Michael Burry Demolishes The Fed's Self-Perceived Infalliblity, Discusses The Cost Of "Extend And Pretend"

Tyler Durden's picture

The recently (in)famous Michael Burry, writes a blistering op-ed for the NYT, in which he implicitly asks one simple question: just how dumb are Alan Greenspan and Ben Bernanke? The man who foresaw it all, subprime crisis, banking system collapse, counterparty risk, CDS scapegoating and emerged from the second coming of Great Depression 2.0 a much wealthier man, has so far had exactly zero invitations to share his insight with Washington's Wall Street proxy legislators, and, in addition, has had his forecasting skills called a "statistical illusion" by the very same Greenspan who took the economy to the brink, and whose successor is now doing just that in the second doomed great reflation experiment. At this point one has to be an immaculate idiot (read Chairman of the Fed) not to see, that what the Fed is doing with the pursuit of the same catastrophic monetary policy which failed the first time around, and will fail now, is pushing us straight into the abyss, from where America just barely managed to crawl out in 2009 via $3 trillion in additional public debt issuance to date (a number which will likely hit $10 trillion within the next 5 years, to result in a debt-GDP ratio of approximately 200% when including the GSEs). It has gotten so bad that even Fed governors are begging Bernanke to stop the madness before it is too late: a first sign of internal mutiny. Alas, just like when everyone ignored Michael Burry, who laughed into the face of conventional groupthink in the mid-2000's (which by definition is always wrong, and will be this time around as well), so will Wall Street and its proxy, Washington D.C., ignore that which is all too obvious until it is once again too late. Hopefully by then intelligent and very rich life on Mars will be discovered, cause there will be no one left to bail out not just the US, but the world.

Some of Burry's more poignant insights from his Op-Ed:

I demanded daily collateral settlement — if positions moved in our favor, I wanted cash posted to our account the next day. This was something I knew that Goldman Sachs and other derivatives dealers did not demand of AAA-rated A.I.G.

Hmm, didn't Goldman explicitly say it was always demanding collateral settlement from AIG? Is there yet another lie in Goldman's recollection of the events? We will never know, or at least not until the Fed discloses to Darrell Issa all there is to be disclosed about the Fed's involvement in bailing out Goldman Sachs et al (yes, we went there).

On flying in the face of uniform stupidity:

During 2007, under constant pressure from my investors, I liquidated most of our credit default swaps at a substantial profit. By early 2008, I feared the effects of government intervention and exited all our remaining credit default positions — by auctioning them to the many Wall Street banks that were themselves by then desperate to buy protection against default. This was well in advance of the government bailouts. Because I had been operating in the face of strong opposition from both my investors and the Wall Street community, it took everything I had to see these trades through to completion. Disheartened on many fronts, I shut down Scion Capital in 2008.

No surprise there: those who are right wait the longest for their thesis to be validated. However, we have gotten to the terminal thesis unravelling: when those (few) who have correctly been calling this market the biggest ponzi scheme in the history of the world, are finally proven correct, there will be no windfall, as the outcome will be the default of the US, the debasement of all currencies, and the economic collapse of the world. Unfortunately, with consumers relevering once again, however not into yielding assets but into the dumbest trinkets like electronic books (when was the last time anyone complained America reads too much?), the liquidation value of the American economy is getting lower and lower. And once the great resolution comes, when credit is discovered to, surprise, not be equal to money, then the only question left is whether the other great "money equivalency" test will be validated: that of gold.

On the intolerable stupidity of Fed Chairmen:

I have often wondered why nobody in Washington showed any interest in hearing exactly how I arrived at my conclusions that the housing bubble would burst when it did and that it could cripple the big financial institutions. A week ago I learned the answer when Al Hunt of Bloomberg Television, who had read Michael Lewis’s book, “The Big Short,” which includes the story of my predictions, asked Mr. Greenspan directly. The former Fed chairman responded that my insights had been a “statistical illusion.” Perhaps, he suggested, I was just a supremely lucky flipper of coins..

