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As Spain's Socialists Lose Local Elections, The Bond Vigilantes Stir
A year after an insolvent European continent realized it is long overdue to implement fiscal consolidation, aka tightening, also known as 2010's keyword of choice: "austerity", the political regimes who have supported fiscal prudence are one after another falling victim to the general population's dissatisfaction with the gradual elimination of a myriad of socialist policies. Following recent electoral losses in Germany, not to mention the overthrow of the Portuguese government, which like Belgium, continues to be in limbo, today we move on to the second to last domino in the PIIGS chain: Spain (and Italy is next: S&P took the time at 6pm on Saturday to remind everyone about that particular unpleasant fact). Per Reuters: "Spaniards began voting on Sunday in local and regional polls expected to deal heavy losses to the ruling Socialists, who are blamed for widespread unemployment that has off a wave of pre-election protests. Tens of thousands of Spaniards demonstrated in the past week in city squares around the country against austerity measures that have kept a fiscal crisis at bay but aggravated the highest jobless rate in the European Union. [as a reminder a webcam of the Madrid protests can be found here]. The protesters have called on Spaniards to reject the Socialists and the center-right Popular Party, the main two political options in Spain." The problem is that when you overthrow socialists, it is unlikely that you will get more socialism down the road. Which, however, is what everyone in this country of 21% unemployment, and nearly 50% joblessness in the 18-25 age group really wants.
More from Reuters:
Polls show the Socialists could lose strongholds such as the Castilla-La Mancha region, where they have controlled the regional legislature for decades, and the city of Sevilla, where they have been in power for 12 years.
If forecasts hold true, the outcome will be a rebuke for Prime Minister Jose Luis Rodriguez Zapatero, applauded abroad for his fiscal discipline during the euro zone crisis but unpopular at home as the economy stagnates.
The Socialists, in power since 2004, are also looking likely to lose the next general election, which is scheduled for March 2012, but could come earlier if big losses on Sunday spark a leadership crisis within the party.
After the euro zone debt crisis forced Greece, and later Ireland and Portugal, to take bailouts, Zapatero implemented round of measures to tackle a huge public deficit and persuade financial markets that it has the budget under control.
He is expected to maintain unpopular economic policies whatever the outcome on Sunday.
"Unless the government wants to run the risk of another episode of financial distress and the debt spreads sky rocketing again, it will have to implement another austerity package before the next elections," Fernando Fernandez, an analyst at Madrid's IE business school, said.
In the past Spain has been relatively timid and accepting, even as its economy has continued to contract, and as the threat of the Cajas true debt exposure is finally put to the table (first discussed on Zero Hedge in July 2010). Those days are over.
Until now Spaniards had been remarkably patient with the economic crisis, as joblessness has been cushioned by traditionally strong family ties and by under-the-table work. But the patience seemed to run out this week.
"We need a change and I'm not surprised people have risen up, albeit belatedly," said one of the protesters, 38-year-old Robert, who works for an advertising production company.
Robert had brought along his three-month-old daughter "so she can start learning young," he said.
At the end of the day, the only thing that matters is what the bond vigilantes says. Should the socialists be swept and be replaced with a far more anti-austere party today, then one can be certain that the Spanish €3.5 billion auction of 3 Years on June 2 will be the worst of the lot, and that breakout in Spanish yields predicted by Goldman, is about to set off a firestorm of selling pushing Spain into the vigilante blender.
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The time of big "criminal empires" or obscenely, grotesquely overblown excuses for a "government" has passed.
The state is a construct which merely allows those sucking at it's teat to imagine that they have the right to tell everyone else what to do and when to do it, while ripping off the people mercilessly.
The "state" must go. All of them. Now.
If left as is much longer, it will be an unholy mess for a century.
A good day for Egyptian stocks this weekend:
http://noir.bloomberg.com/apps/news?pid=20601087&sid=aitCb4vvMHMA&pos=3
Looks like that index is now clearly off the lows. Will probably be the best performing sector for the rest of 2011.
http://noir.bloomberg.com/apps/quote?ticker=EGX30:IND
What? You really should get those meds adjusted.
The Eurozone 18-25 yr demographic are just as ignorant of reality as the US 18-25 year olds here. "Gimme' mine" is about the only thing that you will hear from these clowns. A wise economist, Thomas Sowell once said "reality is not optional". When the Socialist in your government are willing to piss-off massive entitlement class in a country like Spain you know that Socialism has run out of other people's money an there is no where else to run except to austerity. These simple economic facts manage to escape the unwashed masses, who simply clamor for the next economic sugar-daddy. There will be more temper tantrums from the youth of Europe over the next few years I hope we can learn something from it...
Agree totally.
18-25ers are the deluded bling generation. When you get paid off by policos, thats because 5 minutes earlier you were bent over the sofer, legs apart with your pants/knickers down. "when voting has lost its fun you fuck is over"
The proles will work it out one day.
Young people totally fucked everything up. I agree.
They are part of the problem because they are so naive. They bought all of Obama's bullshit about ending wars, transparency, fiscal responsibility etc. Now they are mostly unemployed and living with mommy and daddy again after graduating and being unable to find a job.
