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Open Thread: Greece Expulsion, Bernanke Revulsion, Algo Malfunction
Is the fabled Greek bailout not happening? Will Greece be expelled from the Eurozone finally? Is China withdrawing too much liquidity? Did Bernanke say anything true or factual yesterday? Will Goldman ever upgrade a stock with less than 20% short interest? Will algos ever stop gunning the market higher: can we close green 30 days in a row? How about 300? Will we ever see a billion shares traded in one day again (in other words a down day)? For this and anything else, this is today's open thread.
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I had dinner with a big BIG hedge fund boss the other day. Very 'famous' guy. He finds the entire discussion of public DEBT absurd. He totally believes in the system of floating currency. He even thinks---and says that his beliefs echo many of his fellows---that the whole public debt "scare" is the REAL problem, and that we do not in any way need to fear China or any ancillary issues viz debt repudiation and/or sovereign default. It was quite an eveving.
Did you end up agreeing with him ? Have we really got the world by the balls -?
My opinion is he is right in the sense that with fiat currency once people are afraid of it and think it is useless it is .So yeah the scary part of it all is the scare .
From Nathan’s Economic Edge this morning:
The DOW managed to barely make a new closing high and thus produced a new DOW Theory buy signal. This move looks parabolic, no corrections, this is not healthy, it is a buying panic. The internal indications are at insane readings. The number of new 52 week highs on the NYSE hit 601 yesterday, a number that is unfathomable, readings in the mid 300’s usually produce significant tops.
That “big BIG hedge fund boss,” IMO, is a walking example of moral hazard; his economic opinions are based on an assurance that the government and the Fed will continue to manipulate the markets his way—particularly until healthcare is passed. But, in reality, the government has nothing to give, as Henry Hazlitt says, “without first taking it away from somebody else—or from themselves.”
That fellow, IMO, is overlooking the fact that the definition of property includes an owner. In the end, that property has value; it is to bought and sold, or traded or whaever. But, to argue that debt is not important is to argue that property has no value. “Debt don’t matter!”
If debt doesn’t matter, then value doesn’t matter, and if value doesn’t matter, I don’t want to play this game.
Says Hazlitt: “Increased handouts to selected groups mean merely increased taxes, or increased deficits and increased inflation. And inflation, in the end, misdirects and disorganizes production…
“Practically all government attempts to redistribute wealth and income tend to smother productive incentives and lead toward general impoverishment.”
America already faces "general impoverishment." In the end, the economy will trump politics and manipulation and wrest the markets from the investment bankers. IMHO.
Central Banks Add Gold at Faster Clip | Expected Returns
March 18, 2010--As the fundamental flaws of major currencies become more apparent daily, investors around the world will take on a defensive posture and buy gold. The shift away from a fiat currency system centered around the dollar is well underway, and the window of opportunity to buy gold at reasonable prices is closing. From Bloomberg, Central Bank Gold Holdings Expand at Fastest Clip Since 1964:
Central banks added the most gold to their reserves since 1964 last year amid the longest rally in bullion prices in at least nine decades, data compiled by the World Gold Council show.
Combined holdings rose 425.4 metric tons to 30,116.9 tons, an increase worth $13.3 billion at last year’s average price, according to the data. India, Russia and China said last year they added to reserves. The expansion was the first since 1988, the data from the London-based council show.
Central banks, holding about 18 percent of all gold ever mined, are expanding their holdings for the first time in a generation as investors in exchange-traded funds amass bullion as an alternative to currencies. Holdings in the SPDR Gold Trust, the biggest ETF backed by the metal, are at 1,115.5 tons, more than the holdings of Switzerland.
“There’s clearly been a renaissance of gold in central bankers’ minds,” said Nick Moore, an analyst at Royal Bank of Scotland Group Plc in London. “It’s not just been central banks taking on gold, but a general shift for physical gold in the investment sector.”
In a clear sign of what lies ahead, central banks are adding to their gold reserves at the fastest rate since 1964…
http://www.expectedreturnsblog.com/
Bloomberg reporting flyonthewall cannot post stock reports on banks
http://www.bloomberg.com/apps/news?pid=20601087&sid=a6tF_zgzIeUQ&pos=5
Freedom of press new victim of big gov't
This ruling = another bright green light to insider trading. Next big insider trading case can use this decision to get it thrown out.
Insider trading is the trading of a corporation's stock or other securities (e.g. bonds or stock options) by individuals with potential access to non-public information about the company.
http://en.wikipedia.org/wiki/Insider_trading
Close your Barclays, ML and MS accounts, and sell the stock in these three, just let 'em fade away. Who needs crybabies like this?
Keep up the good work, ZH & FOTW. You are the leading edge of the news service for investors, and the old, bloated companies KNOW IT.
Bloomberg article:
Greenspan Says Banks May Need to Raise Reserve Capital by 40%
I quote:
Greenspan reiterated his view that Fed policy under his chairmanship didn’t lead to the housing bubble and the financial crisis by keeping interest rates too low for too long. Instead, a global savings glut led to low mortgage rates globally and a housing boom across nations, he said.
Pricking an asset-price bubble isn’t possible without damaging the economy, he said.
“Unless there is a societal choice to abandon dynamic markets and leverage for some form of central planning, I fear that preventing bubbles will in the end turn out to be infeasible,” Greenspan said. “Assuaging their aftermath seems the best we can hope for.”
Economists including John Taylor of Stanford University, a former Treasury undersecretary, have said that low rates helped bring about the housing boom and bust that led to the recession.
If it was a savings glut then why did house flippers flip houses on their saving instead of no 105 percent of value interest only loans. That the man would dare to say such a crock of shit is amazing.
