New York Times

“We will have a financial crisis again — it’s just a question of the frequency,” said the economist Kenneth Rogoff, who, with Carmen M. Reinhart, wrote a terrific book titled “This Time Is Different: Eight Centuries of Financial Folly.” The title says it all. We’ve been through this before and will go through it again.

I lived in Chile during the Pinochet dictatorship—I can spot a fascist police-state when I see one. The United States is a fascist police-state. Harsh words—incendiary, even. And none too clever of me, to use such language: Time was, the crazies and reactionaries wearing tin-foil hats who flung around such a characterization of the United States were disqualified by sensible people as being hysterical nutters—rightfully so. A police-state uses the law as a mechanism to control any challenges to its power by the citizenry, rather than as a mechanism to insure a civil society among the individuals. The state decides the laws, is the sole arbiter of the law, and can selectively (and capriciously) decide to enforce the law to the benefit or detriment of one individual or group or another. In a police-state, the citizens are “free” only so long as their actions remain within the confines of the law as dictated by the state. If the individual’s claims of rights or freedoms conflict with the state, or if the individual acts in ways deemed detrimental to the state, then the state will repress the citizenry, by force if necessary. (And in the end, it’s always necessary.)

Bloomberg reporting that Ken Salazar has added to the roster of adverse bullet points that BP bulls will have to refute as they try to offload their underwater shares to ever diminishing greater fools . 'Interior Secretary Ken Salazar said his agency and the new Ocean Energy Management unit will examine BP Plc’s Liberty drilling project, which is three miles off Alaska’s north coast on an artificial island. Salazar said he asked for a review of the project after the New York Times today said is exempt from the offshore drilling moratorum because it sits on an manmade island built by BP."

These days it's hard being a religious fanatic, also known as a Keynesian. It is even harder when you are Paul Krugman (sadly, the cornerstone of NYT's entire paywall strategy), and everyone in your own country is already sick and tired of, and openly ignores your constant appeals to drown the world in new and record amounts of debt, thus ignoring your appeals with impunity. So what do you do when nobody takes you seriously for thousands of miles around? Why you go even further - to the core of Europe in fact... where you proceed to threaten, badger, insult and give your unsolicited advice to anyone that listens. That "unlucky soul" in this case happens to be Germany daily Handeslbatt, which ran an interview with the "economist" in which Krugman stick not a foot, but an entire SS-20 nuclear warhead armed ICBM, in his mouth. And since Krugman is unaware, preaching the benefits of record deficit spending in Germany, ever since that little experiment in hyperinflation known as the Weimar Republic, tends to generate adverse reactions. Which is precisely what happened in this case. Luckily, now Krugman is a persona non grata in at least one country. Unfortunately, it is not the one in which his trite platitudes and melancholic remembrances of the golden days of Greenspan's credit bubble are still published on a daily basis.

There are some, like Pimco and Whitney Tilson's T2, who enjoy talking their book, and demonstrating they just love to live dangerously by buying the stock of a company which has an Upside/Downside ratio of 1 (or 100% on both sides, with the government dead set on pushing the "equation" solidly to the D side). Then, there are those, who would rather go to Vegas, breathe in deeply some beta radiation courtesy of the Us DoD and DoE, play some serious blackjack, get the presidential suite and all the Grey Goose comped, and have the very same wining odds as a BP investment, even as the house is gamed to win in the long run (thank you HFT).For those in the first camp, below, courtesy of My Investing Notebook, is Whitney Tilson's case on why BP's stock price belongs tens of dollars higher. For the sake of Blackrock and every pensioner in the UK, we hope Tilson is correct. For now, he has a ways to get above hist cost basis.

