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Its a race to the bottom being lead by Eastern Europe then Western Europe. When the US goes the whole thing goes, matter of fact when even a medium size soveign goes under it will be over.
Which is why Greece should spend everything they are given. Greece holds all the cards, soon Portugal will hold all the cards, Spain will hold all the cards, etc.
"There is no out, there is only in"
It's over, last call for drinks.
People that believe decoupling are retards, that simply is not how the system is constructed. There is no alternate system. This one goes there is no backup that just kicks in.
"Either China’s leadership is very smart or is very stupid"
I will answer for you, they are very stupid. They will collapse just like every other nation is going to collapse, for failure to recongize the use of a flawed financial model... ie compounding interest.
Bar closed early, and only us dedicated drinkers are raising a stink about it. I'm gonna go get back on the dance floor while I can - I've got a fifth in the trunk anyway.
Tomorrow I'm gonna have to plow the fields.
Vodka one hopes.....
Senate hearings, carried on CNBC, Bloomberg, and C-SPAN, represent the first major exposure of the American people to the scandalous frauds of the derivatives casino, including synthetic collateralized debt obligations (synthetic CDOs or CDO²). These are things most people have heard very little about. They begin to open up the shocking reality behind such shopworn euphemisms like “toxic assets,” “exotic instruments,” and “troubled assets.” Reactionaries in general and Republicans in particular have done everything possible to hide the role of derivatives, which must be considered the main cause of the financial panic of September 2008 which brought down Lehman Brothers, Merrill Lynch, and AIG, after felling Bear Stearns in March of the same year. The reactionary legend, repeated yesterday on the Senate floor by financier minion GOP Sen. Gregg of New Hampshire, is that the crisis was caused by poor people taking out subprime mortgages and then defaulting, bringing down the entire Anglo-American banking system and triggering the bailouts. Either that, or too much government spending was too blame.
This Big Lie has come from such propaganda sources as the Limbaugh Institute of Retarded Reactionary Ranting. But the $1.5 trillion in subprime mortgages were dwarfed by the $15 trillion US residential real estate market, to say nothing of the $1.5 thousand trillion world derivatives bubble. But, starting with Bush-Goldman Sachs Treasury Secretary Henry Paulson, the talk has been of a “housing correction,” not a derivatives panic. It must be pointed out that derivatives are nothing but wagers, bets placed from a distance on securities which themselves are often not mortgages, but rather other derivatives. The bettor buying a synthetic CDO or CDO² does not own the underlying mortgages or mortgage-backed securities, any more than someone who bets on a racehorse owns part of the horse. Blankfein and others tried to portray derivatives as a service to hedgers and end-users, but it’s clear that the vast majority of derivatives involve neither hedgers nor users, but only bettors on both side of the transaction. It is in any case this mass of kited derivatives which blew up in 2008, bringing on the present world economic depression.
The mystique of Goldman Sachs is based in large part on their reputation as the smartest financiers on Wall Street. After today’s hearings, this mystique has permanently dissipated. The Goldman executives babbled. They sounded dumb. They stalled and stammered and went into contortions to avoid giving straight answers to simple questions. They were mendacious and evasive when they did speak. Financial powers around the world will note carefully the refusal of three out of four Goldman executives on one panel to state that they had a duty to defend the interests of their clients. Who will want to do business with such a gang? Goldman Sachs got $10 billion of taxpayer money in low-interest loans under the Bush-Paulson TARP. Part of that money went to pay for obscene bonuses for Goldman executives like the ones on display today. The argument for bonuses is that they must be paid to retain the highly talented personnel, virtual geniuses, who are indispensable for Wall Street speculative success. But these are no geniuses, they are imbeciles. No more bonuses should be paid by banks saved through public money.
Sleaziest of all was Goldman’s risk-monger in chief, Lloyd Blankfein, who pretended not to know that derivatives are often kept hidden off balance sheet. The morally insane Blankfein testified that his role was to provide the firm’s clients with “the risk they wanted.” Other GS witnesses represented the firm’s role as “distributing risk.” But it turned out that they were manufacturing risk through the very existence and activities of Goldman Sachs, which had the result of pyramiding the total risk of the US financial system into intergalactic space. It is time to regulate much of that unbearable risk out of existence with appropriate regulatory legislation. In the meantime, no sane person would buy a used car from Blankfein. Nor should they believe his assurance that the “recession” has ended.
