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Summary Of The Biggest Bail Out Ever: Even Keynes Is Spinning In His Grave

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Mon, 05/10/2010 - 04:38 | 340683 Miles Kendig
Miles Kendig's picture

There will need to be another trillion or two handed out over the next month.  As folks dig deeper into these proposals I am sure we will find many of the common threads of action we have seen since February.  It is full blown Loony Tunes and That's All Folks.  The wild fire has been freshened with ample fuel.  Fools.

Mon, 05/10/2010 - 06:45 | 340801 Adam Neira
Adam Neira's picture

This is all leading to another paradigm...

Mon, 05/10/2010 - 07:00 | 340818 nuinut
nuinut's picture

Fingers crossed that will be a good thing...

Mon, 05/10/2010 - 10:55 | 341236 erik
erik's picture

everything depends on the Euro right now.  it opened high and has steadily sold off.  no surprise the stock market weakened as a result.  right now the Euro is in a bottoming process on the daily chart.

the Euro has given back HALF of its gains today.  that is a warning sign.

Mon, 05/10/2010 - 11:09 | 341259 Pamela Anderson
Pamela Anderson's picture

AMANDA DRURY!!!!!!!!! Yes, I don't need Viagra today!!!!!!!!

Her breast in white!!!!!!!!! Just superb!!!!  Best of CNBC by far

Mon, 05/10/2010 - 20:38 | 342489 Miles Kendig
Miles Kendig's picture

GO Dawgs!  Can still see yaz from North Queen Anne


Mon, 05/10/2010 - 12:01 | 341373 B9K9
B9K9's picture

Life's but a walking shadow, a poor player

That struts and frets his hour upon the stage

And then is heard no more: it is a tale

Told by an idiot, full of sound and fury,

Signifying nothing.

Keynes wasn't kidding when he stated that we're all dead in the long-term. Clearly, central bankers live & breathe this philosophy. Who cares if the system crashes in 1 or two years? Today we live, so eat, drink & be merry.

I'm really curious as to why anyone is surprised - what's up with all the vitriol & anger? The PTB are essentially admitting what many have known for some time now: the economy died back in 2007-2008. There weren't any green shoots - that was last year's propaganda message to keep the illusion going.

But it has obviously grown stale. This year's theme will be akin to the tradition of breaking open the liquor cabinet when a ship is doomed: all discipline is abandoned as the crew gets blindingly drunk. So, party on mates.

Perhaps some may survive and wash up on shore. They might eve get a chance to create a new society. Nah, it'll just devolve to the same one we have today.

Mon, 05/10/2010 - 13:30 | 341590 tj3
tj3's picture

no sh*t, what's changed...some times I feel that this blog has devolved into CNBC's evil twin...shessh...and you right, live it up for today, fore tomorrow will come...

Mon, 05/10/2010 - 21:52 | 341812 Miles Kendig
Miles Kendig's picture

Or that it will at least work better than that shave would have in High Plains Drifter. 



Mon, 05/10/2010 - 07:03 | 340823 tip e. canoe
tip e. canoe's picture

exactly...overloading the left-brain until it cracks open and floods into the right via the pineal gland.

we are all autistic now.

Mon, 05/10/2010 - 09:53 | 341080 Ophiuchus
Ophiuchus's picture

Perhaps the Catholics were on to somthun when they created the Court of the Pinecone. http://indianinthemachine.files.wordpress.com/2009/10/pineconecourt.jpg

...then there was Heinrich Himmler's spear of destiny. http://www.williamhenry.net/spear.html

Mon, 05/10/2010 - 10:16 | 341136 Turd Ferguson
Turd Ferguson's picture

Ich bin ein Berliner.

Spoken June 26, 1963. Then, just a metaphor.

Today, May 10, 2010, it has become truth. 

Mon, 05/10/2010 - 14:07 | 341683 ZerOhead
ZerOhead's picture

You're a jelly donut?

(It's the 'ein' that gave you away... :)

Mon, 05/10/2010 - 21:55 | 342617 Miles Kendig
Miles Kendig's picture

Perhaps this may be just a reflection that the matters at hand are rapidly becoming everyone's donut...  (Spans of control, influence and all that)

Mon, 05/10/2010 - 19:46 | 342388 tip e. canoe
tip e. canoe's picture

definitely, but both were obsessed with looking outside in instead of inside out.

speaking of pinecones, guess what grows under them?


Mon, 05/10/2010 - 10:34 | 341190 bugs_
bugs_'s picture

Brother can you spare a pair-o-dimes?

Mon, 05/10/2010 - 15:16 | 341905 Miles Kendig
Miles Kendig's picture

just don't drop one.. 

Mon, 05/10/2010 - 11:12 | 341263 Sespian
Sespian's picture

Could it be, that the grass is always green?


Mon, 05/10/2010 - 12:59 | 341497 scepticus
scepticus's picture

"This is all leading to another paradigm..."

like a pure credit economy (ala knut wicksell, circa 1898)

Mon, 05/10/2010 - 15:15 | 341902 Miles Kendig
Miles Kendig's picture

Most assuredly.

