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On Shills, Technocrats, Politicians and the Sinking Ship
Three months ago I made fun of an ABC News report about the stock market. The occasion back then was the rise in the Dow Jones above 13,000. ABC has a panel of thirteen “experts.” All thirteen were in agreement; this time the move in stocks was the real deal. All thirteen experts were convinced that stocks had no where to go but up for the rest of the year. Of course they were all wrong.
These are the faces of ABC’s experts. If you watch TV, you may recognize them. I don’t think these folks are experts. They are shills. If they did not see problems looming a few months ago, they are either blind, or they were just lying.
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These very same experts (and most of the politicians in Europe) are selling a few other stories. I think they are as wrong today as they were back in February.
The big lie today is about Greece. Almost every story I read on this topic is the same. If Greece is forced to leave the Euro very very bad things will happen, including:
1) Serious hardship will befall the Greek economy. Unemployment will rise, the economy will fall.
2) Contagion will spread from Greece. Countries such as Spain and Italy will come under attack. Their ability to float new bonds will be impaired. The cost of debt will hinder their ability to grow; unemployment will rise.
3) If Greece goes into the toilet, there will be capital outflows from Southern Europe to Germany. These capital flows will undermine the banks and capital markets of countries in the EU.
4) If the Euro Zone is unstable, then the global stock markets will fall. As equity markets tank, the global economy will go back into recession (or worse). Therefore there is no option but to save Greece.
This is complete horse shit.
1) Greece has been in a recession for five years. There is not one chance in a hundred that it is going to get out of recession anytime in the next five years if it stays in the Euro. The kindest thing that the leaders in Europe could do would be to kick Greece out. Greece should never have been in the Euro in the first place. Mistakes were made. Mistakes are always expensive, but the worst mistake is not recognizing that a mistake was made.
2) Contagion? What is going on today if not contagion? Every country in Europe is already infected. The disease has now spread around the globe.
3) Capital flight will happen if Greece goes turtle? Over the past two months reported capital outflows from the PIIGS exceeds $200 billion. (I think it is much higher than that.) German and Swiss bond yields have gone negative the past few weeks. There are border guards surrounding Switzerland these days to keep hot money out.
4) The US stock market has lost a cool $1 trillion since the May 6 Greek election ($357 billion on Friday alone). Global stock markets have fallen another $1T in the same period. The book losses on other asset classes is enormous. If you add up the losses in the past three weeks, it easily exceeds $3T (5% of total world GDP).
The best thing the politicians could do for the voters they represent is to just let Greece go. Yes there would be costs, but the costs of pretending that there is a viable option to keep Greece in the Euro will be ten times the cost. If all of Greece’s debt were wiped out, the cost would be $250 billion. By my calculation, the world has already paid a price 12 times higher than that in just the past three weeks. If the game with Greece continues, the cost will be $10 trillion and a global depression. The pundits and pols are saying that the worst case is a Grexit. I say the worst case is another effort to keep Greece in.
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The blow up in Europe (and damn near every corner of the globe) the past month has led most observers to conclude that another round of Federal Reserve intervention is a just few weeks away. The pundits believe that Ben Bernanke will rise up and push some monetary buttons and all will be well again.
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How can supposedly bright people believe that another four month - Fed induced sugar high can do any good at this point? This is as stupid as the forecast that stocks were going to keep rising a few months ago. The Fed is powerless to change things; the markets have already done more than the Fed could ever do.
What might the Fed do next according to the seers? Promise to keep rates low for a long period of time? Ridiculous. We have been living with ZIRP for four years. It hasn’t worked. It's not going to work.
The Fed could extend Operation Twist, but that would not do anything either. The ten-year is at 1.45%. Who in their right mind would think that pushing the T-bond to 1.2% would make a difference? Only a fool.
Some are pushing for another round of pure QE. The Fed would buy up another $600 billion of Treasury bonds and mortgage paper. It would print the money to pay for the purchases. That thinking is insane. If the Fed were to announce a big QE program, the markets might rally for a week, but when reality sinks in, and the downside of further monetary expansion is realized, the markets would resume their slide.