But when at the end of the day Blankfein finally suggested to Sen. Tester that synthetic CDOs might be outlawed, we should accept his proposal immediately.
Today’s hearings reveal the Goldman Sachs gunslingers and whiz kids as ignorant gangsters and con artists, notable only for their ability to practice massive fraud with impudence. These sleazy mediocrities do not deserve bonuses paid for by taxpayers. Rather, it is time to shut them down and put them in the dock.
If Goldman Sachs had cared about is clients, it would have urgently warned them to unload their subprime risk by late 2006 or thereabouts. Instead, Goldman was busily increasing its clients’ risk by selling them more toxic CDOs out of its own inventory warehouse.
As the philandering Sen. Ensign pointed out, comparing Wall Street to Las Vegas is a slander on the croupiers of Las Vegas, where everyone knows or should know that the game is rigged so that the house always wins. To use the comparison introduced by Sen. McCaskill, Goldman Sachs was operating as the gambling house, or the bookie. At the same time, Goldman was betting for their own account. But much worse was the fact that Goldman was stacking the decks, loading the dice, fixing the games on which the bets were placed, and bribing the umpires.
As Ensign put it in a rare moment of lucidity, the subprime mortgage was bad. But the collapse of subprime would not have had anything like its actual destructive effect on the US economy if it had not been compounded by the mass of synthetic derivatives that were piled on top of subprime.
The broader issue raised by today’s hearing is: what human purpose is served by the existence of Goldman Sachs, which concocts toxic synthetic CDOs for the purpose of allowing speculators, who are often lied to and duped, to bet for or against them. Goldman Sachs can only be described as a speculative parasite which promotes the activities of other speculative parasites, such as the John Paulson hedge fund at the expense of the public and of its other clients. It was a crime to inject $10 billion of Treasury money into Goldman Sachs. It was another crime for the Fed to lend Goldman untold billions (just how many billions Bernanke still refuses to disclose) to keep them afloat and enable more predatory profits. These crimes must stop, and the public money must be clawed back. Most important, it is time to shut down the derivatives rackets.
Useful questions from GOP Sen. Coburn pointed to another kind of derivative: the infamous credit default swap (CDS). These CDS are what brought down AIG, whose London hedge fund had issues $3 trillion in derivatives. When the government bailed out AIG, part of that $180 billion of taxpayer money was used for payouts to the CDS counterparties of AIG, biggest among them Goldman, which got $12.5 billion from the US taxpayer. That was 100 cents on the dollar on a mass of toxic CDS. Coburn wanted to know why Goldman got all their money back, while GM bondholders took a bath as GM went bankrupt. That was, of course, a matter of Goldman’s political clout through GS alum Henry Paulson and Obama Car Czar Steve “The Rat” Rattner, backed up by the historic preponderance of finance capital over industrial capital in this country since Andrew Carnegie sold out to JP Morgan over a century ago.
Thanks to Goldman Sachs, the other Wall Street zombie banks, and their derivatives, the financial panic of 2008 has turned into a world economic depression of unimaginable proportions. The unemployed and underemployed in the US alone are surely in excess of 20 million. Five to six million home foreclosures are already done or in the pipeline, throwing tens of millions of Americans out of their homes. World trade has been seriously impacted. The budgets of California, New York, Illinois, and many other states are in crisis, with massive layoffs of teachers and other state employees. An entire generation is being destroyed. Now, Greek bonds are trading at junk levels under the attack of speculative predators including Soros, Greenlight Capital, SAC, and the protagonists of today’s hearings – Paulson and Co and Goldman Sachs itself. The attack on Greece and the euro represents the leading edge of the second wave of the depression, which is now arriving in much the same way that the second wave of the 1930s depression was unleashed by the Vienna Kreditanstalt bankruptcy in May of 1931, about 79 years ago and just a year and a half into that depression.