I remember studying in the library when doing my graduate work. A young black girl was telling her friends how great it would be if Obama became president. She wouldn't have to pay for classes or books anymore and it would save her lots of money. I just shook my head in dismay. These kids really thought that everything would be "free" after Obama was elected. I guess it is free now since their parents are supporting them again.
I'll go further than just 18-25 year olds. The entitlement class probably amounts to half the U.S. population - people who don't work but damn well expect someone to provide their expected lifestyle. I don't have figures, but the shit-for-nothing demographic is probably larger than at any time in our history.
OMG! Yeah, because it was the 18-25 year olds that voted Bush in who started these wars? Government providing education as opposed to creating an Economic catastrophe where the only way through your 20's is joining the service and going to war? The 18-25 class nowadays has a right to be ignorant as they watch their liberties dissolve like koolaid in water no thanks to 55+ classes' elected officials. GET A CLUE. The 18-25 year old aren't being represented. So what they voted one idiot of of 537!
I think you are so far from reality as those 18-25 yr olds in Europe. If your gov fired half or more of their employees and stopped all those SS payments, EI and all that myriad of different programs and subsidies, unaffordable wars, what would be left of your service economy? Probably those financial engineers would keep you alive, don't you think so?
Reductio ad absurdum works both ways- make everyone a goverment paper shuffler, goon, or check taker, start wars everywhere, borrow against debt based on magically created money, create a program for every ill that plagues man, and then we are in economic nirvana, right?
Shit... I meant to create an absurd counterexample of EUs strawman scenario, and ended up instead describing the current scenario as it is playing out. I suppose the *real* absurdity would be to limit the role government plays and its ability to spend beyond its means, deny its assault both its own citizens and other nations, and forbid it to hang the onus of paying for all its folly around the neck of the few people under its jurisdiction that actually do something useful. Now *that* would be taking things to a true extreme.
You're absolutly right, I just wanted to point how western system works. It was supported by third world countries and this situation is on it's last leg. There are still millions of people really productive but the ratio of them to the rest is going fast down, we used to the system where we produce almost nothing and want to have everything. Isn't it?
Taking all things to their extreme in order to make a point is a useful tool. Bulldozing every house in Detroit and breaking all the windows on Main Streets everywhere will be the acts that save the housing market and curb unemployment. Of course! Lower taxes work so well that the simple elimination of all taxes would be fantastic. Laffer curve, what's that? Tax stupidity and sloth. I'm sure some 5,000 page law governing the measurements of same can be passed through the Legislature if there is enough backing by the industry lobbyists who will profit the most. The U. S. system is the envy of the world.
I wonder who taught these 18-25 year olds? They didn't spring from the ground like Orks you know.
Well said, Hugh
Well said, Hugh
I guess none of this news about the PIIGS or Yemen will matter to Green Mountain Coffee, which has rocketed from $10 to $75 in a little over 2 years.
And then they sneak in this after the bell on Friday:
NEW YORK, May 20, 2011 (GlobeNewswire via COMTEX) -- Green Mountain Coffee Roasters, Inc. GMCR -0.48% will become a component of the NASDAQ-100 Index(R) NDX -0.77% , the NASDAQ-100 Equal Weighted Index NDXE -0.54% and the NASDAQ-100 Ex-Tech Sector Index NDXX -0.65% prior to market open on Friday, May 27, 2011. Green Mountain Coffee Roasters, Inc. will replace Millicom International Cellular S.A. MICC -1.71% .
Must be those Bollinger bands.
Watch Out! Feds Could Seize Your Private Retirement Savings Saturday, May 21, 2011 04:58 PM
By: Greg Brown
http://www.newsmax.com/PrintTemplate.aspx?nodeid=397212
If I understand correctly thats already happened in Ireland - and likely or even happening in other EU countries also. The West is bankrupt.
Barney Frank: U.S. government default likely By Jerry Kronenberg
Friday, May 20, 2011 http://www.bostonherald.com/business/general/view.bg?articleid=1339370&srvc=rss
Standard process: Threaten the end of the world to scare everyone into accepting more bailouts.
Frank is such a Wall st tool.
Disclosure: I think both parties suck, not singling out Dems.
http://www.dangerousminds.net/comments/rebellion_in_spain/
Somehow, the murky shadows of MSM will cast their mind numbingly explanation to keep the drooling sheeple at bay. Obey, your broke government will take care of you. Hehehehee.
double post.
Hello from Madrid,
I will probably pay a visit to the protesters later in the evening. They have just stated that will keep protests at least till next Sunday. By the way, participation rate in today's polls are slightly higher than 4 year ago.
Although I am pessimistic about the country and hope to emigrate to greener pastures in a not too distant future, all the hype about a cataclysm on Monday is overstated.
(1) If the opposition party wins, they are not anarchists, they are right wing politicians with very strong connections with businessmen and bankers
(2) It will take several months to have a detail picture of indebtedness of town halls and autonomous regions
(3) Public sector debt over GDP is not that big, the problem here in Spain is the debt assumed by families and corporations
Overall, do not expect a shock tomorrow morning.