This past Monday, June 14, 2010, the Unites States Supreme Court let stand without comment or dissent the Second Circuit Appeals Court decision to dismiss Maher Arar's suit against the U.S. Government. Mr. Arar was illegally detained by U.S. officials while in transit back to his home in Canada, and then handed over to Syrian Intelligence officials using “extraordinary rendition”. The Syrians kept Arar for ten months, interrogating him using torture, and finally releasing him when they concluded that Mr. Arar was neither a terrorist, nor in possession of any relevant intelligence. Once free, Mr. Arar sued both the Canadian government (which peripherally assisted in his kidnapping and torture) and the U.S. government. The Canadian government issued him an unequivocal apology, and $10 million Canadian in compensation. Mr. Arar did not get any similar justice from the U.S. government, though. The Second Circuit Appeals Court quashed his suit by stating that Congress had not authorized such suits as Mr. Arar’s. By letting stand the Appeals Court decision to quash the suit Mr. Arar brought against the U.S. Government, the Supreme Court effectively ruled that the Government cannot be held accountable by private citizens for its actions. The Government can do as it pleases to any individual—including assassinating one of its own citizens—and there is no legal remedy. Now let's compare how the U.S. Government dealt with BP, regarding the oil spill disaster in the Gulf of Mexico.

There’s a great deal of chatter in the press and online about the tremendous US$1-trillion-dollar mineral “discovery” in Afghanistan headlined by The New York Times recently. Most of the discussion seems to centre on whether or not this is really news and whether or not the NYT was played by the powers that be for purposes of their own. Few, if any, people seem to be questioning the value of the so-called discovery itself. The US$1-trillion-dollar figure, at best, cannot be anything more than the wildest of hopeful guesses. One does not have to be a geologist or an engineer to understand why. When geologists find outcropping mineralization, or other signs that an economic deposit of minerals may be present, that is not called a discovery. Even if the signs come from the latest scientific equipment flown over the country, as the U.S. government appears to have used, the result is still just an anomaly: a hopeful indication of where to look. And anomalies are like opinions: Everybody has one.

Reader Wally the Tiger has done an impressive job of connecting the dots in a highly complex situation involving a convicted securities fraud criminal, his wife, and her incredible stock-picking track record, and in providing a list of questions, which if answered without complete satisfaction, would likely provide the SEC with at least an open case of potentially criminal behavior. We would like to use this great piece of research to open up Zero Hedge to reader submissions for comparable such distributed investigative efforts, which, unfortunately, seek to do the job of the woefully inefficient Securities and Exchange Commission. At least, there is always that promise of an SEC bounty for every tip that leads to civil charges. Of course, the receipt of one would imply that in addition to surfing for porn all day, the SEC spends countless hours reading this very blog (which they do) instead of actually doing their job.

We don't need to even discuss conspiracy theories about what happened on 9/11 to be incredibly disturbed about what happened after: the government's obstructions of justice.

Indeed, the 9/11 Commissioners THEMSELVES are disturbed ...

Bottom line - while a 3% rally in stocks and the best performance day in IG and HY credit since 5/27 hide what we think is going on under the covers. Breadth was much more mixed in single-names and the unwinding of index overlays and single-name longs (bonds or CDS) that was evident today seem to signal a risk-off sentiment from the top-down (with technicals dominating index moves today). The increasing correlation (and again we are careful to avoid using the term dependence) between stocks, credit indices, and carry currency crosses appears to be getting tighter (with EURJPY and ES_F hardly leaving each other's side today) but for the third day in a row, stocks have outperformed credit.

Yes, I'm talking about a cameo by the Nobel Prize winner, famed economist and New York Times columnist, Paul Krugman and Sean P. Diddty in an upcoming summer comedy with enough sex and drugs to kill a small commune--"Get Him To The Greek."

There is so much misinformation being flung around, that - as a public service - I will continue broadcasting the real scoop ...

They're already talking about the next approach ....

If you don't give us what we want, we'll shoot ourselves ...

The reform bill is a joke. It reforms nothing, it fixes nothing, and it will not prevent the next much bigger crash from happening (with or without Goldman's Supplemental Lack of Liquidity Provider assistance) - just two items that need to be pointed out: $6+ trillion in GSE debt - untouched, $400 trillion in IR swaps: untouched. This is reform? However, if you care enough to know what a bribed and corrupt Congress and Senate have "reformed" here is a useful cheat sheet courtesy of the New York Times.