The goal of the Republicans is to portray themselves as stern judges of Wall Street, even as they line up in a unanimous phalanx to protect the finance jackals from any meaningful regulation whatsoever — as seen in yesterday’s vote to block cloture on derivatives re-regulation and reform. The goal of the Democrats is to expose the sociopathic evil of Goldman Sachs and the rest of Wall Street while preening themselves as defenders of the public interest, without however banning credit default swaps, banning synthetic CDOs, and imposing a Wall Street sales tax on all remaining derivatives and asset transactions.
To this degree, today’s hearings are being conducted in bad faith by both major parties. However, the dynamic of the resulting spectacle has the result of educating and mobilizing public opinion against the predatory practices which are the essence of Wall Street, even a year and a half after the banking panic of September 2008 and the monster bailout of zombie banks which soon followed. What is required is a new edition of the anti-banker sentiment set off by the Senate Banking Committee hearings conducted from January 1933 to May 1934 by committee counsel Ferdinand Pecora, which unmasked the corruption of Wall Street. Persons of good will need to get active now to push this process as far as possible while these social dynamics are working. It is time to hit the zombie banks, the hedge funds, and their derivatives as hard as possible, before the second wave of the depression hits. The program necessary to fight the depression and break the strangle-hold of Wall Street on the US economy and political system is given on my web site.
During a break the senators filed out, and the GOP reactionary lockstep once again blocked cloture for a final debate on the Wall Street reform bill, weak as it is. Many activists of the Tea Party naively believe that they have been fighting for a year and a half that they have been fighting to take back the Republican Party. If that is what they believe, today’s second cloture vote proves that they have gotten nowhere in their efforts. Despite their charades, the GOP are the bodyguards of the Wall Street predators. Tea baggers who think they can break the Wall Street grip on the Republicans are pathetic dupes, and they need to wake up, pronto.
When Paulson went to the leaders of Congress to demand a $700 billion bailout for Goldman and his Wall Street cronies, GOP Senate majority leader Mitch McConnell was “deeply frightened” by the apocalyptic briefing delivered by Paulson and Bernanke. When Democratic Majority Leader Harry Reid started talking about how difficult it would be to get so much money in a hurry, McConnell urged an immediate bailout, saying: “Harry, I think we need to do this, we should try to do this, and we can do this.” (Andrew Ross Sorkin, Too Big to Fail [New York: Viking, 2009], p. 442) The GOP was the original party of the bailout, and they have not repented, as best seen through the continuance of McConnell, one of the key midwives of the bailout, as Republican Senate Majority Leader. This is the same McConnell who went to Wall Street recently to meet with zombie bankers and hedge fund hyenas, pledging to block derivatives reforms in exchange for big bucks contributed to the GOP’s campaign coffers. Tea baggers who think the GOP has changed or is moving to their side are sadly deluded.
Today, the market fetishism of the crackpot Austrian school has taken a severe blow. Now that Blankfein‘s public image has been soiled by Goldman’s scurrilous and scatological emails, the time is ripe for the radical reform of derivatives and the zombie banks. This is a matter of national survival.
Now that Goldman Sachs is masquerading as a bank holding company, it is subject to FDIC rules. If Goldman’s derivative hoard is marked to market, it is bankrupt. The FDIC should therefore seize Goldman and liquidate it under chapter 7 of the US Code. Sheila Bair should not wait for Friday.
Today, the market fetishism of the crackpot Austrian school has taken a severe blow.
Today, the market fetishism of the crackpot Austrian school has taken a severe blow.
With all due respect, your credibility is taking the blows here, if that's what you think has happened.
your credibility is taking the blows here
From you, and who else?? Don't presume you have followers..
We had a free market when???? Let me help...never..in this structure we will never have one....do I believe in it's general tenet,, yes,,,but in this era,,it's crackpot..when in Rome...Human Action Ludwig...
That we don't have anything near a free market is undisputed.
That Austrian Economics is a crackpot and is "taking blows" is your opinion. In what way have the Goldman hearings refuted any views of the Austrian school?
Undisputed???? Maybe some elements of ZH, but the general sheep of the amalgamated order of nitwits / majority....? Please..
In today's world,,,if I have to explain....hit the books...we can converge in a later life, when you get it.. With my condolences...