I agree, Spain's real problem is the massive mortgage debt overhanging and the huge loans to property developers. The Banks and people went crazy and set a housing bubble on fire. The Spanish economy prospered in an easy money and real estate speculation economy. When a bubble like that bursts, the debts need to be repaid or defaulted. The economy has nothing, I mean NOTHING, to replace the housing bubble prosperity. All that is left are overpriced homes and condos and bad loans that property developers can't pay.
No one here thinks Spain combusts tomorrow. That is the point. Spain will begin to change tomorrow, and if you are a smart trader, it causes you to stir as was referenced in the headline.
When Spain combusts, I am very confident it won't be the only fire raging in the world.
actually Spain really does combust tomorrow.
Austerity is coming in spades to all the western world. Austerity is a fancy word for lowering the standards of living in the west. The east produces the manufactured goods now, and they work for peanuts. They are now moving headlong into services and high tech. They have huge growing populations and education is now available to most talanted kids. Right now they are an unstoppable force in the collapse of wages. The west can't compete on wages and the corporations know it. They seek the best labor at the cheapest price, and they have plenty of room to move more jobs.
Austerity is here to stay! One person tell me how Spain competes with China and India? No way. Spain is toast.
Austerity is not just about wages / lower wages. It is about creating a NET trade balance in your favour by resticting consumption while incentivising productivity.
China / Asia other goods will then HAVE to find other markets as either - a) No or reduced market to sell to (demand collapse) b) increased competition from domestic players c) No finance to secure a sale. The markets for them to focus on are THEIR OWN markets.
Another issue I think is margin compression. In the UK, the usual business model is a) Find something people want b) SOURCE it as cheap as possible (e.g. China) c) Market the FUCK out of it to make appear "Expensive". d) Pocket the wide difference. This model is now in collapse. New model is value for money, where price or reliability is king - this is being driven by the internet also. "Middle man" type business is history. One example is retail.
In the UK, Mothercare is going to close 110 uk stores, and focus over seas. I expect more of this to come. Retail is going to get smashed in the UK due to internet / big four supermarkets. This should lead to cheaper prices in the long run however as margins get wiped.
Smashing margins also makes off shoring more risky as there is less margin of error for negative economic events.
I have lived in Spain for the past 7.5 years. If I loose my job and should I decide to claim unemployment benefit then in my case I will
receive from the government €1’000/month for 2 years. (That’s $1416/month)
Many of the youth are quite happy to be out of work for long periods of time with a system like this, they work a couple of years and then have some time off, now they don’t like it because they might have to put down their coffee’s and get off their lazy arses and actually do something.
Dont forget the 'disability' approach where one can collect for decades while working on the side.
In Europe, when people (especially young people) kick out the socialists, it is usually to appoint anarchy-communists, who have an alarming tendency to transform rapidly into autocratic authoritarians.
One of the motivations for the Weimar money-printing was to avoid just such an austerity driven popular communist revolution in 1920s Germany.
Go figure.
Before this is over the people of Southern Europe will be praying for a Pinochet to free them from the clutches of a Chavez/Allende lookalike.
It was the fucking CIA who killed Allende.
Shitfuck American regimes meddling into sovereign nations' affairs.
As I said:
USA = Hitler's Germany
There is no difference between the U.S. attacking sovereign nations without cause and Nazi Germany doing it.
Absolutely no difference.
yes but... follow the money that elects the corrupt politicians, to the corporations, and more importantly, AIPAC. then look at which country is most benefitted by all the american aggression, manipulation, wars and meddling. pretty simple when you look at the big picture. the USA is host to a rather nasty parasite.
Phoney war, Twilight war, Sitzkrieg, the Bore War, dziwna wojna, drôle de guerre, the War on Terror....
Just curious, where do you live, Franken_Stein?
how come you never throw a few words towards the real masters of control. Maybe even highlight some names...i mean, you must have a lacky there with you willing to sit by a comp and crunch the facts and sift through the bs to get to a clear picture of whats happening....
ezra pound...facist i know...he knew who was calling the shots.
A brief austerity for Strauss Kahn as he moved from Rikers Island to a Lux NY Apt. Emblematic of all that is wrong with the Global Socialist sytem that is unravelling and about to go up in flames.
Actually at Rikers, the public pays for his stay. At a private apartement, he is footing the bill, estimated to be north of $200k a month just for security.
Further, for these self important, entitled, plutocrats, being able to see the world he had the POWER to control, but not being able to participate in that world.....not going to the restaurants, parties, watching the news flow but not being able to control the news flow, is actual death by a thousand little cuts for a guy like DSK.
I noticed you posting a hilarious image the other day - aside from your excellent comments, I can't be alone at having the giddy thought of more ZH vets show up in the contributor slots; every once in a while. If it's that you're all busy behind the scenes then, Tally-ho!
Many will understand the planned directive shortly. This crackpot has deep pockets and the planners will continue to fund it.
