ilene's blog

What is China’s secret? According to financial commentator Jim Jubak, it may just be “creative accounting” -- the sort of accounting for which Wall Street is notorious, in which debts are swept off the books and turned into “assets.” China is able to pull this off because it does not owe its debts to foreign creditors. The banks doing the funding are state-owned, and the state can write off its own debts.

Someone has to lose but, in this case, the loser is the Federal Reserve Bank of the United States of America – which plays the part of the perennial sucker as they are willing to sit down at the table and be taken for all they have two or three days a week. And why are they willing to be so generous? BECAUSE IT’S NOT THEIR MONEY!

Sadly only about $4Tn of our debt is owed to China, Japan and our other foreign creditors. While we may be stealing $1Tn from them, at least they get to sell us stuff. The rest of the debt, $11Tn, is owed to ourselves - to all the widows and orphans and pension funds that bought US bonds as "safe" investments as well as the poor suckers who worked their whole lives socking away 12.5% of their wages into a Social Security program whose "lock box" was raided by simply forcing retirees to lend their money to the government at unreasonably low rates and will now be paid back in dollars...

Pimpco has slashed their holding of US Government bonds from 63% of the fund in June to 33% in September and now, finally, Mr. Gross is telling all the suckers he dumped his paper onto over the past 3 months that the party is over in the bond market. Why would he do this? Well, aside from being an evil, manipulative, amoral bastard - it makes good business sense.

They call it "Doctor Copper" because copper pricing is a pretty good indicator of economic health. It's more of a demand metal than gold or silver and hard to fake and there aren't any silly ETFs stockpiling it although China has socked away a full-year's supply, which has given copper a very false sense of demand...

The pension turmoil is not limited to France either. US pension funds are underfunded by nearly $3 trillion. Will US workers be as willing as their French counterparts to face the beatings (to defend "what's theirs") or will they throw up their hands and appeal to Obama for help?

The conference itself does not take itself too seriously. Even Nassim Taleb was able to make a few jokes while explaining to us why the financial system is irrevocably screwed up unless we give it a major overhaul.

Timmy took a big doo doo on the rest of the World as he pressed fellow Finance Ministers into (in theory) setting mechanisms to address trade balances (which means export countries need to strengthen their currencies against the dollar) while importing countries (like US) should not try to manipulate their own currency. Well, that sounds reasonable EXCEPT, before the ink is even dry on the G20 release, Timmy flies off to China to get them to commit to revalue the Yuan...

That’s the word from US Treasury Secretary Tim Geithner as he seems to forget that people follow him around with notepads and microphones as he begins the game of "Survivor - Global Currencies" although Tim seems to be following the very interesting strategy of trying to be voted out first so maybe there’s a method to his madness after all.

The unnamed official nearly fell off his chair laughing when I said "So, does the US still have a strong dollar policy?" It was meant as a joke.

Last week I thought the dollar was bottoming and I stand by that as it’s an important time to stay flexible and take those BS long profits off the table before the market takes it for you!

The Democrats do the same nothing about this scam that the Republicans did while the American people pay tens of Billions of dollars every month to speculators like GS, JPM, C and other market manipulators who buy oil they have no need of and store it on tankers to fake demand and wait until the last minute to cancel contracts to make sure supplies are in a constant state of disarray - all in order to reach into the American consumer’s pocket and steal as much as they can from one of the few things you can’t do without.

We have a clueless top 10% partying on as if the World revolves only around their net worth while the bottom 90% of the people tumble into the abyss - getting a little poorer and a little madder every day.

Let me state this another way: two trading firms were predominantly involved in handing investors’ losses of 60 per cent or more in their stocks on May 6 but a staid old mutual fund company trading an S&P futures contract in Chicago has been fingered as the culprit of the Flash Crash.

Looming losses from the mortgage scandal dubbed “foreclosuregate” may qualify as the sort of systemic risk that, under the new financial reform bill, warrants the breakup of the too-big-to-fail banks. The Kanjorski amendment allows federal regulators to pre-emptively break up large financial institutions that—for any reason—pose a threat to U.S. financial or economic stability.