Read the book "The Quants" by Scott Patterson. Machines are doing all the trading. Machines couldn't care less about valuation, price to book, the state of the economy, Greece, Ireland, or anything else. Machines trade based on momentum and based on what works (long XOM v. short CHK). The machines will drive the market up as long as it works. If it breaks it will drive the market down as long as it works. Only these idiots who appear on CNBC do any actual stock/credit selection any more and I suspect it barely shows up on the radar. This is why it is best to wait for the next black swan. The machines can't handle the black swans (obviously) and the people behind the machines sit around rubbing their eyes when their models break.
How can we kill trading and push the sheep into tax deferred accounts?
March 18 (Bloomberg) -- Congressional leaders are raising to 3.8 percent their proposed new Medicare tax on investment income in the final health-care overhaul plan, a Democratic leadership aide said.
The rate is higher than the 2.9 percent President Barack Obama proposed in February. Under Obama’s proposal, the new tax would apply to income from interest, dividends, annuities, royalties, capital gains, and rents for individuals who earn more than $200,000 and joint filers reporting more than $250,000.
House Speaker Nancy Pelosi, asked today if the tax applied to capital gains, said it would be imposed on unearned income “whatever category it is.”
It would be the first time Medicare taxes would cover investment income. The current 2.9 percent Medicare levy currently applies only to salaries and is split evenly between workers and their employees.
“This is a radical change from U.S. tax policy without much debate at a time when we should shift the fundamental core of U.S. tax policy in a more pro-saving and investment” direction, said Mark Bloomfield, president of the American Council for Capital Formation, a Washington group that lobbies for lower taxes on capital...
http://www.bloomberg.com/apps/news?pid=20603037&sid=afZBf5.6UZrc
I've been somewhat surprised more hasn't been made on this site of the possible black swan effects from the so-called health care reform bill given the not insignificant $497B in new taxes it raises.
"You! You can RUN, but you cannot HIDE!", the Lord Humungus, The Road Warrior
Bubble bubble boil and trouble....
Is the 3.8% tax on investment income going to be applied to Goldman?
"Is the 3.8% tax on investment income going to be applied to Goldman?"
Depends on if they un-earn it. They aren't Smith Barney.
Unearned income refers to income that is not a wage from
employment.
If Goldman is you last name then yes, if Goldman is your first name and your last name isnt Sachs then yes. If you change your name to Goldman Sachs then yes. If your referring to the GOLDMAN SACHS then no.
I read this this morning, and it made me realize just how impotently and passively we have been responding to the outrageous crime being perpetrated against us all by the bankers, in alliance with the government. We trudge dejectedly toward our destruction, whining a little, but marching along in line, just as we're told to. We're cattle compared to these people, who face far more serious consequences for their resistance than we, but who will not stand for injustice.
Sovereign Man Notes from the Field Date: March 18, 2010Reporting From: Pattaya, Thailand
Something interest happened this week in Thailand that I think says a lot about the country and its people.
For the last several months... well, years, actually... a large group of organized protesters has stepped up its calls for the current government of Thailand to step down. The group is known as the "Red Shirts" for the uniform they wear, and their top priority is to have open and fair elections to select a new government.
Over the last few months, the Red Shirts have grown more vocal, staging massive protests and rallies across the country. Their latest move was devilishly clever, in my opinion.
In the last few days, group organizers mobilized about 40,000 Red Shirt volunteers to stand in the blazing Bangkok heat, roll up their sleeves, and give blood... not for some natural disaster relief effort, though. Just to make a point, and a bloody one at that.
In this case, the Red Shirts collected about 300 Liters of blood and dumped it in front of the Prime Minister's residence in Bangkok... as my local friends have told me, now the PM must wade through a river filled with the blood of Thai people on his way to work.
I really admire the creativity. I could only imagine the media effect this would have in the United States if an antiwar group did the same thing at the White House.
Even moreso, though, I was struck by the peaceful nature of the protest, especially with such a strongly symbolic gesture.
You see, Thais are an extremely peaceful people. They have been fighting against one corrupt government or another as long as anyone can remember... but despite their passion for freedom, their rallies remain peaceful.
When the Red Shirts descended on the Prime Minister's residence, it was tightly guarded with police and military forces. The guards let them through, they dumped the blood, said a few words for the press, and dispersed.
I think in a lot of other places, the energy of the situation would have turned violent quickly. In Thailand, it was peaceful and respectful, and I think this says a lot about the country and culture.
Fundamentally, Thailand is an incredibly safe place to live exactly for this reason... its people are peaceful, and not just for catchy slogans or tourism campaigns. In fact, if you want to get the best idea about the true nature of a culture, look for situations like this when the country is going through a tough time.
In Thailand, the river of blood episode comes on the back of two years worth of extreme economic uncertainty and political instability. This is far from Thailand's finest hour... yet the situation is still completely nonviolent, a clear indication of the Thai people's temperament.
Another example is what's happening in Chile. Rocked by a series of historically powerful earthquakes and aftershocks, the country has been dealt a seriously bad hand lately. And yet, in their darkest hour, despite the difficult conditions without food or power, Chileans still conduct themselves in a non-violent, civilized way.
Mainstream media sources, always on the lookout for guns and violence, paint a different picture of both countries. Even if they have to make up facts, they want people to believe that Thailand is about to descend into chaos, and that Chile is already there.
It's not true. Chile and Thailand are both going through some challenges at the moment, but the civilized and non-violent actions of the people are demonstrative of how truly safe both countries are, even during difficult times.