The Austrian school makes the commonsense equation that productivity=wealth but debt and that debt/credit = serfdom. So how are these simple equations invalidated by your rambling arguments? Austrians believe in creative destruction not an unholy alliance between the soveign state and bankers with debt as the glue-thus the government bailout of the banks is anathema as is the idea of public sector stimulus as favored by the federalist party-the democrats. Austrian economists and liberatians like Ron Paul (they are the same) value the individual above the collective as the individual is the source, nay foutainhead of all creativity and thus wealth. Recall Hamilton pushed the idea of debt and a national bank (the first Fed) to finance it while Jefferson the founder of the republican party opposed both a central bank and Hamilton's desired use of a standing army to create empire.
Apparently, you need to take your own advice and read the books instead of hitting them with your head as this won't give you knowledge via osmosis (i.e. diffusion through a semi-permeable membrane)
Yeah, I'm less impressed with Webster if that's what he boils Austrian Economics down to.
Talk about a disconnect.
I am Chumbawamba.
Show me the pure implementation of it, a Utopian I'm not,,,nor a Malthusian..talk to me directly, not in third person...
It would be nice if all our children attended the Ludwig Von Mises Institute and infected our society with it's influences.
The disconnect is with you,,not to understand the tools we are denied in this insane existence.Your response clearly indicates your read was incomplete...
And your friend John Coltrane.. A love supreme part I...1964...Before your time...
About the Austrian school which I've always believed relies as much on "faith" as socialism, Greenspan said it himself, "I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms."
The excellent Nova episode last night "Mind Over Money" proved to my satifaction something that I've long believed: markets _are not_ always rational and in both the best and worst of times they are the least rational. This results in massive bubbles of all kinds (ex., in tulip bulbs) and overshoots at the bottom.
geo, thanks for my cliff notes.
Great post... long... but well worth the read! ~Thx
Is the chick interviewing you on RT.com infinitely pokable in real life?
We never broached the subject,, as I was on my way to Rome the following day,,,
Never reveal you intentions,, this I should not elude..
Nice plan geopol. As soon as we can get the massive fraud and corruption out of the system, we will get started....
In the meantime, we have started a pasture based farm and it is doing great. Thanks to Pollan, Salatin and others, high quality, nutritionally dense food is a big hit.
need any farmhands? i need to learn how to farm. fuck the white collar shit. and fuck it even if the economy is great, i've had enough 18hr days in a cubicle.
We do . This is our first productive year and therefore we are just getting out of the gate. I'll be there either in mid may or late june, so if you could arrange to be in Va then, that would be great! Also, polyfacefarms has an internship program that is the best
What state are you in AS?
Perhaps crab cake and waterwings could make an appearance . We can train with the CQB's too
Hulk, that is seriously impressive. My hat is off to you. and giving apprenticeships, that is a gift. I personally believe the local food movement is going to be one of the things that can truly help our country. less fat people, less imported garbage, less foreign oil to transport the garbage and teaching good values.
I currently live in NYC, my wife is from Syracuse, and her sis has her eye on a nice 100 acre parcel that she boards her horses on in exchange for cleaning the barn and taking care of all the other animals. She has quite a large garden, and we have have BS'd about doing exactly what you are. I have also been looking at new england, as the type of thing you are doing is taking off there as well (as you know I am obsessed with maine).
I got laid off today (was a temp thing for a few months), if i don't have something lined up soon, I am rolling down to get my hands dirty!!
I don't see an email on there though...
You are living the dream brother.
Getting this farm stated is hard work though
And it is in the middle of nowhere with no electricity or running water. Lots of drinkable spring water though. But its sawdust toilets ,solar showers and lots of ticks AS (no lyme diesease in our area ) email me at firstname.lastname@example.org
As time goes on and the Farm gets more established, I do want to establish an apprenticeship program for multiple people every year
Lastly, if you are not in shape, now is the time to start. Get on the treadmill or nordic track for 30 minutes a day. Otherwise, you simply will not last....