Mr. Greenspan said that he sat through innumerable meetings at the Fed with crack economists, and not one of them warned of the problems that were to come. By Mr. Greenspan’s logic, anyone who might have foreseen the housing bubble would have been invited into the ivory tower, so if all those who were there did not hear it, then no one could have said it.

How Greenspan not only did not mitigate the imminent collapse of the bubble, but trumpeted every new excess-leverage permitting gimmick:

Observing these trends in April 2005, Mr. Greenspan trumpeted the expansion of the subprime mortgage market. “Where once more-marginal applicants would simply have been denied credit,” he said, “lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately.”

On the lack of lessons from the past, and how even as we reflate precisely the same asset, credit and housing bubbles, nobody dares to point out that the Emperor is once again walking around completely naked. Why else does Tim Geithner's blood pressure double every time someone mentions that New Century redux in the face of Fannie and Freddie - the biggest dumping ground for every worthless US mortgage is now borne not by private investors, but by the taxpayer, at a cost of about 50% of GDP. How this continues to be permitted, one would need to ask Barney Frank and Chris Dodd, both of whom for some reason are still in office.

our leaders in Washington either willfully or ignorantly aided and abetted the bubble. And even when the full extent of the financial crisis became painfully clear early in 2007, the Federal Reserve chairman, the Treasury secretary, the president and senior members of Congress repeatedly underestimated the severity of the problem, ultimately leaving themselves with only one policy tool — the epic and unfair taxpayer-financed bailouts. Now, in exchange for that extra year or two of consumer bliss we all enjoyed, our children and our children’s children will suffer terrible financial consequences.

Mr. Burry's conclusion, which has been repeated so many times on the pages of Zero Hedge it has left even us numb to its implications: we have learned exactly nothing from what happened then. With institutional memories stretching for exactly so long as the prior red P&L day, we are repeating every single mistake that was done in the first round of the Great Bubble Implosion. We are now in the latter days of the second one. This time, everyone is all in. And everyone will lose.

It did not have to be this way. And at this point there is no reason to reflexively dismiss the analysis of those who foresaw the crisis. Mr. Greenspan should use his substantial intellect and unsurpassed knowledge of government to ascertain and explain exactly how he and other officials missed the boat. If the mistakes were properly outlined, that might both inform Congress’s efforts to improve financial regulation and help keep future Fed chairmen from making the same errors again.

The real core of the problem is, and has always been, the Federal Reserve: this committee of a ten myopic, conflicted and Wall Street-friendly economists (whose vice Chairman comes directly from Goldman Sachs), who all live with the flawed perception that Keynes is correct, has now achieved centralized power to an extent that would make the Soviet CK blush. As fiscal stimulus options are now essentially eliminated, monetary policy now dictates all: the stock market, bond prices, inflation, consumer savings, right down to the most basic daily activities by Americans (which lately tend to be waiting in line for an extended period of time, for an object that will be used a few times then cast away). And those who dictate monetary policy, and the rapidly deteriorating  fate of America, are a few people who are accountable to no one except their Wall Street overlords, working with cooked books, which are open to nobody, and making decisions in the secrecy of what can objectively be called a cabal. Yet even with all this, at least 70% of the Senate still regularly reconfirms the biggest dictator in the history of what may once have been a democracy. This is the kind of communism that Lenin, Stalin, Marx and Engels could only dream of.

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SayTabserb's picture

Mr. Durden, that was so trenchantly, eloquently, comprehensively said that any comment is entirely superfluous.

bc0203's picture

Great piece, Tyler.  One of the best.  One thought, though.

... those who are right wait the longest for their thesis to be validated. However, we have gotten to the terminal thesis unravelling: when those (few) who have correctly been calling this market the biggest ponzi scheme in the history of the world, are finally proven correct, there will be no windfall, as the outcome will be the default of the US, the debasement of all currencies, and the economic collapse of the world.