If conditions in the world happen to turn truly sour, I would have no problem calling Chile or Thailand home because both cultures have already been tested by adversity.
See the video of what I'm talking about here.
Until Tomorrow,
Simon Black
Senior Editor, Sovereign Man
+1000
great post with some really vital information. There is so much clamoring in this country for some alternative and sensible responses to the out of control, criminal, cartel systematically destroying our economy, society and our nation. here is well reasoned and thoughtful response to that question.
Did anyone else just notice the Aussie futures drop 1% & then snap right back up...easy money if you were quick enough...how bizzare
follow the stolen money
By JOE BAGEANT
If you have the balls to stand up to Gunther Gatlin, and pay in cash, you just might manage to get him to do his job, which is fixing cars. Gunther’s Garage is jammed in between an unpainted shotgun shack and a weedy vacant lot on a skanky little side street in Winchester, Virginia. The place is really an illegal junkyard, but slips through the city code masquerading as a garage.
Patronizing Gunther’s is not for wallflowers, gays, feminists or Yankees. You do not go there unless you don’t mind being insulted. Gunther has a habit of greeting customers with remarks such as: “So what the hell is your problem?” Once he addressed gay guy as “Twinkles.” Sometimes he will just stand there, grease all over his Hawaiian shirt, pulling on his suspenders, and with a poignant pause, ask what a customer thinks is wrong with the vehicle. He listens thoughtfully, eyes toward the ground, then looks up and says, “Well that’s the dumbest goddamned thing I ever heard.” Gunther can make you feel like crawling away through the crack under the garage door, or make you feel like popping him in his unshaven jaw.
However, one thing Gunther will not do is cheat or overcharge you. Another thing he will not do is let a vehicle fail state inspection. Just about any vehicle that can be pushed into the garage’s oily littered gloom will roll out the other side bearing the great state of Virginia’s stamp of road worthiness. As the owner of an ancient rotted out, Toyota truck with bald tires, Gunther’s got my business for life.
Beyond all that, Gunther is of a vanishing breed. He’s one of those crusty homegrown experts who will expound on everything, from the vicissitudes of the stock market to America as an emerging police state: “It starts with car exhaust standards, and ends up with me having to pay for anti-terrorist training, so I can get the new license you gotta have now to tow cars. Just in case you hook up to a car with a goddamned bomb in it.” I recommend that you not ask him about it because the entire tirade is almost forty minutes long.
Last time I was there, Gunther was reared back in his one-armed swivel chair, behind a desk piled with Seven Eleven sandwich wrappers, rusted obsolete tools and cigarette butts, holding forth on the stock market. Gunther plays the market in a small way, small enough that his broker never returns his calls.
“I’ll tell ya what the stock market game is all about.”
I didn’t remember asking, but I knew I wouldn’t get my turn signals fixed unless I listened.
“Used to be that a guy would pick a stock based on the facts. After a while, it got so that people looked around to see what other people’s average opinion was, and they bet on that. Nowadays you look around and try to guess what the average opinion of the average opinion is. If you can guess enough other people’s guesses about other people’s guesses, then you bet on that and you make money. Don’t fucking matter if the stock is a dog. The stock market now runs the whole damned economy based on what fools believe other fools believe other fools believe. Run by a bunch of economists who figure that if they make enough fools believe the stock market is OK, then the economy will be OK. What if I ran my business that way? What if all I had to do was make people believe their cars was fixed? I’d go broke.”
“You are broke, Gunther.”
“That’s beside the point.”
* * *
Studs Terkel once said that writers often portray working folks, such as cab drivers and garage mechanics, as having too much worldly wisdom. Given that advice from a lifelong role model, I have always tried to avoid romanticizing such people for the sake of a good column. Still, there is always the danger of overdoing even the best advice. The fact is that grizzled old tradesmen do get in a good lick now and then. And Gunther gets in more than most, especially about politics and the economy.
Gunther on bailouts and stimulus money: “The stimulus money will work if enough suckers believe it will work. But it’ll only work for a while, until we run out of stimulus money. Then somebody’s got to print some more and get ‘em to believin’ again. It’s like poking a frog in a frog race for one jump at a time. You ain’t gonna ever see the finish line”
Gunther has been a conservative all his life, though not necessarily a Republican. He once liked Ron Paul, so go figure. He admires Kentucky senator Jim Bunning for being against the bailouts, which to Gunther and Bunning, prove “socialism is alive and well in America.” He says, “I bombed a bunch of Koreans so I would not have to live under communist socialism,” thus proving Studs was right that colorful working mooks are not necessarily the bearers of keen insight. Gunther says, “When it comes to the bailouts, somebody should’ve eat those losses like I eat mine. And it should’ve been the shitbags who caused them. The financial big shots with their jacked up crooked schemes. Let them take the hit, instead of spreading it around among the people.”
“Well, that’s socialism,” I said. “It’s socialism for the banks in the service of capitalism.”
“Huh?”
“Gunther, tell me the truth. Do you do you actually know the difference between socialism and capitalism?”
I know damned well Gunter does not, and I figured this was my chance to sneak in one of my educational commie lectures. But he slid out of the question with a “Lemme get back to you in that.”
* * *
Gunther might be a conservative, but there are a hell f a lot of people on the left who would agree with his opinion that, “Them what cooked up this financial mess should damned well eat it.” When Gunther and Republicans members of the petty right pose the financial catastrophe in terms of the people vs. the elite group who caused it (the shitbags), they are using the context of class struggle, whether they choose to use that term or not. So does the Tea Party when it talks about Main Street vs. Wall Street (Would that the Teapartiers were as smart as Gunther).