Awesome - that is what we need: places to get your hands dirty and see it in action; it's the only way to preserve ourselves. I'm in Seattle :-( If I can make it happen I will contact you. I'll bring a portable solar panel and deep-cycle batt to demonstrate a simple system to maintain rechargeables! CQB would be awesome - wouldn't mind trying 300 m+ if you have the space! LOL
Very, very true about the exercise - it helps mentally in times of high stress as well. Simply add pushups and situps for quick/simple strengthening. Too many people make it complicated/time-absorbing and quit early; dedication to daily basics can get you into excellent shape.
It would be great to see you guys out there.
We do have solar, our electric poultry netting is solar powered. One of my careers was in EE, so I am well versed in that. We will eventually establish a small power station, but no need for it at the moment.
We can make a pilgramage to polyface farm,about 60 miles away. Polyface is the pinnacle of pasture based farming and should be, imho, every pasture based farmers target goal.
AS, get yourself a copy of Joel Salatin's "everything I want to do is illegal" That will illustrate to you the problems that the USDA creates for the pasture based farmer and small farmers in general.
I would be honored.
As the ZHers know we've hit an iceberg, but if the ship isn't tilting by September I'll send in an application.
Just checked out the website, Hulk. Very, VERY cool. I wish I could spend a season with you guys out there boning up on my gardening. I still have a lot to learn from my mother. I wish I had pictures of her garden to share. One woman tends to a garden about the size of 1/4 of an American football field.
Consider it an open invite Chumbawamba
I am going to get at least one wall tent up, on a wooden platform (16 x 20) so that folks can have a decent place to sleep. The spring water on the property is the best!
The tent will look something like this:
Interesting that it was your mom who had the garden, because very old tradition was that women ran the garden while the men hunted.
She comes from such an era. Certain parts of Syria in the 1930s-1950s were still effectively in the stone ages. To this day, my mom works the garden and my dad does the hunting (mmmm, venison). In hindsight, I couldn't have been gifted with better parents and teachers, epsecially for what lay ahead. I take back all the rotten things I ever said or did to them. Oh, what a petulant little bitch I was :(
Anyway, I hope to make it out to Virginia someday. Except for that trip across the Potomac to Arlington Cemetery I made when I visited DC many moons ago, it will be my first visit.
hulk, done a decent bit of backcountry livin, got the stuff to bring. and spring on the property, key!!
man, you are lucky about no lymes, upstate NY is the world epicenter for it.
sending an email your way
You don't need a huge farm. You can grow enough for a family on a 1/10 acre plot in the middle of town.
Check out urbanhomestead.com for an example. We're growing a nice garden and raising chickens on our little 1/3 of an acre in our town.
Fixing this problem (or surviving it) starts at your door.
Soil blend from scratch:
1/3 peat moss, 1/3 various composts, 1/3 vermiculite
4' x 12' x 1' (depth) = plentiful garden for family of four, with leftovers for the root cellar.
No weeding, Minimal watering, Any backyard, Minimal work (time for other tasks).
Cons: upfront costs
This isn't about being lazy, this is working smart.
It is all about working smart WW. Last week I read an article describing how, in Korea, they spray their hen house wood shavings with lactic acid to break down the chicken shit.
They are getting a 10 to 20 year life out of their woods shavings, which is just incredible.
All you have to do is wash rice in water and let the water sit for a week. Then add milk and let sit for a week. Then spray in a sprayer. I just finished the week long rice water rinse,and sure enough, i have a sour smelling lactic acid solution. can't wait to see if it works. Otherwise, woodshavings are changed every 3 weeks, so this is a huge find...
Also important to make farming fun, especially for the sake of the kids. When I was a kid, it was just sheer drudgery and hollering...
hulk, what a beautiful story you brought to the ZH community table. lovely and sustainable ideas, optimism for our minds. wonderful. i was so f*cked up growing up, when i had to go to my aunt's farm every sunday. i thought they were poor, cause they didn't have enough money to shop at the grocery store. brain dead, but now i embrace it and have grown up with much appreciation that i have farmer/agriculture roots in my DNA.
where i live now, there are small plots of community gardens about every 4 blocks, right downtown. the city provides water for the drip systems. it is a beautiful thing. mostly college kids partaking.