Don't you think that's a bit extreme?  I can see that happening for most of the developed world, but the entire world? 

On a more humorous note, I'm including a link to a comic that was on Nathan's Economic Edge this morning. (the picture is showing correctly in my RTF editing window, but I'm obviously doing something wrong because it's not showing in the thread when I save it back... arrgh)


mikla's picture

Don't you think that's a bit extreme?

Sadly, it is not a bit extreme.  Remember, the US dollar is the world reserve currency -- it's hard to understand what happens when the world has no such "reserve" currency.

Further, the US is the largest part of the IMF, and the rest of the world (and especially the EU) cooked their books worse than did the US.  So, everybody must default, since nobody (by definition) can service their debts, and counter-party risk is off-the-charts.

There will be a new system, but I doubt Iceland and Greece would be excited about participating in a "new IMF", and any nation with any sense would not want to partake either.

bc0203's picture

Maybe I need to explain my thoughts more thoroughly here:

What's happening today is rare but not without precedent: there is a wave of simultaneous sovereign debt defaults brewing around the globe.  (The fact that fiat currencies are involved and/or one country's banks were cutting many of the deals at the center of the crisis isn't that new, either.)  The new twist on this old story is the use of derivatives, which can bring the house of cards crashing down much more quickly, for seemingly random reasons and with much more catastrophic results.

In any case, the most likely scenario for us here in the US is a series of defaults at the state and local level, plus additional problems with MBS/CMBS and other toxic assets, all of which will create another finance/banking crisis (exacerbated by the non-fixes that were made to the financial system this last time around.) Eventually, the Fed won't be able to fund further stimulus/QE/bail outs, and the cost of the "rolling over" government debt for these items plus prior commitments will become excessive.  The US will be forced to restructure it's debt, in all probability multiple times before it is all over.

During this period, faith in the dollar will be compromised and there will be a period where other currencies have a chance to replace it as the world's reserve currency. It's truly a matter of how well other countries have managed their currencies as to whether they get a chance to grab at that brass ring this time around.

There's a slim possibility that somewhere during this process that saner minds prevail and we move towards sound monetary policy, limited government and a truly balanced budget here in the US, all of which would re-establish the dollar's credibility as a reserve currency - but I'm not holding my breath on that.

Is this the end of the world?  No.  Will this result in a radical change to the world as we know it?  Almost certainly.  Will we survive?  Absolutely.  Will our standard of living decline?  I'd be surprised if it didn't. 

At the same token, there will be unprecedented opportunity going forward, but it's going to be a bumpy ride, so fasten your seat belt...

Assetman's picture

Very interesting line of thinking... I pretty much agree with most of it.

My problem is the timeline for the cards to fall into place.

Do you want to take a stab at it?

bc0203's picture

Barring any unforeseen catastrophe, I'd put the first serious risks of some form of restructuring or default on the Federal debt at no more than 3-5 years out, based on the following (defaults at the state and local level are already happening): 

  • By mid 2012 another full-blown banking crisis should be in full swing (thanks to ARM resets, mortgage re-defaults, and issues with CMBS).   The pressure for further bailouts and QE will be enormous. 
  • Increased Federal spending will be coming online gradually as a result of new legislation and the various "stimulus" packages that have been enacted over the past few years (not to mention increased entitlement spending.) 
  • Rates on sovereign debt will increase as the perceived risk of investing in it increases relative to other investments.  This will affect the interest expense on all sovereign debt, even for AAA rated countries.

We might get lucky and beat the odds for a few more years, but sooner or later, the facts that a large portion of US debt is externally financed, that the US runs an ever-increasing annual deficit with massive unfunded liabilities and that ever-increasing amounts of debt will need to be rolled over each year will inevitably result in restructuring and/or default.

Assetman's picture

Thanks for the feedback, much appreciated.