The petty right and the bumbling left find themselves unexpectedly meeting one another these days, as they navigate the craters of our bombed out economic landscape. Were it not for the ideological war in progress (it’s not a cultural war, no matter what the university pundits say, it’s a capitalist state sponsored ideological war), they would probably form a powerful combined populist movement that would scare Washington right out of its silk shorts. Naturally, political strategists on both sides do everything possible to keep the rank and file from discovering the growing overlap of liberal and conservative thinking (or in some cases, nonthinking).
Not many working people on either side still believe that what is good for Wall Street is good for Main Street, or that very much trickles down from Wall Street to our level. No matter how much money we sweat for, or borrow--or Congress borrows in our name without ever asking us--and throw at Wall Street, the money sticks up there on the fortieth floor. Then it disappears into that bizarro funhouse mirror of the real economy, the virtual economy--euphemistically called banking and investment and the market. Our market system of “investment” is based upon getting in at the right moment, grabbing other people’s money, then getting out fast . Which pretty much describes the key elements a bank heist.
Despite the advice of stock brokers everywhere to think long term, be patient and hold on, the game goes to the swift. Consequently, milliions of American retirees are still playing bluff poker on eTrade long after the big dogs behind the casino mirrors, the people who can really count cards (because they marked and dealt them), have moved their stakes offshore. As far back as 2000, the big bucks were on the move, away from the fray and sucking more money in their backdraft.
Some people understood at the time that it was a banker rigged game from top to bottom, one that included an elite cadre of players ranging from Wall Street to the Fed, the IMF and the World Bank. Most saw only a few aspects of the global financial growth-bot. But they saw them clearly enough to raise holy hell about it. And were clubbed down in places like Seattle and Miami. When it comes to truth vs. the elite’s muscle, there is no contest. In a show of elite muscle, some 3,500 cops were summoned to silence the 2001 Washington D.C. truth tellers. That is one cop for every three protestors at the Anti-capitalist Convergence. Total cost of policing, steel fence and concrete barriers and precautions came to $30 million--or $37,500 per protestor. I had many friends at that protest, and I cannot think of one who would not have stayed home for half that amount.
America’s bourgeois birth $ign
To the little guys like Gunther, the collapse looks like the work of immoral men within the system. That is true to a degree. But immorality was institutionalized in America a long time ago, when bourgeois capitalism monopolized not only wealth, but power and prestige in the United States, the only nation it could have happened in at the time. Early America was a clean historical slate. It had never passed through a feudal era or centuries of domination by nobility’s power and wealth. No one institutionalized church monopolized its morals. Born simultaneously with, and suckled on capitalism, America’s mercantile bourgeoisie never faced any of the historical forces that created tension or resistance to its aims. Freed from the Old World’s historical competition, and blessed with unimaginable natural resources, plus an immense and willing immigrant labor force, the national bourgeoisie grew wealthy and powerful. From its ranks grew new mercantile, industrial and banking elites, and new strata of dominance and power. Today they manifest themselves as the complex corporate-financial complex that owns our national production, employment, legal system and our politicians.
The bourgeoisie could not have produced any other kind of elites, because by its very nature, bourgeois ascendance and success goes to those individuals who most value material wealth. Those of extreme wealth necessarily dominate. And extreme wealth cannot be accumulated by individuals, except by extracting it from the multitude of other individuals—a little or a lot from each member if the working masses.
* * *
By 1870, probably much earlier, when the robber barons emerged, American mercantile industrial capitalism was unstoppable. By 1917 the inherent American capitalism was inextricably bound up in industrial violence on a world scale. Destruction and replacement of materiel on a scale previously inconceivable, industrial strength warfare proved immensely profitable for industrial capitalists.
The industrial warfare of World Wars I and II, and even “the atom bomb,” now seem quaint, compared to today’s vastly more profitable technological warfare, which, unlike the previous warmaking style, we’ve come to embrace. Whereas the atomic bomb spawned the largest peace movement in both American and world history, techno-war has spawned such things as computer war game market, with its virtual “mass combat role playing,” and fantasy war making.” We have embraced the machinery of our undoing as recreation.
As I stood on the oily gravel in front of Gunther’s Garage, I thought of the defense satellites whizzing overhead. And how somewhere over the Middle East, killer drones are being operated remotely by Americans in Nevada bunkers, as virtual and as removed from the blood and fire as any computer game. Both the real and the virtual warfare flourish, both fed on virtual money of the banking elites. If real money were required--money not based upon endless future debt in an imaginary world of unlimited growth and perpetual war--neither would exist.
For now though, the capitalist growth-bot will march on unimpeded by the greater mass of Americans. Until it crashes. It is very hard to imagine capitalism being brought down by the uncomplaining masses below, who draw sustenance from it and offer their sons and daughters to its wars without complaint.
On the other hand, the inevitability of its collapse from within, due to its utter unsustainability, is heartening in a grim way. Billions will suffer. It seems the faceless laboring masses never make a gain, even an inadvertent one, without immense suffering. And even when they do, any advantage they gain is financialised in the virtual economy by the elites, and loaned back to them at compound interest, then tranched for more virtual profits, and on and on and on. Such is the architecture of our sickness.
Money for nuthin
Defenders of capitalism claim that there can be no real economy, no real material value created by the real people on Main Street, without the financing of Wall Street’s virtual economy. Allegedly, they are so intertwined as to be the same thing, which they are, and that no other way of doings things is possible, which is patently untrue. The storyline goes that without virtual economy financing from Wall Street, without the ever-expanding debt that drives the quest for limitless growth, the world would end. So strong is this hallucination that capitalist theoreticians such as Guy Sorman say, “even in this time of financial crisis, the global benefits of the new financial markets have surpassed their costs.”