Mon, 05/10/2010 - 17:11 | 342105 Reflexivity
Reflexivity's picture

Most assuredly.

This statement reminds me of (Plato's) Republic:


...Most assuredly.

And is not the love of learning the love of wisdom, which is philosophy?

They are the same, he replied.
And may we not say confidently of man also, that he who is likely to be gentle to his friends and acquaintances, must by nature be a lover of wisdom and knowledge?

That we may safely affirm.
Then he who is to be a really good and noble guardian of the State will require to unite in himself philosophy and spirit and swiftness and strength?


Mon, 05/10/2010 - 21:57 | 342242 Miles Kendig
Miles Kendig's picture

... within the warm embrace of assurance that is born from living rather than dying.  In total, what it means to represent the whole by example.

Mon, 05/10/2010 - 08:36 | 340903 john_connor
john_connor's picture

All cards are basically out now, pending details of this lunacy of course. Riots should spread to Spain and  Italy within 3 months, with war to break out in Europe in 6-12 months as the ECB attempts to legislate various countries with competing interests.

BTW, call your senators and representatives and start complaining about the Fed's swap lines.

Mon, 05/10/2010 - 11:27 | 341291 Assetman
Assetman's picture

I really agree on the last point.

If indeed, these swap lines represent "loans" to other central banks, why in God's creation are we accepting loans in Euros?  Are we so awfully sure we will even be close to being paid back on a currency adjusted basis?

The Fed's involvement is akin to plugging a dam leak with your finger, while 10,000 more leaks are sprouting out.  Not only will it NOT change the course of events, it may eventually do more harm than good.

Mon, 05/10/2010 - 11:42 | 341324 Ripped Chunk
Ripped Chunk's picture

And when Ben tesifies again on "The Hill" they will ask the same question: "What banks was this additional trillion lent to?"

Ben: " I don't really know"


Mon, 05/10/2010 - 12:17 | 341424 Popo
Popo's picture

For years I've been unclear how wars could actually get started... Now it seems so utterly clear: Exactly like this.

First economies are utterly destroyed for the foreseeable future.

Next social unrest topples governments.

And then the great leader appears to unifies his people by rallying them around a foreign enemy.

Step 1: Check

Step 2: In progress.

Step 3: 2 years.

Mon, 05/10/2010 - 18:20 | 342207 moneymutt
moneymutt's picture

good point, no one seems to want to talk about the European folks reaction to this, they tend to vote in the street more than US people...the biggest bailout ever only works if the people roll over for it...will they? right now I don't think they are that desperate, so maybe it will be quiet, wish I knew how angry Europeans are right now...

Mon, 05/10/2010 - 10:26 | 341165 DaveyJones
DaveyJones's picture

a trillion here, a trillion there, pretty soon we're talkin real money

Mon, 05/10/2010 - 10:39 | 341202 FEDbuster
FEDbuster's picture

a trillion here, a trillion there, pretty soon we're talkin worthless money.

Gold bitches (food and ammo,too).

Mon, 05/10/2010 - 13:26 | 341578 Miles Kendig
Miles Kendig's picture

That's real?  hmmmm

Mon, 05/10/2010 - 14:02 | 341667 DaveyJones
DaveyJones's picture

sarcasm is one of the most elusive financial indicators.     

Mon, 05/10/2010 - 14:57 | 341856 Miles Kendig
Miles Kendig's picture

Ya, and the "s" on my chest is to indicate super slowness.

Mon, 05/10/2010 - 12:57 | 341493 BlackBeard
BlackBeard's picture

We've just witnessed history:  One of the largest nominal amounts of money tossed into a burning fire.  Bernanke and Geithner have penis envy right about now.

Mon, 05/10/2010 - 04:42 | 340685 gridlock
gridlock's picture

What do you want them to do, dismantle the euro and everybody starts owning debt in fluctuating currencies - that would be an even bigger mess! Honestly I thought Trichet will flood the market with liquidity last week and that naive belief in EU speed under pressure cost a fortune to my calls in financials, which should recover nicely now.

OOne question still remains to be answered though - can you pay debt with more debt, or will the system be dismantled gradually over time - looking forward to 2030 :-)

Mon, 05/10/2010 - 05:20 | 340713 chumbawamba
chumbawamba's picture

2030?  You'll be lucky if we make it to 2013 at this point.

I am Chumbawamba.

Mon, 05/10/2010 - 06:23 | 340763 Mentaliusanything
Mentaliusanything's picture

Fuck me old chum, June -July 2011 is all the legs this lame ducks got. Wake up the World is full of people who believe an earthquake is a remote possibility. This is the most inane idea I have had the pleasure (or pain) of hearing. Tell me should I save my ass soiled toilet paper to sell for a profit or should I flush it. Not a snow balls chance in Hell of this thing working. Its the Debt (now increased) that needs to be addressed.