As is customary for me, I tend to understand how things play out on the global macro scene-- but things tend to play out far longer than I expect.

Given your scenario of restructuring/default in 3-5 years, I gather we may still see a lot of freaky things happen in the capital markets well before then.  Foremost in my mind are the asset bubbles Bernanke allowed to create, but chose to ignore in order to "save the system".  While everyone is well aware of the degree of equity "overbought-ness" currently, I marvel at the narrowing of quality spreads in the bond market... and the sheer size of the derivative bets already taken.

mikla's picture

bc0203, I like your thoughts and timeline -- they make sense to me.  We could get a "sudden stop" any day, but IMHO hot-and-heavy for the US in 2012 sounds about right to me (I'm pegging the EU first, though, in 2011).  Still, these things can "drag out" through international collusion, so it's possible to move the timeline a year or two in any direction, but I have a hard time picturing us making it another five years.

Cashflow is the ultimate problem:  I just can't get over the size/scope of the problem.  You suggest it's possible (albeit slim) for the US to restructure and orderly default, possibly multiple times ... but I just don't see it.  Our problems are too big -- no way 30-somethings will pay for this.

Similarly, you suggest a foreign currency, possibly managed better, may replace the dollar as the world reserve currency -- a sane assertion, but I just don't see it:  They are screwed more than is the US.

I agree with your reasoning, I just don't see how it can happen.  Cashflow problems are simply too big, and it seems to me resources will be violently re-allocated ...

bc0203's picture

Hi Milka,

I chose my words carefully above... "no more than 3-5 years out" and "barring some unforeseen catastrophe" being the key qualifiers. In essence, I'm saying if Bernanke plays his cards right and some major defaults happen elsewhere first, this should force enough money into the dollar to keep things going for a while longer.   I can think of any number of scenarios where the jig is up way earlier than 3-5 years, and (god help us) a few where we can keep the game going for quite a while longer than that.

There's one other variable that I didn't mention earlier which could bring things to a head faster: the US has a bunch of longer-term debt that it's going to have to roll-over in the next couple of years.  My guess we'll be able to pay a higher (but not exorbitant) rate of interest on it, and that in and of itself won't be enough to cause default.  We'll see.

It will indeed be interesting to see how it all plays out.

mikla's picture

I chose my words carefully above... "no more than 3-5 years out" and "barring some unforeseen catastrophe" being the key qualifiers.

I understand, and I totally agree.  I'm looking at 2012 for the US because of the commercial real estate debt roll (coming to a head in 2012), and I just don't see how we can weather that.  Social Security needs new US bond issuance monthly now, plus an expected additional 30% drop in residential real estate, and a continuing decline in employment, plus state defaults in California, New Jersey, New York, Illinois by 2012 ... I just don't see how we make it to 2013.

I'm also betting on 2012 because the EU falls first ...either this year or next.  That should give the US a bonus of another year or two as the EU default works out as capital flees to the US (although it's possible for the dominoes to go *FAST* all over the world, first the EU, then Great Britain, Japan, and then the US in a matter of days).

Completely agree with you on "unforseen event" ... if China triggers a US Treasury bond auction failure in a big way where we can't "paper over" it, the US could default first (hold your breath). Similarly, the 10-year broke out today, and a little rate hike can take down the US first ... Heaven help us all ...

Of course, there are *no* scenarios whereby all of the nations listed won't default.  ;-))

bc0203's picture

One last twist to add to your calculations... according to research done by Carmen and Rogoff, banking failures typically take 2-3 years to work their way through to a crisis at the sovereign debt level.  I had factored in what you are talking about in Europe as a way to "paper over" the current mess, and figured the other items would come to a head within three years of the banking crisis in 2012, right about the time additional funding requirements for healthcare reform starts kicking into gear.  All of this should cause the Fed's balance sheet to mushroom with new debt way beyond currently forecast levels and trigger the aforementioned crisis.

