to grave, when Good Men pretend they are doing something to help the Good People avoid suffering, whe the real Truth is that they are only interested in avioding there own sufferring.
Dead on.
Doing nothing is the most important action we can take
It is the great leveler.
It is peaceful
It has worked before
The only reason this continues
is that we let it
As with our number system (which goes on infinitely, of course), there is always more new debt that can be created to paper over the old "bad" debt.
The human mind recoils at the illogic of this etenal process of new debt to pay old debt, because somewhere in our hearts we think of debt as something that must ultimately be repaid in full. But this is not true of all debts -- this is only true of your debts.
Other debts -- ie: debts held by the biggest players, are mere poker chips. They can be swapped for newer chips of different colors -- and there is a chip-making machine that can produce an infinite number of new chips.
Numbers in the "Quadrillions" are proof that this is how the system works. These vast numbers seem horrific when we place them side-by-side with paltry, more-familiar numbers (like those used to describe our GDP) -- but this is because our GDP is limited by hard cold realities of production capacity and time. Debt on the other hand, is unconstrained. Debt has the amazing property of being able to expand infinitely, and yet still hold exchangeable value.
We get into trouble by trying to compare debt to numbers which make sense. But debt is a mathematical concept. It isn't something that gets balanced. It is something that gets multiplied while it's value decreases by a divisor less than the multiple of its growth. It is the means of our enslavement, yes. But mathematically dishonest, it is not.
As with our number system (which goes on infinitely, of course), there is always more new debt that can be created to paper over the old "bad" debt.
The human mind recoils at the illogic of this etenal process of new debt to pay old debt, because somewhere in our hearts we think of debt as something that must ultimately be repaid in full. But this is not true of all debts -- this is only true of your debts.
Other debts -- ie: debts held by the biggest players, are mere poker chips. They can be swapped for newer chips of different colors -- and there is a chip-making machine that can produce an infinite number of new chips.
Numbers in the "Quadrillions" are proof that this is how the system works. These vast numbers seem horrific when we place them side-by-side with paltry, more-familiar numbers (like those used to describe our GDP) -- but this is because our GDP is limited by hard cold realities of production capacity and time. Debt on the other hand, is unconstrained. Debt has the amazing property of being able to expand infinitely, and yet still hold exchangeable value.
We get into trouble by trying to compare debt to numbers which make sense. But debt is a mathematical concept. It isn't something that gets balanced. It is something that gets multiplied while it's value decreases by a divisor less than the multiple of its growth. It is the means of our enslavement, yes. But mathematically dishonest, it is not.
ahh, password reset (sorry ZH, as a sys eng I have so many passwords I cant keep track of, this one should stick though...:)
Local, YES, is the only sane way at the moment, 'specially if you live in "fly-over" country like me (escaped the urban MPLS and SoCal). But you're right, eventually everything governmental grows to take over freedom...Articles of Conderation to the Constitution to the First Bank of America (thanks Hamilton, you monarchist POS) to whatever the fuck we have now.
More Sapphire and Pauli Girls please!
Anyway, on to REAL life, making dinner for the family, giving my wife a candlelit bath (the important things in life...:), and going into my small business tomorrow and try to profit while giving exceptional service and value...the responsible capitalist...flyfishing Tuesday...thrift store trolling Sundays for camping gear, Xmas presents, necessities and so forth.
More Sapphire and Pauli Girls please! (and maybe some of that herbal stuff...:)
red pills suck at first, then they liberate to other possibilities, as CD said earlier.
The 1,000 pound man is. And we all have been made its codependent.
'eff' the 1000 pound man and his insistance on dependancy...we will live happily in SPITE of him, I refuse any other alternative, I will shift my paradigm to the essentials...life, love, simplicity and freedom...dumpsters have lots of good stuff occasionally...;P
Since I have been rejected into the dumpster of the system as a used up hamster that will no longer run the treadmill, regardless of how much steroids & meth get pumped into me I appreciate your sentiment immeasurably.
The only thing worse than being blind is having sight but no vision. - Hellen Keller
You have vision, and that makes you free.
Nice!