Don’t believe in the pundits out there that make it on TV every day. They are either shills for their employers, blind and stupid or just flat out lying. Don’t believe in the politicians or central bankers who are pushing the case for more monetary gas. Those folks are so pregnant with their past mistakes, they can’t possibly change direction. Rather than admit their mistakes, they will double up and make the same bad choices again.
There is only one option left for policy makers. Get real. Greece has to go, Spain too. Printing money will not work, that has to stop. Yes, that direction is painful. It will cost the Germans a bundle to make things right, but that is cost it must bear. After all, Germany did create this mess, and Germany benefited from it for a dozen years. The rest of the world will suffer as well. But what is the alternative?
The ship is sinking. The captains are embarrassed that they have put the ship on a reef. They don’t want to admit to past sins so they refuse to put the lifeboats in the water for fear that the passengers will lose confidence. What those captains are actually doing is insuring that all the folks on board will drown. I would like to see a few of those captains go down with the ship, but it is unnecessary that all the passengers (seven billion) drown too. We are on the edge of a very hard landing. I don’t think it can be avoided any longer.
The next two weeks are critical. Either the globe goes through yet another round of "extend and pretend" that won’t work, or we let some boats sink. A year after those boats and their captains sink, the world will be a much better place. If the decision is made to keep the sinking ships afloat, we will pay for it with another decade of deflation.
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But you see, theyll just move on to the other giips and then France and so on. The whole thing is a dead duck, but they just cant let go. They love that duck.
On the other issue I happen to think that negative bond coupons would be a good idea for locating where the real market is. I just dont think theyd like what they found when they went there. Better than QE(n) but a huge emetic, bit like the Grexit!
It's called a controlled demolition. The short term end goal seems to be no more cash or coins, electronic money only.
That's when the real fun will begin. No transaction goes unnoticed or untaxed. The banksters and the FedGovs get a cut of every transaction.
No one can live without the "mark of the beast".
Bruce, debt money tyranny is all a fraud. It is a societal asset stripping operation. The Money Power Owner Lenders get a vig from the world's economy every year, thus making the debtors indebted to them without the money available to ever pay the debts.
The Owners lend $20 @ 5% to society.
After 1 year, $21 is owed, but only $20 was given to society.
The Owners now OWN US THROUGH FRAUD.
This is what Henry Ford spoke of when he said...
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. The one aim of these financiers is world control by the creation of inextinguishable debt.” Henry Ford
Yes, it is theoretically possible to pay back the debt, but only if every penny of interest paid to The Owners is paid back to society - which doesn't happen as the oligarchs are ACCELERATING the amount of money they take from society, not returning it.
BTW, a bailout is when The Owners lend society $20 and then give the $20 proceeds to their front corporations - meaning society now owes $20, but doesn't have any money available to pay it back.
Yes, the media is either controlled or too ignorant or too gullible to figure out the simplicity of the bailout con game.
Bailouts bankrupt society to The Owners EVEN FASTER.
Oh, and try this paradigm of reality on for size - we all work for the bankster borg.
Banks sell debt. Money is debt. Corporations and people maximize profit and paychecks.
Well, think it through... "maximizing profits" is equivalent to "maximizing everyone else's debt" - which benefits the debt producers wihtout those SOBs even lifting a finger. You want a high income? You have to saturate society with debt (aka, make lots of money, which is someone else's debt). The banksers get their vig from that high income - every year. You, the "mark" get to work hard to make money, they, the con artists, sit back and collect the vig.
The system is a fraud.
Bernanke is a criminal charlatan. He is no idiot - WE ARE THE IDIOTS. They play us for COMPLETE AND UTTER FOOLS.
Do you know how dumb they think we are putting Andrew "I killed the bank" Jackson on their Debt Money Tyranny $20 debt note? Do you? They think we are idiots they can taunt because of our ignorance!
Do you know that the Fed faces the Lincoln Memorial - the memorial to a man to cut the banksters out until he was assassinated?
"I have the Confederacy before me and the bankers behind, AND FOR MY COUNTRY, I FEAR THE BANKERS MORE!"