In any case, it's not pretty to watch.

Fish Gone Bad's picture

This is the kind of communism that Lenin, Stalin, Marx and Engels could only dream of.

Lenin and Stalin were fairly ruthless leaders that even Machiavelli would have admired.  Marx on the other hand was pretty much an unhappy-mamma's-boy-date-rapist.  The Communist Manifesto is just a bunch of babbling from some unhappy douche trying to write the first version of Catcher in the Rye, but failing miserably.

Pat Hand's picture

You are right about the manifesto. But I've been re-reading Kapital recently and it has a lot of insight regarding money. His prescriptions were wrong, but diagnosis was correct...

merehuman's picture

Thank you  Tyler Durden. Those under 30 did not cause this but will bear the brunt of the fallout. In a sense we are all criminals as long as we allow it to go on.

Gromit's picture

Yes it's true that it's hard to get a good start nowadays.

A hundred years ago Europeans were also disillusioned by their opportunities and tens of millions came to the US for a better life.

If I were in my twenties today I'd be looking for a new start without our legacy issues, some country with loose ties to the US. Think South America, countries which are neither command economies nor US lapdogs.

If you are not attracted by this opportunity take a moment to appreciate what your forefathers have created here, yes the "American Dream" has become an illusion but you can't really miss what never was. Otherwise you must acknowledge an entitlement based on propaganda from the same people you are blaming.


SWRichmond's picture

Those under 30 did not cause this but will bear the brunt of the fallout.

Not if I have anything to say about it.  I have two young-adult children who are entering what should be the most productive and hopeful period of their lives.  If this system can be radically reformed, and the human spirit uncaged again as it was not so long ago in America's past, they have a chance.  Bernanke / Wall Street / DC's plan is a slow, agonizing, crumbling hopelessness for everyone but themselves.  Not if I have anything to say about it.

bc0203's picture

Agreed SW (greetings from Richmond, VA if you're a fellow Richmonder).

Unfortunately IMO,  the best hope for most central banks at this point is the "reset" button (i.e. default) at this point.

SWRichmond's picture

Reset is radical reform.

Double down's picture

Only if done with an appropriate utensil, like a bazooka.

bc0203's picture

It will be hard to prevent that when the government entitlement checks stop flowing.  The question is, with more people currently receiving benefits from the government than paying in, is the outcry going to be to keep those benefits coming no matter what the structure of the government is that provides them?


SWRichmond's picture

The simple fact is, we cannot afford the level of wealth redistribution that is taking place now.  It was enabled by tax revenue that was in turn created by credit bubbles.  The credit bubbles were knowingly and deliberately blown to create revenue for the welfare/warfare state, and to enable looting by the oligarchy that continues to this day in plain sight.  We must understand: the bubbles were blown because they benefitted the oligarchs in every way; they know the harm, when it fell, would be transferred to the middle class, as it has.  The purpose of the welfare/warfare state is to buy votes to further itself, and to transfer wealth to the MIC.  Wall Street used the Fed's free money to create "financial engineering" which produced more tax revenues and enriched themselves, with the complicity of the ratings agencies and the "regulators".  The entire power structure of this nation, political, financial, and military, is complicit in this.  If this is a setup for class war, it was brought about deliberately by those on top, and those seeking to join them.

tip e. canoe's picture

ol' Dwight was right all along.

Wondering's picture

Exactly. Thats exactly how I feel. I have two 22 year olds and I have 15 good years left and I aim to make them count in the face of this takeover of our nation and freedom

Reflexivity's picture

Burry was paid to see the truth.

Bankers were paid to NOT see the truth (even hide it).

It's really that simple:  Incentives will dictate who sees what and when.


BTW, The Big Short, the book featuring Burry by Michael Lewis, is a pretty good read; recommend.

BTW part II, If Michael Burry reads this post he should know he is a hero to all those who see truth (and take action on it) and who also get criticized by the ignorant majority.