What the fuck globe are ya living on Guy? Have you looked around lately? The global financial crash, which continues to cause world wide misery, is a benefit? As my webmaster Ken says of big picture economists, “Climate is what they write about, but weather is what we get.”
The Nobel Prize winning economist also declares, “Market mechanisms are so efficient that they can manage threats to long-term development, such as the exhaustion of natural resources, far better than states can. If global warming does become a real problem for example, price mechanisms or a carbon tax pollution [making the right to pollute sellable for profit] would easily encourage a more efficient use of energy [ only the rich and corporations will be able to afford energy]. But then, I’m not too surprised at Sorman’s remarks. Economists have jobs only by serving the economic regime in power as court eunuchs.
For all the Marxist economists there are in the world, you will not find a single one working on Wall Street or in Washington. If there were, Americans would better understand that the economy is not so much one big cohesive glob of real economy and virtual economy, one big glob of inseparable goods and financial services as a single value, as our economists would have us believe.
Goods and services have at least two values. The first is their use value, the value of a commodity or service in real on-the-ground terms, such as useful value of a tool, or shelter or food, or worth as a service, such as transport.
The second is their transactional value: how much money banking and “investment” can make controlling the money involved in the transactions surrounding those goods or services, or financing the creation of new ones through loans, marketing and institutionalized capital control.
The consequences, even in creating unneeded services and products for the sheer sake of growth, even pointless are enormously profitable. For example, water, is bottled at a cost of a few cents and sold for a buck. Much of it is just bottled water from a municipal source. The consumer has already paid for such water twice, once in taxes and again as a utility bill, but nevertheless buys bottled at a little over 10,000 times the municipal cost. Of course not all of that difference is profit. Some of it goes into petroleum based polyethylene terephthalate (PET) bottles, boosting the oil industry and contributing one third of our national waste stream. Bottle production and bottle recycling both pollute our water supply, helping push us to that day we will all eventually be forced to buy bottled water. Until then, our commodity fetishism will suffice; we can buy “Boulder Water,” bottled tap water from Boulder CO, at 11,000 times the cost of the tap water, because, well, it’s from Boulder. The glories of commodity capitalist productivity!
There is no arguing that there is no greater method of creating economic growth than capitalism. Even Marx had no qualm with that. But growth is like crack cocaine for bankers and economists, both of which see the world purely in terms if wealth accumulation and production. For we who do the producing (or once did the producing back when workers were still considered a necessary evil) the truth is that American capitalism is like a wine press. It squeezes the masses for the money representing their productivity, in a process otherwise known as the virtual economy. A few people in the virtual economy become multi-millionaires. The rest of us pay the freight financially, socially and ecologically.
It will get worse. Consider Obama’s ramped up mountaintop removal program for coal energy. Corporate coal and Wall Street bankers are overjoyed at the prospect of adding to the 143 already-leveled mountains and their attending toxic water zones. The frog of capitalism will be poked in a big way for another jump.
The end result will be more energy (I was going to say “of the dirtiest kind,” but the administration is pouring the juice to nuclear energy too), that will continue to be squandered in driving our wasteful toxic lifestyle. One that doesn’t even seem to be making us very happy, but nevertheless drives autonomous capitalism’s virtual economy. So “The Administration” (a spooky faceless matrix like term, when you really thing about it), welds government policy onto coal and nuclear power, and every single aspect of the virtual economy, from financing to insurance and marketing, makes big money—securing an even firmer grip on the nation’s everyday life than it already has. If that does not scare you, then you deserve the sci-fi horror you are about to get, compliments of the virtual economy. But the rest of us do not.
Meanwhile, the “real” economy as most of us experience it, is stretched out dead as a day old codfish down there on Main Street. And all Obama or any other politician stewed in the super-capitalist ethos can do is pump money into the banks, and then beg the bankers to come out of their gilded lairs and trickle on the corpse. That’s the problem with capitalism--capitalists.
When it comes to the choice of capitalism vs. socialism, I do believe it’s over in America. Time to choose came and went a long time ago. And we chose a system that, essentially promised something for nothing. Making money off money. As Dire Straits put it, “Money for nothing and your chicks for free.”
Now we find ourselves flattened again, begging the financial elites to come piss in our ear one more time. As if they could hear us from their Manhattan townhouses, vacation homes in Provence or their yachts off Martinique.
Pretending the thrill ain’t gone
What would happen if America had leadership that stood up and coolly, intelligently described the economic and ecological peril we face, both of which are completely interrelated. What would happen if a president told the people, “What we have been doing has obviously not been working [they’d sure as hell agree on that], so we are going to have to remake America to save it, and it’s going to mean real sacrifice.” And what if he could do so without capitalist forces sending out ideological swiftboats to blow him out of the water, or launching hate campaigns against him, branding him as an evil fascist eco-socialist, or whatever.
I dare say the number of Americans who would respond, be willing to sacrifice and meet a challenge issued by cohesive, focused leadership, might surprise us. They might well do it, if for no other reason than that Americans are the moist authority worshipping people on earth, outside of North Korea. The reasons why we will never hear a president or a cooperative congress say those things are manifold more than the reasons to believe that we will one day hear it.
Maybe next time—even though there can be no next time in the usual sense, because the rip-off is in and it is total—we will choose better. The planet and the resource base that creates all wealth is pretty much shot, or soon will be. Over six billion people, otherwise known as the masses--though we are not allowed to use that commie term in America— are closing in to finish off what is left.
