Activist Shareholder

Per assorted tweets from the country that is only second (but certainly not last) in experiencing first hand the Genocidal one's monetary policies, the Egyptian government has now effectively shut down the internet, text messaging and possibly land lines -link. This includes Facebook and Twitter. Ironically this act of desperation in Egypt which seeks to prevent the ongoing televising of the revolution, would be precisely the match that would set off America on a certain path to revolution: not ongoing banker rape, not Primary Dealers stealing from babies, not Greek president G-Pap robbing your wallet... merely a shutdown of Facebook and Twitter (and possibly cable) and 300 million well-armed American will promptly go apeshit.

Our veterans were an important part of the internal control mechanism that all unorganized groups develop as a matter of instinct and survival. Natural leaders emerge and are respected not just for their inherent authority, but because of their common sense approach and fairness even to those they oppose. Thus form and function develops out of chaos and the community coalesces.

Philly Fed's Plosser once again releases a slam dunk speech which is the most vocal critique of Ben Bernanke's interpretation of the freedoms afforded to him by monetary policy to date. "How do you use monetary policy to burst a bubble in Las Vegas real estate, where house prices were appreciating at a 45 percent annual rate by the end of 2004, without damaging the Detroit market, where prices were increasing at less than a 3 percent annual rate? Because monetary policy is such a blunt instrument, asking monetary policy to do what it cannot do, such as seeking to deliberately influence the evolution of asset prices, risks creating more instability, not less. Moreover, the moral hazard created by the belief that the central bank would intervene if prices of a certain class of assets became “misaligned” might, in fact, cause more inefficient pricing and more instability, not less...monetary policy cannot reverse the sharp decline in house prices when the economy has significantly over-invested in housing" And more: "I have advocated the elimination of Section 13(3) of the
Federal Reserve Act, which allowed the Fed to lend directly to
“corporations, partnerships and individuals” under “unusual and exigent
circumstances.”" Plosser's conclusion is spot on, and means that Congress should immediately enact a limit on the Chairman's recently self-appointed 3rd mandate, which is to not only reflate the biggest asset bubble in history, but to get the Russell 2000 to 20,000: " I too am concerned that we are in the
process of assigning to monetary policy goals that it cannot hope to
achieve. Monetary policy is not going to be able to speed up the
adjustments in labor markets or prevent asset bubbles, and attempts to
do so may create more instability, not less. Nor should monetary policy
be asked to perform credit allocation in support of particular sectors
or firms. Expecting too much of monetary policy will undermine its
ability to achieve the one thing that it is well-designed to do:
ensuring long-term price stability."

A week ago we noted that the first Fed 'excess liquidity' inspired violence of the year broke out in Algeria, where following the recent release of FAO data confirming food prices have just hit an all time high, rioting broke out "over rising food prices and chronic unemployment... with youths torching government buildings and shouting "Bring us Sugar!" To be expected, this event received no coverage in the US. In the meantime, the violence has escalated and spread to neighboring Tunisia, where weeks of clashes have left 14 dead. The reason for the lethal violence- "high unemployment and the surging cost of living." One would think that excess economic slack from pervasive unemployment would bring about a plunge in the cost of living... Unfortunately, that is not the case in a centrally planned world.

Interestingly, the esteemed economist John Maynard Keynes considered the love of money a form of mental illness. Our need for money becomes the ‘hook’ through which the Big Wetikos (who control the supply and value of money) can ‘yank our leash’ and manipulate humanity.

"You know that Republicans will yell about the evils of partisanship whenever anyone tries to make a connection between the rhetoric of Beck, Limbaugh, etc. and the violence I fear we’re going to see in the months and years ahead. But violent acts are what happen when you create a climate of hate. And it’s long past time for the GOP’s leaders to take a stand against the hate-mongers." Paul Krugman

Perhaps debates about inflation and deflation paint with too broad a brush, or too narrow a focus ...

To all those who penned lengthy essays and activist missives to various law enforcement and judicial organizations in 2010 over the fraudclosure fiasco, we have one word: condolences. According to Bloomberg, which cited Iowa Attorney General Tom Miller, "The five largest mortgage loan servicers, including Bank of America Corp and JPMorgan Chase & Co may be the first to settle with 50 state attorneys general who are investigating foreclosure practices." It appears these attorneys general were all sequestered and advised of the now-traditional M.A.D. apocalypse that would follow if this latest iteration of Wall Street's corner cutting was pursued by the full extent of the law. In other words what many have claimed is the biggest fraud in MBS history is about to be swept under the rug in exchange for 30 pieces of silver wrtistslaps. In the meantime, disclosure such as that revealed by Allstate, which virtually proves that Bank of America was lying outright to investors about its portfolio quality, will be made irrelevant, and yet one more aspect of TBTF fraud will be institutionalized.