The pyramids were built under this programme. This is not a new idea rather than, repeating an old concept.. expecting a different result.
http://www.thevenusproject.com/
FYI
hold on, hold on....
how did you say the pyramids were built...unless that is a metaphor for the guiding hand of empire?
hats your beef with the venus project....jaques is little wise man...not to be trusted or put into power, but good to listen to and has some solid opinions on things....
Small point of order: the pyramids weren't built by slave labour, as is commonly mis-believed. They were actually built by agrarian / skilled labour during flood seasons as a means to make employment up and as huge vanity projects. The Greeks put forward the slave myth, largely due to that old 'our culture is still better than yours, and we build our monuments via citizen power (Acropolis)'. Both civilisations, of course, owned slaves.
So, you might want to criticise the Pharaohs for being socialists or the usual line of 'when an Empire starts building monuments, it is on the way down', but the people building them were the equivalent to Rok or Dumfries.
Oh.. wait...
USA's types are a simple people believing in Church on Sunday, vote on Tuesday and drill, dig and otherwise rape the earth for oil every other day of the year. The irony of course is "that they succeeded" not that they "succeeded at all." Of all the peacenik types in world history I would have us Americans as the last ones indeed as well. right up there with "Jewish war-monger." still--the facts speak for themselves. though far from entertaining the events that trasnpire over the next few days, weeks and now more than likely months and years "should be very interesting." far from enlightening however, don't you all agree? or is "too much war still never enough?"
As the movie 127 hrs showed, when you are stuck between a rock and a hard place, you might as well cut your arm off.
I don't know what classifies as the "arm" here, but best get to sawing.
Almost all the western democracy's have thrown out governments that don't have the courage to say to the bankers we won't pay back the full amount. even when they elect a government that ran on that platfrom the government changes it's mind. It should give people are real lesson that we in fact don't have democracy except in places like finleand and iceland where the voters can say enough is enough and the government responds.
these economies will never recover until teh debt burden is reduced, but the bankers want to make sure they can buy the entire country first. s is happening in greece. the state adopts the private debt of the banks, then the state sells of assets to the private banks they bailed out. The fact that there isn't armed revolution is these countries is astounding. the only people for whom this works is the bankers. To say this isn't some kind of cabal is just insane.
Bail these fuckers out so they then can bleed you dry for doing it.
"The Hegemony of World Finance should reign supreme over everyone, everywhere, as one whole supernational control mechanism." - Montagu Norman, governor of the Bank of England from 1920-1944.
To achieve this goal, super-rich bankers are aiding and abetting procedures to convert all governments to world socialism, which they will control. Using debt, violence, and revolution to politically force themselves into control of world governance, they are creating a world financial crisis in a last bold step as governments surrender their sovereignty under a worldwide debt-induced emergency.
Dr. Carroll Quigley, professor of history at the Foreign Service School of Georgetown University, identified this power group as the “international bankers,” men who are quite “different from ordinary bankers in distinctive ways: they were cosmopolitan and international; they were close to governments and were particularly concerned with questions of government debts...; they were almost equally devoted to secrecy and the secret use of financial influence in political life. These bankers came to be called ‘international bankers’; and, more particularly, were known as ‘merchant bankers’ in England, ‘private bankers’ in France, and ‘investment bankers’ in the United States.”
The proposed global government at Bretton Woods I was designed upon the principles of socialism with two weapons of control. One was a monetary weapon -- the IMF and its sister organization, the World Bank, established by Fabian Socialist John Maynard Keynes and Harry Dexter White, then Assistant Secretary of the US Treasury. The other was a world police force. White, a member of a Communist espionage ring in Washington, became the first Executive Director for the United States at the IMF
Of the two weapons, monetary control is the most important. A world central bank, which would be represented as the IMF/World Bank, has the ability to issue a common money which all nations are urged to accept – under the slogans of international trade and growth.
The point is socialism does not work, nor was it intended to work. If you keep trying it you just keeping failing. Taking from the producers to give to the non-producers leads to unemployment, scarcity, imbalances, and lack of incentive; people will not invent, work, form companies, produce. The result is moral and financial crisis. If the trend continues, there is anarchy, giving rise to the “hope” in Quigley’s “Tragedy and Hope” – the man-made millennium of a collectivist one-world society when the power network achieves its goal of ruling the world.
A world where men are corralled, and ruled with a whip.
You're linking too much with the bretton woods I
There were some very prudent things with Bretton Woods I
1. Fixed exchange rates
2. Gold standard
Just remember this. FDR hated JMK. FDR was no keynesian. Keynesian glommed onto FDR, to make his theory more sound.
Now we have his theory without FDR's plans (which really did the trick).
Attack the IMF, not Fixed Exchange (generationally set or thereabouts) rates and gold standard.
Don't just label IMF = Bretton Woods, because that is so not the case.
While Bretton Woods still describes a monetary system with the federal reserve, it is the best way to approach monetarism. That said, American (Hamiltonian) Credit System with the Bretton Woods tenants of Fixed Exchange rates and gold standard is much better.
The way to look at Bretton Woods is more of a multi room conference. You had what FDR was trying to do in the big boys room. Then you had quack job JMK trying to build consensus on what HE in his ivory tower wisdom wanted to do....i.e. Bancor.