They take us all for complete fools. They must laugh their tyrannical, criminal *sses off at the ignorance of those who have no concept of asymmetrical warfare - economic warfare. They aren't hiding in the bushes and picking you off, they hide in your government, in the media, in the Fed, in the mega corporation, all in plain sight... AND PICK US ALL OFF.
To you professional economists - the idea of excluding debt from your analysis is as stunningly moronic as proclaiming that a family of 5 at Thanksgiving dinner is EQUIVALENT to Jeffrey Dahmer and 4 drugged out kids because there are 5 people in both rooms.
Oh, you can't think through that one? Let me simplify it for you. It is like comparing a society where everyone has approximately equal wealth (assume equal contribution to society) to North Korea where all the oligarchs have all the wealth because both society's have $1 trillion in money.
THEY AREN'T EQUAL! THINK!
Yes, every debt is someone else's assets - BUT THE CRIMINALS RIGGED THE SYSTEM SO THAT, OVER TIME, THEY GET THE ASSETS AND SOCIETY GETS THE DEBTS - DEBT MONEY TYRANNY DEFINED!
The reason you exclude debt is because the crooks don't want you looking into that door and seeing the mechanics behind Debt Money Tyranny.
One you get it, STAND UP FOR AMERICA AND SPEAK OUT!
Otherwise, you are a Debt Money Tyrant collaborator!
THERE IS NO FIX WHEN THE SYSTEM IS A FRAUD OPERATING **EXACTLY** AS IT WAS ENGINEERED TO ACT!
All the debtors hope for hyperinflation so their debts get zeroed for a loaf of bread.
While hyperinflation will eventually come, it will only come after the oligarchs have busted out most of the debtors and rolled their assets up under their TBTF&Jail (so says the tyrants, anyway) front corporations.
Bank failures, FDIC failures, SS failure, MC failure, pension failure, economic collapse - it is all engineered to destroy the American people and their independence from Big Finance Capital criminal, thieving, murderous tyrants.
WTF up people - they run the third world like Hitleresqe Ghettos, albeit with much better marketing, and now they've turned both barrels at YOU AND YOURS!
in summation:
Lord Acton – “… the issue which has swept down the centuries and will have to be fought sooner or later is THE PEOPLE VERSUS THE BANKS.”
http://www.save-a-patriot.org/files/view/whofed.html
Who OWNS this company? Peter Kershaw provides the answer in “Economic Solutions” where he lists the ten primary shareholders in the Federal Reserve banking system.
In Portland, it always rains.
Bullshit.
Sometimes it snows.
Not to be a bummer and rain on the doom and gloom, but I just to moved to Portland, Oregon and I find the following: (a) the pubs and restaurants are full and fairly pricey (b) houses that go up for sale receive multiple bids and are sold within a week and (c) many people have some damn nice cars. To me, the 99% that has to use the old economics, 2+2=4 aren't doing so bad. It's the guys that use 2+2=whatever that are in deep shit. Just sayin.
I had a home there 10 years ago that I paid $169k for, it is on zillow for $437k these days. Unless it has solid gold toilet seats, it is false valuations ... still. A friend lived down in Bend, OR and said Californians were buying homes there for $450k with most jobs in the area paying $15/hr or less. Indeed the pubs and restaurants downtown are busy but that is where people go for fun and they get to use the Max.
Let us in on what is keeping Portland alive these days. It was in full scale decline since GP left and Weyco absorbed Willamette.
Unfortunately after interest and taxes in old econony households 2+2=2 and is not adjusted for inflation.
That's all the "Old Money" from Detroit resettling.
I read it costs $56 a sf to build a "new nice house" now since the raw materials fell so much and labor in the USA is dirt cheap due to the unemployment and abundant hispanic population. I have no idea why someone would pay more then $100 per sq foot for a house unless you have to fork out a $100k for permits (like in Petuluma) which is definitely exceptional.
What was a Kohler shower body 4 years ago? 1/3 of what it is today.
How about roof shingles? up 100% in 3 years.
Electric wire? Breaker switches? Copper tube? Plumbers/excavators/foundations guys/asphalt/nail guns/tiles?? I could go on.