America and the industrialized world as we have known it are unrecoverable. Some of us find a certain kind regrettable of justice in that. There will be no recovery, but there will be numerous manufactured illusions of recovery. As Gunther says, we will poke the frog for one jump at a time. Deny the obvious limits of the earth’s sustenance, dry hump the ghost of a sick and unjust prosperity and pretend the thrill ain't gone.
* * *
What little will remain of sustenance on the planet will have to be distributed by the state, simply to prevent riot and warlordism; but not until the nations have finished warring against one another for resources. What kind of state we end up with between now and species extinction, will be determined by the quality of our own character, the courage and moral stamina of the people.
Turn off your computer, go outside, and look around you. Everything looks normal, doesn’t it? Because everyone’s average opinion of everyone else’s average opinion is that things will somehow work out. We’ve placed out bets, and then gone about business as usual, safe in the belief that sooner or later there will be a recovery, a return to things as they were. Most Americans assume that, yes, everything will be OK.
Which is exactly why it will not.
Anyway, I’m sitting down here in Mexico thinking about how the inspection sticker on my old red truck ran out back in February. Why I should be worrying about that when I have half a bottle of tequila and a pile of limes in the refrigerator, is beyond me. Once a fearful child of the empire’s many rules, always one, I suppose. In about a month, I’ll have to go back to the States to do my income taxes. While I’m there I will sneak the truck across town and get Gunther to slap a sticker in the poor beast, bald tires and all. And Gunther, sure as hell will insult me. And I will get off cheap once again, in the empire that insults me more than Gunther ever will.
Joe Bageant is author of the book, Deer Hunting With Jesus: Dispatches from America's Class War. (Random House Crown), about working class America. He is also a contributor to Red State Rebels: Tales of Grassroots Resistance from the Heartland (AK Press). A complete archive of his on-line work, along with the thoughts of many working Americans on the subject of class may be found on ColdType and Joe Bageant’s website, joebageant.com.
It's only junk to a person who thinks Wall Street and capitalism are the only solution to our problem.
I happen to like this post too. Someone is junk happy today ;-)
wordy, but worth reading. Thank you Frumundacheeze. Again a good post and it got junked twice.
Somethings gotta be done about that.
http://www.wallSTonion.blogspot.com
The Drudge Report recently confirmed from official unofficial sources that the Obama re-election team for 2012 has officially changed their strategy from "HOPE" to "COPE." Key players on the administration have been quoted as saying "We have reason to believe that there is no way in hell, the American public is going to go for that bullshit of "hope" and "change" this next time around." We really need to get in their heads and sympathise with the people and their troubles, because this is no joke, times are hard during this depression.
Obama's administration was quick to point out that even though we didn't deliver on pulling out the troops in the middle east, and we gave Wall St a bunch on money, (700 billion) we still did a pretty good job of giving the people that feeling of hope and change. The stock market crashed; but that was not are fault, Obama was quick to point out, that was not the "change" we expected, but hay it works. " All people have left is the "change" in their pockets, so they will be really appreciative of us using the word "COPE" in the reelection in 2012.
Off record some officials have privately said that the chances of Obama winning the election are pretty much non-existent. We realize now, but didn't know the, that he is a one term er President. "We had no idea that the stock market was going to crash right before the election said Obama. " "In fact, it kind of pisses me off says the President as he reached for a cigarette out of a brass case." Sometimes the President feels like this was some kind of prank from the south; to put him in the White House right when the stock market crashes.
So COPE is the charged word of choice for the next election and DOPE will also be dispensed and given out as MEDICINE to help people COPE with their new problems of CHANGED economic status. Yes , I did did say DOPE; marijuana (for you old timers) will be used to lure in youth to vote and "rock the vote." Obama had told the Feds, "let the people, grow their medicine, and it will be abundant; help them COPE with the "CHANGES" that the future hold. "
When Obama was questioned as to why are we in Afghanistan when he promised us no more wars? Obama adeptly described the DOPE game and said "that's where the DOPES at, so if we want to help the American people to be able to COPE we need to supply and protect those resources and pathways. It's simply in the best interest of the consumer, and therefore we will stand by the Afgan and Pak a Stan police and arrest any terrorists who fuck with our DOPE!
In the mean time, get your T-Shirt here and right now, and be one of the first to show you are down to smoke some DOPE with President Obama! The Price is Right at $10 for all you economically challenged folk, who barely escaped the "Perfect Storm." Please no checks, or credit cards. Money Orders OnlY. Please make payable to, uhm, to "Patrick the Painter."
Please include what size you would like and what color. PLease allow 3 months for deliverly just because these "T's" are so HOT with the younger generations.
Nothing important to contribute here.
Guy at work today was all agog and ooing and ahhing over how much the market was up . He sneered at the idea that maybe, just maybe , this was a market manipulated by fed funny money liquidity at the major financial players hands . When J6P starts worshipping the tick , its time to get scarce .
Yet Again
March 2, 2010
By my friend,, Fred Reed
Guadalajara, Mexico
Mexico, if left alone, would be a reasonably successful and stable country of the upper Third World. It isn’t Haiti, isn’t Bangla Desh, isn’t a dying patient with multiple tubes in every orifice. If not strong-armed into chaos, it would be all right.
But the United States won’t leave it alone. Washington is pushing it to wage Washington’s “war on drugs.” As usual, Washington has no idea what it is doing. Nor does it care. Should untoward consequences follow, it will be surprised, this being the characteristic condition of American foreign policy.