SayTabserb's picture

I agree about the book. Exellent read. Not always easy to make a book about mortgage-backed securities interesting, by Lewis succeeded. Would you agree to a slight modification to your statement: Burry was just objective about the housing market. He actually departed radically from his hedge fund strategy (picking stocks) because of this once in a lifetime chance to take advantage of a mass delusion, that the housing market would always go up. The bankers didn't care because the fees were so exorbitant, and the regulatory people (including Greenspan) didn't see it because of the groupthink Tyler often describes. 

Reflexivity's picture

Totally agree.

Michael Burry is sort of the perfect example of what Nassim Taleb calls stochastic tinkering:  You look for one thing but surprisingly find a much better thing.

Burry did have the guts to deviate from his core fund strategy, which you've got to give him credit for.  Plus you've got to give him massive credit just for the fact that he stuck to his guns on his call, which was a very unique (in fact a first case) investment.

And you're right: Bankers didn't care.  But they never care for the follwoing reason, which you also stated:  Bankers make money on short-term fees, never long-term payoffs.  They have a financial disincentive to take short-term pain for long-term pleasure.  Indeed, banks are rigged for the short-term pleasure, long-term pain operating strategy.

Yes, and groupthink compounds the aforementioned issues.

anony's picture

Plaster on the foreheads of the public:


"Incentives will dictate who sees what and when".

Ungaro's picture

What if the Fed raises the discount rate to 2.5% and lowers the interest it pays on excess reserves to -0.5% (negative 1/2 of 1%)?

This would lower their balance sheet by $1t as the banksters would rush to withdraw excess reserves and it would end the "carry trade" by raising the COF -- no more free money.

Molon Labe's picture

What would the effect of that be on the real economy?  Would the results of inflation start to be seen?  Or would they simply buy Treasuries with it?

Mark Beck's picture

Inflation can result if the reduction in reserves increase velocity (by way of loans, and effects on credit). However, a lot of these reserves are there to cover future losses. When real estate prices are allowed to adjust per the market and mean wages, reserves (depending on the bank) may only provide 1 to 4 quarters of breathing space (rosey financials). There is no good reason to buy Treasuries beyond the normal bid activity of the prime dealers. One big question for the banks is do you move more money into SIVs, in anticipation of accounting and regulation status quo.

Mark Beck

Miles Kendig's picture

As the arrival of sunrise becomes impossible to conceal.

Waterfallsparkles's picture

Gold is not the answer to being safe as Gold is tied to the Debt System and Gold has no industrial use.

The only solution in my opinion is to go back to the wisdom of the Consitution and have Congress "Coin" or issue Money.  If the Congress issued Money it would not be Debt as it is today.

With Congress issuing Money as called for in the Constitution the only cost to Americans would be the Devaluation of existing Money.  The newly issued Money could be used for Stimulus directly into the Economy.

With our current system all Money is issued in the form of Debt by the Fed which is Owned by 12 Private Banks.  The FED or the 12 Private Banks then collect the Debt which was created from zero capital on their part and interest.  The biggest problem with this system is that the Debt can be repaid as it was lent and put into the Money Supply but the Interest was never put into the Money Supply or the Economy and therefore cannot be repaid as there is not enough Money Created to cover the Interest.  It is a system that is designed to fail and in the process make the 12 Bankers Rich and Powerfull beyond belief.

The only way in my opinion to save our Country is to stop the Creation of Money as Debt and return the Country back to what the Constitution called for which is for the Congress to Create or Coin Money without it being Debt.

What I also find interesting is that the IRS is under the Federal Reserve.  The IRS was established after the establishment of the Federal Reserve.  The collection of Income Taxes on the American Public is only to collect the Debt (remember, created from zero capital by the 12 private banks) and the interest on that Debt. I think most Americans would be dismayed if they thought that almost all of the Money they pay in Income Taxes goes directly to the 12 Private Banks.  Why do the 12 Private Banks get to create Debt from zero and then get that "Debt repaid with interest"?