Dennis wants the power of the Federal Reserve in Congress. His ambitions are actually quite disturbing because he is also pursuing the flawed concept of full employment, but now he has added even grander ambitions - the one thing that the horrible Federal Reserve prevented Congress from doing - creating money for the purpose of spending it. Granted with QE2 in full swing it becomes difficult to make that argument, because buying US debt so that the US Government can continue functioning is essentially the same thing, but at least our total debt grows and Americans are still aware of the cost. With Kucinich's bill this aspect disappears as money will appear whenever Congress wishes it to be so and the value imbued in this money will come through Congress alone - a Chartalist dream come true. - Arkady Kamenetsky

Yesterday we got to hear Doug Kass recite Howard Marks' most recent views on gold by memory (badly) and come up with the conclusion that gold may drop 25%, something not even Marks was foolish enough to suggest. Today, we present a contrary view, that of the extremely original and always provocative Simon Black, aka Sovereign Man. Writing from Auckland, New Zealand, the activist who has previously openly defended expatriation as a means of "revolting" against the collapse of US economics and society, turns his attention to gold and shares his thoughts on what to look for "when the market tops." As always Black, who has encountered more cultures in the past few months than most do in their entire lifetime, gives an unorthodox view on the metal's prospects, which if nothing else, are based on a much broader sampling of data, than merely the (biased) read of the opinion of just one other person. His conclusion is not that surprising for someone who has a worldview that is wider than just the FDR through the West Side Highway: "People are only starting to wake up to the reality that unbacked paper currency is fundamentally flawed, and it will be a long time before this belief becomes widespread once again, just as it was in ancient times."

In this week's Straight Talk episode, Chris Martenon interviews Charles Hugh Smith, both very insightful individuals who have repeatedly appeared on the pages of Zero Hedge with unique and always original perspectives. Of all issues that dominate CHS' outlook on the economy, society and politics, the top two items that keep Smith up at night are "demographics and Peak Oil...which cannot be massaged away by policy tweaks or financial engineering." Much more in the enclosed interview.

Nigel Farage made waves recently when he told the Europarliament the truth about the sad fate of the euro experiment. Obviously, it was not taken too lightly by the career politicians who, just like our own, have made it their life mission to lead a failed economic experiment to its sad end, no matter the social cost and public suffering. Today, Farage made a repeat appearance on King World News continuing with his warning that the one most likely outcome of Europe continuing on its autopilot course will be one the culminates with "violence and extremism." To wit: “Nobody dares to admit that they got this whole thing wrong...Once people realize that who they vote for in general elections has become no more than a charade, then if they want to change things, all they are left with is civil disobedience and violence, and we’re beginning to see this already.  In Greece we are seeing small terrorist style attacks that are taking place on EU buildings that are taking place against EU officials...So what happens if you rob people of their rights is they will turn to violence and they will turn to extremism, and that is why I believe these people to be so dangerous."

Goldman's Jan Hatzius, who after flipping his view on the economy in early August, and taking all of the street with him, has recently flopped back to a semi-optimistic outlook. What is amusing is that despite his suddenly far more bullish outlook, he, as well as the entire Goldman team, continue to call for $2 trillion in total QE2. Of course the two are completely at odds with each other, but hey - if it means 2011 will be another record bonus year, why leave something as irrelevant as logic stand in the way of that 3rd French Polynesian island. On the other hand, Hatzius is certainly not stupid, so in continuing with his rhetorical device of an hypothetical interrogation, today Hatzius releases his latest Q&A, this time focusing on the future of Quantitative Easing. What is most notable, is that as of today, the Dutch strategist sees the possibility for less QE2 post June, contrary to his recent missives which expected QE2 to continue until the full $2 trillion of expected monetary base "printing" was fulfilled. Then again, as Ireland has so aptly demonstrated today, at this point it is no longer a question of whether any economic policy is viable in the long-run. All that matters is for putting enough lipstick on the bankrupt global pig for another few months at a time, so that yet another sovereign constituency can foot the bills in what has become a rolling global bailout of country after country.

• Cowen Scorned as Irish Mourn Loss of Sovereignty With Bailout (Bloomberg)
• Irish Bailout May Unleash Vigilantes on Portugal (Bloomberg)
• Spain and Portugal rule out rescue packages (FT)... until they rule them in
• Hong Kong Said to Plan New Property Curbs; Stocks Decline (Bloomberg)
• Andy Kessler: What's Really Behind Bernanke's Easing? (WSJ)
• In Shanghai, prices fly high (Reuters)
• Heat Stays on California $10 Billion Note Offering (WSJ)
• Special report on SAC's "information arbitrage" strategies  (Reuters)
• Pimco Said to Seek $1 Billion to Buy Troubled Assets From Banks (Bloomberg)

The man who made Goldman Sachs a household name (using some very helpful and lurid imagery), has found a new target: Bank of America, JP Morgan, Wells Fargo and Citi.... And the "Rocket Docket." Quote Taibbi: "The Rocket Docket exists to launder the crime and bury the evidence by speeding thousands of fraudulent and predatory loans to the ends of their life cycles, so that the houses attached to them can be sold again with clean paperwork. The judges, in fact, openly admit that their primary mission is not justice but speed." And here comes the trademark Taibbi visual: "the foreclosure crisis is Too Big for Fraud. Think of the Bernie Madoff scam, only replicated tens of thousands of times over, infecting every corner of the financial universe. The underlying crime is so pervasive, we simply can't admit to it — and so we are working feverishly to rubber-stamp the problem away, in sordid little backrooms in cities like Jacksonville, behind doors that shouldn't be, but often are, closed." Pure genius.