Thanks Velobabe, we drank out of jelly jars as kids, which I used to hate! Could you actually use a sawdust toilet? Just curious. I refuse to put that shit (pun intended) in the ground where it pollutes our springwater. Don't believe in septic systems either. Most people are disgusted by the sawdust toilets, but they are clean and there is no smell. Composts perfectly...Thaks again for the kind words
You will do well,,, keep you eyes on the skyline, and your back to the wind...Jeremiah Johnson.. With all my good will..
LOL, thanks Geopol.(you will never, ever, find me jumping in an icy creek in the dead of winter to catch a fish!) It will take years, but the kids should reap the benefits...It takes about 20 years to get these pasture based farms working optimally...
Long but not entirely lost Geo.
If I may make one or three "obvious" observations...
1. You cannot fix the system from within the system. It is a logical impossibility. A system as old and embedded as the current one needs to shatter, burn, whatever before anything new can arise. We are in a phoenix from the ashes moment (long moment, but a moment nonetheless). Only a self-aware system can self-heal. The financial system is nowhere near self-aware.
2. In simplistic, but I believe hugely overlooked terms, what we are seeing is the collapse, total and absolute of the Supply-side oriented Industrial revolution, of which financial "innovation (what an oxymoron) is but the logical though ugly conclusion. As in, innovation went from machine to virtual, since time-to-market demanded that you needed to show the maximum change with the minimum input. The virtual world provides that outlet. A quant can think up a million ways to slice/dice and represent/mis-represent a number. Nature is demand side oriented (I would highly recommend Ishmael and the Story of B by James Quinn to the interested) and such others. That which goes against nature always collapses (we live in and are ABSOLUTELY governed by the laws of nature).
3. We consider six-sigma (statistically speaking) as the far out tail of the distribution, so low on probability that it almost never happens and if it does, it is a Black Swan or White Tiger of whatever event. Anyone notice how many Black Swans are happening all around us today, in every field? Freak weather, wars, collapses of major banks, Volcanoes, oil-spills.....the list of so called six sigma or at least 5 sigma events about. That should tell us something critical...
The center-line/mean-point has shifted... FOR GOOD. Not necessarily for the better, but for good! Our assumptions, by which we live/work are not working anymore. They are based in an old mean, maybe as old as 400 years.
I don't think living is 400 year old assumptions is very wise for us, three-brained intellectuals, is it?
"...the list of so called six sigma or at least 5 sigma events about. That should tell us something critical..."
(Clue: When God speaks, people listen)
"We're terrible animals. I think that the Earth's immune system is trying to get rid of us, as well it should."
"We're terrible animals. I think that the Earth's immune system is trying to get rid of us, as well it should."
everybody, we are only every body.
geopol has it it right, he consolidates quite well.
Thanks, Geo. Derivatives are the key.
Well covered and well said!
"matter of fact when even a medium size soveign goes under it will be over."
Roubini posits that Spain will be the one to crash the system. Too big to bail, too large a piece of EU to not take it down with it.
Spain? No, not possible for them to go down. They have "invested" so much in wind power and other green energy products. It's a regular utopia, and we all know utopias don't fail.
Whoa ho ho!
I know where I'm moving!!!
Bullfights and Sangria Bitches!!!
As you said. It will be Spain that triggers the final blow. Then the gold bitches better stay low and out of sight.
Mako, I am sincerely interested in your choice of a system that would work, if it's not compound interest. Simple interest? Cash and zero leverage?
Please respond. Thanks.
There are no systems that can withstand the essential larceny in the hearts and minds of nearly every man, woman and child.
The imperfection of the human construct will sabotage any system.
And as long as the vote exists, wherein one man can simply vote to himself that which she will not or can not earn, there is only one predestined outcome.
de Tocqueville would agree with you, with respect to democracy.
There used to be a Poll Tax. Anyone that did not own Property had to pay a Tax to Vote. This at least used to protect Property Owners from people that did not pay Property Taxes from Voting for benifits for themselves without paying either Property Tax or a Poll Tax.
I am all for Voting rights but if you do not pay Taxes or are on Government Welfare you should not have a say in how the Money of the People who do pay Taxes is spent.
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