JMK was doing his own thing (well bankster thing), and people really need to understand that. JMK was upstaging FDR (attempting to). Bancor as a reserve currency which is compeltely opposite of what FDR wanted, somehow makes Bretton Woods I in whole wrong? See my point.
Glass-Steagall
As long as a central bank can oversee and usurp all financial power it matters little who fills the political slots. I do agree about Glass-Steagall. Look at FDR's inaugural address in 1933:
Pain is the only way for some people to learn. Although we would do well to chop at the roots of our educational system and remove the Dept. of No Child Left Behind.
Also, Hamilton was a foul being and monarchist (in no particular order) with no love for natural rights.
the world you describe is feudalism...more so than socialism.
In feudalism, in exchange for their services and loyalty, the lord provided protection for the serfs. If Blankfein is protecting me, I certainly have missed his services.
The term the bankers use to describe their hope to eventually attain total global control is socialism. In any regard, whatever it is to be called - feudalism or socialism or communism or globalism - the bankers, according to Quigley, intend to hold the land and all the resources of the world and we the peasants will provide the service and the labor.
Or, hey, maybe it’s going to be called “global democracy.”
In the words of Ron Paul: "The financial New World Order is the creation of an elite system of interconnected governments and bureaucrats which conspire to tax, regulate, and inflate the wealth held by the middle class peoples of countries around the world, in the name of global democracy."
Whatever the changing nomenclature of the Communist revolutions and Socialist legislation that the master planners have been financing in order to steal from the people, our job is simple: knuckle down to the ruthless bosses behind the scenes, as in Greece, Ireland, Iceland,Latvia, Spain, Portugal, Belgium...and the United States of America...
Spain is another country that could implement Glass-Steagall. It definitely applies.
Newsflash, business can run just fine, without banks. (no not any banks, todays banks...which can be replaced in a weekend if needed)
We already have the branches, and the banks are bankrupt. Just need to clean the house and put up new signs (and even the signs part you don't really have to do before opening)
You can hire the same tellers (they aren't the ones making the big derivatives bets, etc)
Zeroing what is fraud, is much easier than one thinks.
...and like here in the U.S., Spain can do it too.
We CHOOSE to be in this scenario, because we forget how easy the correct one is. The world needs to quit thinking a Glass-Steagall reorganization, and the bankster destruction that would ensue is like a 14 year old calling up his crush. It isn't that hard. That self limiting behavior? It's all in your head.
Glass-Steagall
The “way to look at Bretton Woods,” IMHO, is as an on-going conspiracy of the bankers.
As for the Great Depression, Keynesianism ruled the day as the economic policy under FDR with the twin options of deficit spending (sometimes euphemistically called government ‘investment’) and artificially low interest rates to “free up more credit.”
How good was the remedy? Economist Henry Hazlitt documented the results with this conclusion:
Deficit Spending: “The central and decisive fact is that heavy deficits were accompanied by mass unemployment…
Artificially Low Interest Rates (ZIRP): “In sum, over this period of a dozen years low interest rates did NOT eliminate unemployment. On the contrary, unemployment actually INCREASED as interest rates went down. In the seven-year period from 1934 to 1940, when the cheap money policy was pushed to an average infra-low rate below 1 percent (.77 of 1 per cent) an average of more than 17 in every 100 persons in the labor force were unemployed.”
Regarding Bretton Woods I and the use of gold as the basis of currency exchange: “The International Monetary Fund was to promote monetary cooperation between nations by maintaining fixed exchange rates between their currencies. But the method by which these goals were to be achieved was less admirable. It was to terminate the use of gold as the basis of international currency exchange and replace it with a politically manipulated paper standard. In other words, it was to allow governments to escape the discipline of gold so they could create money out of nothing without paying the penalty of having their currencies drop in value on world markets.” -- Griffin, G. Edward, The Creature from Jekyll Island, A Second Look at the Federal Reserve. America Media, 2009 edition, p. 86.
“One of the routine operations at the IMF is to exchange worthless currencies for dollars so the weaker countries can pay their international bills. This is supposed to cover temporary ‘cash-flow’ problems. It is a kind of international FDIC which rushes money to a country that has gone bankrupt so it can avoid devaluing its currency...
“Although escape from the gold-exchange standard was the long-range goal of the IMF, the only way to convince nations to participate at the outset was to use gold itself as a backing for its own money supply – at least as a temporary expedient.” --Griffin, op. cit
Parond my frankness, but I think this conspiracy of bankers business is a crock of shit. This is not to excuse some of their more notorious behavior, but instead to point out the reckless behavior of others.
Nobody complains when the loans flow easy. But when it is tough to pay them off, all of a sudden there is a massive conspiracy sell.
Banks make loans. If one can't pay, then they take collateral. To stop them form kicking masses of voters out of their homes, they were given a bailout. This is for social stability, for vote-getting, whatever, but banks are not entirely to blame. Nobody put a gun to someone's head to make them take out a loan.
Pay your loans off. If you can't, default should lead people to accept the bitter medicine and move forward wiser for it.