Untoward consequences are quite available. The narcotraficantes that Mexico is supposed to fight for Washington are a formidable armed force. They have unlimited money, which they use to buy heavy weapons. They have unlimited money, which they use to corrupt the government of a comparatively poor country. Mexico does not have the wherewithal to fight them. The army here is small and poorly armed. This is reasonable since Mexico has neither territorial ambitions nor enemies. Except, certainly in effect, the United States.
The government is outgunned by the narcos. Further, the traffickers have the advantage of being dispersed and invisible. The situation is, or quickly could be, exactly that faced by the US in Vietnam, Iraq, and Afghanistan: narcos can appear from nowhere, blow up police stations, assassinate judges, or kill a dozen teenagers at a party. Then they disappear.
Thus they can destabilize the nation and hold the population hostage. This doesn’t bother Americans, who barely know where Mexico is. It bothers Mexicans, who know their people are dying in an exported American war.
Bear in mind that anti-Americanism thrives here and throughout Latin America. Much of it is justified; some of it isn’t. The US population, the most comprehensively ignorant of the advanced world, knows nothing of the reasons or of the countries. But the hostility is real. Shrugging it off could prove a mistake.
If Mexicans had to choose between the drug lords, who are often seen as counter-culture heroes, and the US, seen as an enemy too dangerous to be openly called an enemy, many would go with their compatriots in the drug trade. A repertoire of narco-corridos, songs glorifying the narcos, exists. Los Tigres del Norte in Sinaloa have specialized in these.
Although Mexico doesn’t have America’s festering antagonisms--blacks hate whites hate browns hate men hate women hate Jews— there are groups, particularly in Chiapas, who are potential insurgents. If they should ally themselves with the narcos and go to the mountains, or set up cells in the cities, the result would be a long, bloody civil war: Afghanistan on the US border. This is not Freddian fantasy. Thoughtful Mexicans worry about it.
The Mexican army cannot handle an uprising of any magnitude. The Pentagon would then intervene to “help” Mexico. Que dios nos ayude.
he Pentagon is working toward toward intervention, whether it know that it is or not. There is something called the Merida Initiative, in which the US supplies money and advice to transform Mexican society to combat the narcos. The colonels in the Five-Sided Squirrel Cage really believe they can reform the Mexican judiciary and infuse the police with virtuous fervor for American ideals. I spoke to a field-grade American officer about this. He had taken a six-month intensive course in Spanish at the Defense Language Institute and spoke less Spanish than my daughter did after two weeks here. The money would be used to reform the Mexican government, he said, which would then make short work of the narcos. He explained this with the earnest mission-orientedness that officers display when they are about to do something senseless.
I didn’t say, “Give me a freaking break,” because I knew it would accomplish nothing. You don’t “reform” countries you don’t understand by solemn brainless enthusiasm. The money would vanish like water in dry sand. Mexico does not want to be remade in the image of the United States, for remarkably good reasons. The more the US meddles, the less legitimate the government that permits it will be. Not a good idea.
Why does the military regularly misestimate the nature of the Third World? Because soldiers live, and think, in a rigid, conformist, orderly world in which good (us) and evil (them) are starkly distinct, in which one gives orders and things happen, in which all are on the team and working toward a common goal. Officers are insular, self-righteous, ruthless (after all, they are fighting Evil) and clueless. The workings of the Third World are the polar opposite of orderliness of the military. The colonels are instantly lost in the complex relationships, informal arrangements, family loyalties and invisible politics of Latin America. And they do not understand that when they intervene, they are not the good guys.
This is why we hear again and again from some buzz-cut horse’s ass with stars on his shoulders about how we are trying so hard to “help the Afghan people.”
One might ask: Why are drugs Mexico’s problem? Americans, huge numbers of them, want drugs. If they didn’t want drugs, the narcos couldn’t sell the stuff. But the American government doesn’t want its citizens to have drugs. Fine. Let the government attack its own citizens. Leave others out of it.
Washington isn’t going to rid the US of drugs any more than it rid the country of alcohol. Popular demand is far too great. The US crawls with crank labs, open-air crack markets, meth cookers, fields of marijuhweenie too large not to have been noticed by state authorities. California talks of legalizing grass in defiance of the Feds. All God’s chillun loves drugs—good ol’ boys, Ivy League students, their professors, high-school kids, middle-class suburbanies, congressman, musicians, and several Republicans. Mexico is going to change this? They must be smoking something good in DC.
A friend recently told me of being in a boat off Florida with several honeys in bikinis aboard. A Coast Guard cutter pulled alongside because the guys wanted to look at the babes. My buddy, being sociable, hollered, “What are you guys doing?”
“We’re looking for drugs.”
“Oh. We’ll follow you.”
Whereupon the Coast Guardies broke out laughing. Even the cops don’t really care.
Mexico can’t fix things, if indeed they are broken. Leave the place alone.
"The US population, the most comprehensively ignorant of the advanced world, knows nothing of the reasons or of the countries."
The USA is number 1 in everything we want to do and everything the rest of the world hates that we do.
"Thus they can destabilize the nation and hold the population hostage. This doesn’t bother Americans, who barely know where Mexico is. It bothers Mexicans, who know their people are dying in an exported American war."
It's in the US control systems' best interest to keep a slowly simmering bogeyman on call south of the border. All fascist regimes should have multiple evil empires in their repertoire when trying to frighten the children into compliance. You know, rotation, like you rotate tires so they don't wear our prematurely. If it ain't illegal Mexican workers, it will be dangerous Mexican drug lords. Throw in the Iranians, Russians and the Chinese and you have a great mixed salad to serve with the main course of unbridled government/corporate greed and corruption. Even fascist productivity is up.