With our current system the Debt is Created from Zero from the 12 Private Banks.  The cost to Americans is the repayment of the Debt, the interest on the Debt, the loss of value of the Money and Assets they already have.  At least with what the Constitution the Creation of Money by the Congress the only cost to Americans would be the loss of value of the Money and Assets they already have.  There would be no Debt and no Interest on that Debt and more than likely no Income Tax.

bc0203's picture

Just want to make sure that there's agreement on two things that are implied but not stated outright in your post:

  1. The "New Dollar" would need to be based on something tangible (ideally gold and/or silver reserves), and the relationship between the amount held in reserve and the amout of currency in circulation would not be changeable. The amount held in reserve should be subject to periodic, random audits.
  2. The "New Fed" should be non-political, subject to independent, periodic, regular and random audits and held legally accountable for it's actions.

Both of these items would both be necessary for us to be able to restore domestic and international faith in the "New Dollar" as a global reserve currency. 

Adam Selene's picture

While I agree with merehuman that our children and theirs will suffer immensely from the fallout, assigning blanket responsibility or saying that we are criminals if we allow it to go on is not reasonable. Just exactly how are we supposed to stop it? We've called, written, demonstrated.  Our so-called representatives whose power it is to stop this madness have simply ignored the noise, redoubled their efforts, and compounded the problem.

When I asked my "representative" (a so-called conservative Republican) to justify his voting for the TARP program, he said "I knew it was a very bad answer, but we HAD to do SOMETHING."  Their calls were running 9-to-1 against, and they did it anyway.

They're STILL mortgaging the future and there's nothing we can seemingly do to stop it, either.  I'm pessimistic that the election's outcome in November is likely to result in any fundamental improvement.  It may slow the pace, but I seriously doubt we'll see any fundamental change in direction. The so-called "financial experts" will still be in charge, and every single one of them still believes that a dollar's worth of debt and a dollar's worth of silver are interchangeable.  Especially now that they haven't got much in the way of silver.

I hate to say we're doomed, but ...

merehuman's picture

Perhaps my view is erroneous.

Accepting the dollar , knowing what we now know, is difficult and keeps the sham going.

I too am torn as to what to do. I keep only 20 dollars in the bank for the ease of cashing checks. There wont be any more checks for me. At 59 early retirement is a no choice option.

I dont trade the market, but resent those who still do. I see that as cavorting with the enemy in order to gain a little more profit. Its always at someone elses expense and nothing of real value has been created.

Our government could have initiated huge infrastructure jobs, failed to do so and is considered not to be working in the interests of our people.

Therefore i have no choice but to withhold funds, ie. no tax payments, even were i to have the money.

Theres no fixing a criminal enterprise. They all must go , therefore it all needs to fail and i am sure it will. Till then it is in our deepest interest to explain and inform the american people .

Each of us bears some responsibility, each of us can make a difference. We need no leader, we each need to lead, beginning in our own neighborhoods.

Or dont, go ahead keep profiting and see if Karma dont come to ALL of us.

SteveNYC's picture

Change starts with the self:

1) Consciousness/awareness

2) Acceptance

3) Action

doggis's picture

early back in '09, i realized had a ridiculously small cavity on the outside wall of my wisdom tooth. in my own greenspan/bernanke wisdom i ignored it. i pretended all was good. as the hole got bigger i thought to extend the life of my tooth and that dreaded day of  'dentist' reckoning - so i bought a water pik.

today is the day of easter. in a truly symbolic way, this happens to be my day of tooth truth. paralyzed by an inconceivable pain and camped on my couch (watching reruns of doctor who), my cavity has spoken. how long is this day. i pray for monday to arrive. i need to make an emergency appointment with a dentist. i will probably have it extracted.

the moral of my story: to all of you ignoring your ridiculously small cavities go see your dentist. extend and pretend hasnt worked for me, and it won't work for you and it won't work for bernanke/geithner, or the american economy. it is a lie.