This isn't to justify all the bailouts, either. I think they were too extreme. But it is wrong to think that bank recapitalization benefits only banks. It kept people in their homes, kept loans to businesses flowing, kept people in jobs.
I'm open to being convinced to other sides. If I'm right, then let's agree to end the conspiracy bullshit and deal with the more uncomfortable facts of the case.
We’re really not talking about bank loans as such; we’re talking about banks controlling the process whereby they write the regulations, they censor any oversight, and they use the US Treasury as their ATM. Essentially, they are using the process to build up huge stores of capital that wasn’t theirs, risking it in the market place and when they lose, overseeing through the Congress and White House the replacement of their losses by the taxpayers. All the taxpayers have to do in this one-way contract is provide the money.
It’s an oversimplification to change the subject and talk about bank loans; that’s not the point. We’re talking about a conspiracy of bankers who are becoming filthy rich over a process that involves a great deal more than loaning money and collecting collateral. It involves issuance and control of the value of the money supply; it involves ownership of markets to pick winners and losers; it involves power to disregard and/or make the law.
Basically, large investment banks are using the US Treasury, taxpayers’ receipts, the entire US housing industry, savers’ deposits, rigged boom-and-bust markets and the US government and other resources as a base for their gambling in and insurance against high risk adventures. They set the interest rate on the dollars that they handle, and if you think that “they” are the representatives of Congress, you have the equation backward.
How can you deny it’s not a conspiracy where they actually set the rates themselves – blocking all the mechanisms of supply and demand? If ever there was a conspiracy in the history of the world, this is it.
"Little wonder that the elite hated the middle class which challenged them in the name of God-given liberty. And little wonder that this hatred grew deeper as the middle class became stronger and imposed restrictions through which all the people, including the most humble, had the right to rule their own lives and keep the greater part of what they earned for themselves. Clearly, if the elite were to rule again, the middle class had to be destroyed so despotism and the system of tribute could be returned, and grandeur and honor and immense riches of the elite--assuring their monopoly rule of all the world." - Taylor Caldwell quoted in The New American, May 1, 1995.
You see it clearly as it is and as it was planned.
Thanks.
I agree that banks write the regs and corrupt the regulators. In all honesty, don't want some clueless legislator writing laws about this business at all. We shouldn't be relying on regs. We should rely on market discipline.
I want to end the bailouts as much as you... maybe even more than you. In all the roles I've played, I and no firm I worked in ever got a bailout. I have seen one in three get laid off in 24 hours, then one in four of the remaining get laid off the next day. I'm sure you don't care, but know that there is more to the story than the historical image of fat-cat bankers and smokey back-room deals, although Lehman/BarCap shows that there are plenty of those kinds of deals. I can speak to this, if you wish at some point.
As to banks using treasuries as an ATM. Who benefits? Banks yes, but the political decsion is to keep banks from exercizing collateral (kicking people out, keeping businesses running) in my view. There is no store of capital built up. Banks are woefully undercapitalized and this will remain for years because a huge maount of loans don't perform. This takes me back to the main point. People have to choose: let banks exercise collateral and follow their own best interest, or recapitalize them and keep the shops running and people in their homes.
Why do people blame a bank for getting a handout, but everyone is silent about grandma smoking for 40 years and then hand me a $100,000 hospital bill? Why the silence about squatters? Why the silence about the massive pump job that inflated everyone's 401k? why are corporatios allowed to overshore billions and never pay taxes on it? It is all a part of the same sick game that hopefully will come to end in a peaceful manageable way.
I hope you can see form the exmaples above that all the abuse of power stuff is part of a deeper collective problem. The Fed is the issue, and the Fed is political creature. It's leaders are appointed by the popele we elect, and that they aren't is ultimately a problem of voter apathy or enough of them being OK with getting their own special handout.
Rest assured. One day all this will take care of itself and everyone will be a lot poorer either way it goes. You may even wish for more bank bailouts if it gets bad enough.
Banks don't set the rates themselves. They offer a rate and a consumer is more than free to walk away. If you are talking about policy rates, then this is a part of the political system the majority in the United States accepts... until perhaps some remarkable day when people wake up.
Be honest: the taxpayers don't contribute much here. They will vote out anyone who dares to raises taxes to level even near historical norms. Thank the Japanese and Chinese that foot our t-bills. They foot the bill that will never be paid off. To deny this is self-righteous denial in my view. We need more honesty.
There are few people in this world that hate something as ambiguous as the "middle class", and typically that kind of hate is found only in the dregs of society. There is no such thing as a scheming elite that hates the middle class. No one is set on turning the world into zombie-slaves. Instead you have poeple that don't give a crap about you or your welfare. They act in their own self-interest and happen to have a love of money/power/etc.
I'm not saying any of this to be nasty or get all figh-club on you. I don't know who you are or anyone else on here, and I don't hate you. I don't even hate the dumbfuck on here that tried to publicize who I was.
+1
Right on JR.
What is Mishka?
i guess a joker economist ...you know the type....
Economic cocktail? I don't know its constituents nor if its shaken or stirred.