CD...
Sorry to be so late to the party (simply amazing mid March weather in my neck of the woods). Just wanted to "throw my hat into the ring" in support... don't sweat the "junkers"... if you're not shakin' them up, you have nothing to say!
If we can't wake them up, they'll get there on their own one day... a little too late but, life's a bitch.
Beautiful assessment and summary there.
Legalize all drugs now.
+1
I do not condone drug use, but clearly the solution has become exponentialy more destructive than the problem ("divide and conquer" being the centuries old MO)... keeps the serfs occupied though.
Nor do I. "[D]ivide and conquer"...couldn't have put it better.
I have spoken with an expert (that I trust, and honestly, it takes a lot for me to trust an 'expert'. He has so much experience in ALL THINGS though that I believe anybody would listen to him. I think Bam would sweat balls if he had a face to face) on the subject and he said it is really the only option. I asked what would happen. He said, "There would be a prolonged period where mass confusion reigned..." "How long?" "Maybe up to 20 years. (pause) In my opinion, it is the only way to kill the DRUG TRADE." We must KILL THE DRUG TRADE.
!Gracias!
I was just, last night!, telling some friends about the cartel problems: Beltran Leyva, Sinaloa, the Zetas (awols from the Mexican military and law enforcement) and the infamous Mara Salvatrucha. Total blank stares. I was that one that had egg on my face. One of the girls had spent over 3 years living in Spanish speaking countries and only when I mentioned "MS trece and dieciocho" did she recognize what the hell I was talking about. The United States is so infiltrated with cartels - every Latino in the US knows this - but the Americans are so completely, so blissfully unaware it is scary. A breakdown in society would leave many vulnerable to them - "right-wingers", often worried about Posse Comitatus and troops shooting civilians, never think about the HUGE underworld of narcos that will dominate the scene in the absence of order.
http://www.youtube.com/watch?v=k55NrIu2wbk
http://www.youtube.com/watch?v=JydJw6zF38s
As usual, Washington has no idea what it is doing. Nor does it care.
I think the above line sums up DC perfectly and precisely why EVERYTHING is fucked up. EVERYTHING
The drug war typifies the Gov'ts mindlessness and lack of accountability. What other entity could continually fuel with cash
such a failed concept and program, while at the same time, creating
a problem that we will eventually end up dealing with Militarily?
Legalize the fucking drugs, release the pot smoking prisoners and replace them with their proper heirs, politicians and wall street banksters who have brought the nation to ruin
My recommendation of the day: ZH's own post of this morning, "Portugal Prepares To Sell . . . " as a topic burning for some serious attention from us all.
all we need is one rogue line of code... please, if you are out there, write the code and let history be made. please...
I will wager such code could only be written with A, G, C, and T.
I am convined...wait what was the first thing???? Oh yeah, I am convined the IMF will now bail out not only Greece, but everybody. Then the World Bank will get involved and in a few years all the Nations of the world will be taking loans from them and using a new, world reserve currentsea. BS who?!?!?! Green in mining/energy/commodities forever; Doelarr to flatline in 3.......2..........1..........
By MIKE WHITNEY
Alan Greenspan is back, scheduled to appear at the Brookings Institute Friday to deliver a 48-page explanation of why his low interest rates and regulatory neglect did not cause the financial meltdown. The contents of the ex-Fed chief's apologia have already been released to the press. It's just more finger-pointing and buck-passing; 48 pages of the-dog-ate-my-homework excuses in Greenspan's cryptic Fed-speak.
See? It wasn't Greenspan's fault, after all. It was "the savings glut" or the "undercapitalised banks" or some other such nonsense. The bottom line is that everyone else was to blame for everything that went wrong. Everyone except the Teflon Fed chief, that is.
Does Maestro really think he can salvage his battered reputation with this charm offensive?
Greenspan tries to acquit himself on the main charges; that he kept interest rates "too low, too long", and that his support for deregulation expanded the use of risky financial instruments (derivatives) These are the two main factors which triggered the meltdown. Greenspan defends himself on both counts, without success.
He rejects the idea that low interest rates created the housing bubble because mortgage rates are linked to long-term rates which the Fed doesn't control. That's true, but it's also a poor defense. Everyone knows that tighter monetary policy cools off speculation, forces financial institutions to reduce leverage, and slows credit growth. If the Fed didn't believe that low rates increase spending, than why would they lower rates every time the economy begins to slow down? Interest rates matter! End of story. Greenspan's argument isn't even worthy of a response. It's ridiculous.
Greenspan also invokes the "global savings glut" claim, which he reiterates at every opportunity. But that's a feeble defense, too.
Yes, the massive current account deficit is destabilizing and, yes, China and Japan do save "too much" while Americans consume too much, but so what? That's why we appoint policymakers to intervene when necessary to avoid a global crisis. But, of course, Greenspan doesn't believe in regulation, because he thinks the market is the manifestation of Ayn Rand’s immortal plan and mere humans shouldn't interfere in its divine workings.
Greenspan: “There is nothing involved in federal regulation per se which makes it superior to market regulation.” That sums it up nicely, doesn't it?
Greenspan refused to perform his task as regulator because he was intellectually and morally opposed to regulation. He's been a consistent Randian on that point. So, naturally, the imbalances and fraud grew until the entire mechanism broke down. It all could have been avoided if Greenspan had done his job.
Greenspan's conduct was shaped by his anti-government, anti-regulation, laissez faire fanaticism. Ideas have consequences, which is why the country is still in a Depression.
Mike Whitney lives in Washington state. He can be reached at fergiewhitney@msn.com
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