Corruption

Humans are a flawed species. Our minds are easily manipulated. We don’t like pain. We prefer instant gratification. We are susceptible to mass delusion. We will often choose hope over critical thought. Those with higher IQs will regularly attempt to take advantage of those with lower IQs. Fear and greed are the two motivations used by the minority in power to control and manipulate the majority. The American people have been led astray by a small group of powerful men. We were herded through a door in the wall of perception that promised an American dream of material goods, entitlements and pleasure with no obligations or responsibility to future generations. There is only one choice that can save this country from ruin. Each individual must make a choice to either to continue supporting the manipulative, corrupt status quo or coming back through the Door in the Wall.

“The man who comes back through the Door in the Wall will never be quite the same as the man who went out. He will be wiser but less sure, happier but less self-satisfied, humbler in acknowledging his ignorance yet better equipped to understand the relationship of words to things, of systematic reasoning to the unfathomable mystery which it tries, forever vainly, to comprehend” – Aldous Huxley

Even with rigged electronic voting, media manipulation, and political co-option, I feel our efforts this year will resonate for many decades to come.  Whether we are able to take back social power for regular citizens is not as important as making them aware that they have allowed themselves to lose that power in the first place.  The elections of 2012, ultimately, should be treated as a vehicle for enlightenment, and this enlightenment begins when we are able to recognize the lies we live, and the men who sell them to us…

As Obama takes the stage for tomorrow's State of the Union address, in which, among other things, he probably will not announce that the US debt limit is effectively $16.4 trillion, or 107% of GDP and rising, he faces a very unhappy audience: one which according to Gallup has seen its dissatisfaction with economic and political issues hit record levels. Among the Gallup observations: "As President Barack Obama prepares his annual address to Congress, Americans are broadly dissatisfied with the state of the nation in several specific issue areas, with satisfaction down sharply in some cases since January 2008. However, three issues -- the nation's economy, the size and power of the federal government, and the moral and ethical climate in the country -- fit both of these unwelcome criteria." And with the only response the administration has in the past three years consisting of either printing more money which sends all assets, especially energy, higher in price, or fiscal stimulus of which 90% and more is lost due to inefficiencies and corruption, we don't see satisfaction rising any time soon.

But those Shanghai office towers across the river in Pudong were already standing empty a decade ago – not that you would know from any contemporary reporting. Former Prime Minister Rhu Rongji publicly pleaded with provincial bureaucrats to stop fabricating figures because it made it impossible for him to know what was going on.

Back In May 2009 Zero Hedge was the only website to post (following a NYT Dealbook takedown for reasons unknown) the lament of one, now former, Deutsche Bank employee and whistleblower, Deepak Moorjani, who made it very clear that going all the way back to 2006, Deutsche Bank was allegedly fabricating data, and misleading investors about its commercial real estate holdings, courtesy of a lax regulatory strcuture and the "lack of a system of checks and balances". To wit: "At Deutsche Bank, I consider our poor results to be a “management debacle,” a natural outcome of unfettered risk-taking, poor incentive structures and the lack of a system of checks and balances. In my opinion, we took too much risk, failed to manage this risk and broke too many laws and regulations. For more than two years, I have been working internally to improve the inadequate governance structures and lax internal controls within Deutsche Bank. I joined the firm in 2006 in one of its foreign subsidiaries, and my due diligence revealed management failures as well as inconsistencies between our internal actions and our external statements. Beginning in late 2006, my conclusions were disseminated internally on a number of occasions, and while not always eloquently stated, my concerns were honest. Unfortunately, raising concerns internally is like trying to clap with one hand. The firm retaliated, and this raises the question: Is it possible to question management’s performance without being marginalized, even when this marginalization might be a violation of law?" The story was promptly drowned, despite our attempts to make it very clear just what practices the bank was engaging in in the follow up exclusive titled "One Whistleblower's Fight Against Goliath Over the Definition of Risk." Today, the questionably legal practices by Deutsche Bank are once again brought to the forefront with the Propublica article of former WSJ journalist Carrick Mollenkamp titled "Deutsche Analyst Sounded Alarm When Asked to Alter Numbers." This is the second time a pseudo-whistleblower has spoken out against an endemic culture of fraud at the German bank in two years. And nobody cares of course, for obvious reasons - the Zen-like tranquility of the status quo may never be disturbed, or else the endless crime and corruption lurking in the shadows will be exposed for all to see.