This is what I am talking about for the UK:
http://www.economist.com/blogs/freeexchange/2010/07/inflation_0
if anyone should be subject to austerity it should be the globalists and the bankster gangsters.
Sounds like Spain is the next Linkedin...
BOOYAA ....let the games beginn...
Look this movement is destined to fail. They are not offering a solution. Do any of them read Zero Hedge?...
hi. any chance you aren't married?
Some of the nonsense written in the comments prompted me to write some simple issues down: Not new information, if that is what you're looking for.
The spanish socialists found themselves trapped in a dilemma: With an imploding real estate bubble (that has been building up for two decades) and migrant workers (N-African mostly) now instead of spaniards, doing the menial work in giant farms, they had to make a descision and decided to play along the ECB lines and tried to shore up the nation's financial industry, mainly the smaller Cajas and the bigger banks.
There's been a great deal of disinformation floating around, and conservatives pointing the finger at Europe as a whole, while Spain recieved quite a lot of subsedies. That the socialists lost this election is nothing but the growing disparity on the whole continent, where "green" parties, and socialists have supported bailouts (and with UNWITTINGLY accepted austerity measures) and more rightwing groups have been questioning the role of europe, the ECB in particular. Spain used their subsedies well, created first class infrastructure, education, and didn't waste it like Hungary did (to take one example).
Bottom line is however that they all are politicians, "socialist" or "conservative" are just words when it comes to dealing with banks, and that the "socialists" and many civillians don't understand this is an insolvency crisis, not a liquidity one, and they certainly have not looked at the USA enough, or even the rest of europe, to see simularities, in the failure of picking the right strategy of the 2008 crash: Those that wished to preserve the function of State to provide necessary help to part of their citizens, or handouts (depends on the POV), and supported bailouts, now find themselves in a position that requires imposing "austerity measures".
The consequences of the mistake not to let the failed banks implode in 2008 are simply tragic errors in strategy. NO the cause of the crisis is NOT overspending by the socialist government. Again they INHERITED the problems of a very conservative government before them (for those of you suffering from amnesia) THE REASON for the crisis now is that there is a banking system that persuaded the governments to guarantee their overleveraged positions, and that there has been, and still is, corruption, and a siphoning off of public funds into the corporate sector.
The spanish socialist government should've taken the matter up like Iceland's, and this goes for all here, who find themselves right back where they were, at the end of 2007. They made the wrong friends after the real estate bubble (construction) collapsed, perhaps they felt they didn't have much of a choice.
A growing number of people (the protestors) DO understand. I'm positive they are aware the WHOLE system failed, not just the socialist party. In the northern countries these protests are explained as "dissent with austerity measures", as many here STILL don't grasp the real issue (of insolvency). Thus the bankers have their way, and a rift appears right in the middle of europe. Divide and conquer..
https://lh6.googleusercontent.com/_rnN3mbqgIJ0/TdgO9NG1MSI/AAAAAAAAFNY/Z...
+100,000. "...for those of you suffering from amnesia"
Seriously, it's much easier to blame this mess on the crumbs thrown at the poor instead of the looting and pillaging of the Plutocrats and their puppet politicians.
It's not easier, just more corruption in the ranks of the media whose script writers are paid to distort the record, blame-shifting and propagandizing.
If there is a sentient human bean that does not know that the Banks bear ALL the responsibility for this global disaster then they have been in a coma.
Socialists can only blame others. When they gained power did the blame the previous government? Did they tell people that their plan was better?
Or have they now as they always do, blame the other group?
Our boy Barry is still blaming Bush even though he and his party had control of at least 2 of the 3 branches before 2007.
Socialist never except responsibility because socialism is about taking from others without any guilt.
Funny how both sides of this argument are right and wrong. I was reading an economics paper the other day written by a non-economist (don't get me started about non science people in charge of the ultimate science experiment ECONOMICS) using the first two laws of thermodynamics, he rightly I think incorporates entropy in his version. The main problem with any economist's study, they use static historical numbers to analyze change. Economics is certainly as chaotic as any particle experiment or nuclear chemical reaction. When at a dinner party with an economist from Uof Chi. I asked about the abnormal rate of change in un-employment, his response was EMPLOYMENT IS A TRAILING INDICATOR! I said that can not be! He said, I should take a econ 101 class then I would know that employment is a trailing indicator. To me, employment is so far ahead of any other indicator ECONOCLUELESS think it's a trailing indicator ha! Chicken and the egg I guess. I could never get the first derivative thinking of enconoclueless. We really need a new system, never in history have we experienced (we came close at the turn with steam engines) this amplification of efficiency and power in the hands of billions of people. When George Jetson loses his job of pushing the Spacely cog production manufacturing line button to Skynet what lies ahead for Geo. other than years of unemployment and lowered standard of living? Can Geo. survive trying to earn less every year while sharing commodity production limits increasing costs at every level of spending? How long can Geo. live on his savings from pushing the button, hoping another button job comes along? Can Geo. survive long enough to learn to write software to push bigger buttons? Should Geo. give up and move to the button maker country and compete for that pennies a day job to make buttons? Are other Geo.'s hoping Geo. quits and falls homeless and uncounted so they can feel good about saving the button pushing job they have? I always felt sorry for Geo. as a kid, so I wanted to work on energy that made that flying car work ha! Turns out it was really just a button job too ha! Without cheap energy this unproductive system can not work on a global scale. Maybe Rosie will be the only one left working?