Sorry but this is a butt fuck (now) for the whole World.


Yes I'm just cranky at the short term stupid nature of people who should lead instead of being pushed to slaughter. No offence meant - I just want to see reality and truth make a decision  

Mon, 05/10/2010 - 13:21 | 341563 Observer
Observer's picture

I think you could have made your point without being so potty mouthed. Foul language can devalue the point we try to make

Mon, 05/10/2010 - 14:28 | 341734 MsCreant
MsCreant's picture

Deleted hysterical rant at people who are too sensitive to strong language.

Mon, 05/10/2010 - 15:08 | 341873 Miles Kendig
Miles Kendig's picture

MsCreant, THIS IS A FIRST.  The deployment of potty mouthed in a non sarcastic mode of delivery at ZH!  Even the gold standard of propriety, MN Nice never went here!  Wow Chumba, I stand in reverence and awe of your continuing capabilities to capture the very best in us all.

Mon, 05/10/2010 - 15:10 | 341883 Miles Kendig
Miles Kendig's picture

You have been here for 31 weeks and you still cling to the propriety crap in the use of language here at ZH?  I would hope you would have garnered a bit more about all of this given the time you have studied it.  Just so ya know, Observer, I am just another fucking observer (shamelessly plagiarized from the movie, Blue Thunder).  So, it's JAFO to you. 

Be Well

I wouldn't go back now for any amount of money (or anything else) - Miles Kendig

Mon, 05/10/2010 - 10:29 | 341171 DaveyJones
DaveyJones's picture


Mon, 05/10/2010 - 13:43 | 341624 tj3
tj3's picture

"What do you want them to do, dismantle the euro and everybody starts owning debt in fluctuating currencies - that would be an even bigger mess!"


Yes and no. The bigger mess is the one we (humans) keep creating. Start by kicking out the countries that should not have been in the Euro Zone in the first place...like say...Greece?

Mon, 05/10/2010 - 04:44 | 340686 JonTurk
JonTurk's picture

I wonder WTF will happen when UST 10 yr break out %4

Mon, 05/10/2010 - 04:45 | 340687 AUD
AUD's picture

So the Fed, ECB etc are buying unfinished real estate & empty matchboxes? (Melchior Palyi 1937)

It's not as if this story hasn't already been told.


Mon, 05/10/2010 - 07:38 | 340869 Postal
Postal's picture

But this time it's different...


Mon, 05/10/2010 - 07:59 | 340897 AD70
AD70's picture

It seems like this could be positive for the EU.  At least the credit is coupled with fiscal austerity measures and a committment not to permit it to expand the monetary base.  This is deflationary but at least introduces the necessary medicine for longterm stability.  The EU in the long run will be much better off than the U.S., which still believes it can borrow without fiscal discipline.

Mon, 05/10/2010 - 10:48 | 341216 Loan Gunman
Loan Gunman's picture

The PIIGS say they will commit to austerity measures.  They'll say anything to get the money.  Bernanke just bought the Brooklyn Bridge.  He got a good price though.

Mon, 05/10/2010 - 11:38 | 341307 Assetman
Assetman's picture

The EU established debt limits for their members a long time ago.  They have been so roundly ignored that even Germany figured out that running a deficit over 3% of GDP was in their best interests.

If the IMF doesn't have a military to back it up, Greece and the rest of the PIIGS can spend away.  The EU would have been much better off in the long run by forcing Greece to restructure its debts and making bondholders take at least a partial haircut.

But nope.  This is just the European version of American QE.  But somehow, the UK was able to skirt by with no commitment, and the ECB was able to get Ben Bernenke to provide loans in dollars.

This is going to encourage even more bad behavior, I'm afraid.

Mon, 05/10/2010 - 13:06 | 341525 AD70
AD70's picture

I have no idea whether the austerity measures will be honored.  But there is a difference in this EU QE (which will only become QE if the credit is not sanitized as promised): no one can tell the Fed what it's limits are or, it seems, even should be.  The ECB is, however, ultimately subject to its component sovereigns and now the IMF will also have a say.  Given German history, its people are already predisposed to flavor deflation over inflation (whether or not wise).  So over the short term, while more pressure will be put on Europe and the Euro until they prove that they can get their finances under control, I like the Euro v. U.S. dollar over the long term.  Europe is blessed to have passed through the debt vigilantes before the United States.  I have a feeling that one day they will be bailing out our butts with the help of the IMF.  Unfortunately there is little either of us can do to stop it. 


Mon, 05/10/2010 - 18:25 | 342215 moneymutt
moneymutt's picture

you know I keep thinking about Weimar Republic....and Zimbabwe...would Zimbabwe be better off if they had been IMF'd...I don't think so, they declared jubilee by printing.

The other thing about Weimar...I read somewhere that they did not print enough to cause that but instead it was massive shorting by foreigners that did them in....

Once debt bubble formed...what is best way out for regular folks? (I guess the answer is the opposite of whatever our leaders do)

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