• The Fed's HFT price manipulation code stolen? U.S. Charges Programmer With Stealing Code (Reuters)
• One million homeowners may get mortgage writedowns: U.S. (Reuters)
• In MF Global, JPMorgan again at center of a financial failure (Reuters)
• China's Money Rates Slump After PBOC Injects Money (Reuters)
• Athens closes in on bondholder pact (FT) - or not
• Hedge Funds May Sue Greece If Loss Forced (NYT)
• China Said to Weigh Easing Constraints on Banks as Growth Slows (Bloomberg) - But wasn't a rate cut already priced in on Monday?
• Obama Under Attack Over Keystone Rejection (FT)
• Chinese Economy Heads for Soft Landing in 2012 (China Daily) - don't really expect "China Daily" to tell you otherwise
• Brazil Cuts Interest Rates Further to 10.5% (FT)
• India to Launch $35bn of Public Investments (FT)

The great lie that drives the fiat global financial locomotive forward is the assumption that there is no other way of doing things.  Many in America believe that the U.S. dollar (a paper time-bomb ready to explode) is the only currency we have at our disposal.  Many believe that the corporate trickle down dynamic is the only practical method for creating jobs.  Numerous others have adopted the notion that global interdependency is a natural extension of “progress”, and that anyone who dares to contradict this fallacy is an “isolationist” or “extremist”.  Much of our culture has been conditioned to support and defend centralization as necessary and inevitable primarily because they have never lived under any other system.  Globalism has not made the world smaller; it has made our minds smaller. By limiting choice, we limit ingenuity and imagination.  By narrowing focus, we lose sight of the much bigger picture.  This is the very purpose of the feudal framework; to erase individual and sovereign strength, stifle all new or honorable philosophies, and ensure the masses remain completely reliant on the establishment for their survival, forever tied to the rotting umbilical cord of a parasitic parent government. 

Just out from Reuters:

• NIGERIA'S LABOUR UNION LEADERS SAY STRIKE SUSPENDED - RTRS

Minor down tick in crude on the news, maybe because everyone is still sleeping. So, does this mean that the Iran embargo is back on, and the joint US-Israel wargames are set to resume as "budgetary" conditions have loosened?

Corporations are not people...

Americans have been conditioned for three generations to expect the Savior State to "do something" during downturns to "make it right." The idea that systemic problems are now beyond the reach of the Federal government does not compute; there must be something the government can do to "fix" everything. This notion that the Central State is effectively omniscient and all-powerful is central to the belief system of Americans now. The concept that the government cannot fix the problem, or that government central-planning has made the problem worse, is anathema to everyone conditioned to believe government intervention will "save the day." The basic reality is the Federal government has already pulled out all the stops in the past four years to "make the economy recover," and all its unprecedented actions have accomplished is to maintain the Status Quo via unsustainably gargantuan borrowing, spending and backstopping. If we scrape away the rhetoric and bogus statistics, at heart the current fantasy that the U.S. has "decoupled" from the global economy and will remain an island of "permanent prosperity" in a sea of recession boils down to this belief: the Federal government "won't let us stay in recession." In other words, it's within the power of the Central State to make good every loss, guarantee every debt, maintain the Empire, solve every geopolitical challenge and find technological or military solutions to potential energy shortages. All we need is the "will" to force the government to use its essentially unlimited power to "fix everything." A people conditioned to this expectation will have great difficulty accepting that their government has already done everything possible, and that these stupendous debt-based expenditures are simply not sustainable going forward. Some problems are not fixable by more government intervention; indeed, government intervention in the marketplace is like insulin: the system begins to lose sensitivity to Central State manipulation and intervention.

All you need to read.

Chris Hedges, a Pulitzer Prize winning American journalist, author, and war correspondent, nails the reason that explains why it is so difficult to change a person’s mind when they are committed to believing something even when they are confronted with a mountain of evidence that points to the contrary. Chris states that universities have stripped away humanities and other courses that develop critical thinking skills and instead, due to the historical influences of men like Andrew Carnegie and John D. Rockefeller, focus on teaching young men and women “what to think” instead of “how to think.”

There is nothing more disgusting or detestable than a citizen informant.  Without citizen informants, tyrants could never retain the kind of power they wield.  In fact, without citizen informants, totalitarian movements would never gain traction.  This is why EVERY functional oligarchy throughout history has implemented programs designed to encourage the development of common spies, using the promise of monetary reward, or collective recognition.    Sadly, there are many in our society that would gladly sell out their closest friends and family to the tortures of authoritarian bureaucracy for nothing more than a firm pat on the head and a few fiat dollars.  If there was ever a more degraded lot of bottom feeding opportunist scum, the citizen informant is the very epitome.

And once again, US taxpayers are asked to create high-level jobs overseas. Contenders: Germany, Japan, France, and China....

The Inmates Are Running the Asylum