Molon Labe's picture

Ouch, Doggis.  Hope you have some pain meds to get you through to tomorrow without too much suffering.  Great analogy.

Reflexivity's picture

i realized had a ridiculously small cavity on the outside wall of my wisdom tooth.

How did you know?  Can you see it, or do you have your own home X-ray machine? seriously.


Dirtt's picture

Sunset Miles. Sunset. Not sunrise.

Mark Beck's picture

To say the FED makes decisions based incomplete information is wrong. The FED has access to real time economic data that most organizations can only dream of. Especially, in terms of its member banks. The FED knows how leveraged these firms are.

The FED is not uninformed. Its goals are very clear, to maximize profits and protect its member banks. The rest is just plausible deniability. Greenspan is not defending himself, he is defending the FED as an institution.

The FED more than ever controls the fate of the nation, politicians do not seem to understand what is happening. They have handed, by way of irresponsible fiscal policy and legislation, ever increasing authority to the FED.

It is the FED who can debase the currency and support massive deficits.

It is the FED who can provide loans to other central banks (Greece).

It is the FED who has last word on currency swaps (can stomp existing positions).

It is the FED who can buy Trillions in assets, and then snub congress about what they are buying.

The FED is not corrupt in its mission. To say it does not make the best decisions or work in the interest on the nation is missing the point. That is, it has never worked for the best interest of the nation. It works to protect it banks. There is no ambiguity here.

They honestly believe (patriots one and all) that banking is the nation. That, what is good for banking is good for the nation, and because they have been handed more and more power, by way of wealth transfer, banking is America. It is our #1 investment. We work now and in the future to pay tax to support the banks. This is the FED.

Their power is undeniable.

Mark Beck

Rick64's picture

To say it does not make the best decisions or work in the interest on the nation is missing the point. That is, it has never worked for the best interest of the nation. It works to protect it banks. There is no ambiguity here.

 That is so true. To view the FED or its chairman as stupid depends on whether you are a bank or a citizen.

SofaPapa's picture

They honestly believe (patriots one and all) that banking is the nation. That, what is good for banking is good for the nation, and because they have been handed more and more power, by way of wealth transfer, banking is America. It is our #1 investment.


This is a key point.  They believe this.  The people who run the Fed honestly believe they are doing the right thing.  They are completely blinded by their attachment to the current system.  When they say they had to do what they did or it would destroy the system and therefore the country with it, they are not lying.  Their perspective is that the system as it is currently configured is the only possible option and that any deviation from this system will destroy us.  And for themselves, they are in fact correct.  They are so identified with the current construction of the system that any deviation will indeed destroy them.  Because, however, their benefit is now coming at the cost of the majority of the people of this country, and increasingly in other countries as well, they are truly now playing on a volcano's edge.  The explosion that takes them down will be huge because they were too blinded by their attachment to the status quo to permit them the necessary creativity to realize that adjustment would have been preferable to all or nothing.  It's too late now.  The die has been cast.

doggis's picture

thanks molon. no painkillers - i will have to live with the pain till i get it resolved - it is a reminder that i am responsible for a bad decision.  i consider it the consequences to an extend/pretend philosophy (otherwise called denial) 

merehuman's picture

doggis, got cloves in the kitchen ? Get some in your mouth , keep it there a while near the tooth. Over the counter tooth pain killers can be had.

delacroix's picture

take a shot of rum, hold it in your mouth, for 5 minutes, then swallow, and repeat periodically

john_connor's picture

"Yet even with all this, at least 70% of the Senate still regularly reconfirms the biggest dictator in the history of what may once have been a democracy. This is the kind of communism that Lenin, Stalin, Marx and Engels could only dream of."

Excellent, and 'nuff said.  We are at war with the future of America in the balance.