YEs, even neo-colonialism collapses eventually. That's what Western powers have enjoyed since ww2. And for a brief shining moment there was almost a true Pax Americana. Almost.
But the average Joe is the last to benefit from the spoils of colonialism of any kind, and the first to pay for the follies. As usual. If you need any clarification, read the famous works of Charles Dickens: at the height of England's imperial power and the peak of it's domestic industrial might, domestic poverty and misery was widespread and full of deep despair. Dickens dedicated his career and works to shedding light on the ugly underside of Imperial glory and elite wealth existing side by side with extreme poverty in the seat of power. And we know the same went for all 'glorious' empires from Egypt to Rome, from Spain to the Netherlands and France. Why should this time be different for the USA?
Mirrors?
Exactly.
And there are no political solutions for cultural disease.
I agree with you. This time is not different even though both sides think it is. If only we could have more of the same! When the Shrub decided more debt was the cure for over indebtedness and they said it out loud in public as though it was genius I knew the fix was so far in I could taste it! When O'Bummer's hopey changey debt solution was more debt I vomited! There is no solution with pain, it's only about whether the rich will yield in time to save the country or do they run taking their chance in countries they can buy for the moment? Many ZH'ers fail to see the bottom 60% can and will only take so much pain and suffering then the guillotines come out. Marie was only right within the palace.
As in this country, Spain approaches the cliff the only choice is how fast they to go over. To my friends in Spain, vote to run over the edge! End the madness of the richest 1% of the world stealing from you and your children! Vote to jump my friends! Begin the new experiment of a modern sustainable economy!
Politicians are speechless...young Spaniards don't want to listen to them anymore. Neither left nor right give them hope of an outlook of a decent life. In North Africa the demonstrators could pretend that democracy is missing... in Spain this argument isn't valid... What's next my friends?
No greater question I think can be asked. What is next? Are we seeing our own future here in the U.S.? I think so, friends children and my own have finished their degrees are working for less or are un-employed and I hear fear and angry voices like I have never heard before. Leaving school with 40/80 K of debt first payment due within six months of graduation. You can see it coming if you take the time to listen.
Being always a bit paranoid and insecure I could never understand why someone would get a high priced liberal arts degree and just assume someone else would give them money for their "expertise."
Expertise in what?
Governments and central banks lost the moral authority to even talk about austerity when they bailed out the banks, bank holding companies, hedge funds, insurers, automakers - and nearly any entity above the level of the household and the individual.
So very very TRUE! You would think that one fact a lone would unite us all working people, union, non-union, elderly, disabled, veterans even tea-baggers. How can we be so divided, when that one dirty deed of bankers everywhere broke faith and trust with all of us. The one time in history that is absolutely necessary to be united and we let them divide and conquer us all. Hate is spewed over that worker makes a nickel more than I do I hate them. When it should be, I pay more taxes than Exxon, Gm or the ten billion dollars in Goldman Sucks bonuses at a time when we bailed them out of bankruptcy. Why do we workers hate each other?
By calling names you lose and credibility.
Unions and the Tea Party are incompatible.
Tea bagging is a homosexual sex act.
Unions support the gay/lesbian/transgender platform.
Unions tea bag.
Not the Tea Party.
I suspect your form of "unity" is just another version of socialism. Yeah I hate the banker welfare too, but I dont agree to big government high tax solutions.
Get ready for the shit storm. My advice: step away from the fan.
socialism dies when socialists run out of other people's money.
It looks like it just commits suicide!
Bloomberg
May 17, 2011
"Spain's regional and local administrations have “hidden” debt, not included in the official accounts, amounting to about 26.4 billion euros ($37 billion), according to research by Freemarket Corporate Intelligence, a consulting firm, the Financial Times reported."
http://www.bloomberg.com/news/2011-05-17/spain-may-have-billions-euros-of-hidden-public-debt-ft-says.html
These massive hidden debts in Spain's regional governments are supposed to be revealed now that Zapo's socialists just got their asses kicked.
Got puts? :o)
Live Cam Madrid of the (illegal) tent encampment on the Plaza Puerta del Sol.
http://www.ustream.tv/channel/motionlook
Give us a break! Socialism is not an answer, much less the answer.
The answer is liberty and individualism. Let people sink or swim based upon their own behavior. End ALL taxation, and leave all programs as "fully voluntary and by subscription".
The current system wherein politicians get votes by offering freebees, which get paid for by stealing from productive people who do not want, and often cannot get the freebees MUST END.
The producers of this world have had it. NO MORE. We will not pay to keep the present SCAM running. You sucked out our blood and enthusiasm. The answer is to eliminate governments, eliminate central banks and fiat, fake, fraud, fiction, fantasy, fractional-reserve debt-currency. Eliminate everything, but let people voluntarily sign up and pay for whatever "services" they wish.