I also don't agree with you about the "abundant hispanic population". 4mm illegals have left the country since 2008. Where I am, there is a shortage of labor for the pick and shovel jobs.
Bruce Krasting
Cedar Shingles peaked at $250/square 4 years ago, fell to $85/square and stagnated for several years. This spring you can buy @ $180-$190 and the market is softening. Maybe you're referring to asphalt roofing.
Things made out of copper are sliding and will continue to slide as inventories are revolved.
Some price stupidity comes from consolidation as volumes are way down.
How the Big Box stores rape the consumer is another issue.
What is interesting is that this massive run up in commodities occurred during what Brucey-baby here has admitted to being "the greatest recession since the Great Depression." go ahead...keep laughing at the economics profession you plucking bozo's. From whence comes ANY demand right now?
LOL
http://www.bizjournals.com/portland/news/2012/05/29/home-prices-down-but...
Portland home prices hit post-recession low Portland Business Journal by Wendy Culverwell , Business Journal staff writerDate: Tuesday, May 29, 2012, 12:11pm PDT
Bruce keep up the rants. Not to impose, but can you rant more often?
It is a good article but in all honesty, El Erian has been consistant in his view that the economy is going into the crapper. I can't believe he would have said "all is well" back in January.
you have been seduced - of all in that grid of evil, El Erian is preeminent - think Palpatine
qe and this whole"crisis" is designed to drain the worlds people of their lifetime earned
wealth and enslave their children to a lifetime or more of debt, the federal reserve system
is working perfectly, we now see its true purpose 100 years after its cancerous cells were seeded.
Draining us all of our lifetimes' wealth earned sounds pretty dramatic, but it's not just the wealth we've earned.
It's all wealth earned by humanity from Day One. Cummulative to this day.
All skin--skin per se, you might say--is in.
Financial crimes against humanity will be punished one day, methinks.
A Greece exit does nothing to solve the basic insolvency of the EU banking system; e.g. Spain will still be hopeless. Why the blind focus on Greece Bruce?
Regarding QE: Agreed it will solve nothing but the Fed has to print to fund the massive structural Federal deficit. Money printing is a given. What alternative would the banks that own our politicians consider?
Finally, how can you pick on Mark Zandi? He may be stupid and soulless, but he REALLY wants a Government job! You try working at Moody's...
I said that Spain would have to exit as well. The process has to start at the bottom, the bottom is Greece. How high it rises within the EU remains to be seen.
I have no sympathy for Zandi. He is, as you say, bucking for a job in DC. So he makes happy talk which is supportive of DC. He's in bed with the devils, his forecasts are tainted.
Right now the withdrawals from the PIGS banks are just a slow leak. Compare that to 2008, when the Money Market run was at a rate of $250 billion/hour! If there is a Grexit, there will be a run on Spain, as the very concept of a Spexit is too ugly to contemplate. The ECB will have to stop the run the same way Bernanke stopped the 2008 run on the money market funds - by proclaiming a blanket guarantee. Only the Sovereign Isuer of the Euro (the ECB) has the power to make a blanket guarantee stick, and they will. Afterward, Mario Draghi will have to force the EU to have a Constitutional Convention and a quick referendum on ratification of a new EU Federal Constitution.
Good article an dvery cogent. "Experts" like these don't make money unless they paint a happy future. Same for the housing market.
I highly recommend the book, "Future Babble" about these 'expert' opinions. I prefer to listen to my astrologer...she is much prettier and correct more times then any of these experts.
However, Mr El is perhaps more honest then the others. He admits telling his wife in 2008, "go the bank and withdraw as much cash as they will let you."
My guess is the others would never admit they were scared.
BRAVO Bruce Krasting!!!
TRUE DAT.
This is all EXACTLY what Karl Marx said would eventually happen to Capitalism.
Wealth would become concentrated - and the proletariat would eventually be forced to revolt and burn everything down.
What did Karl Marx say about Communism?
Capitalism? Do you mean the crony/fascist central bank bought off politicos and revolving door regulators who have lulled the masses into the apathy of socialist entitlements, and for anyone whos sorta paying attention, they have their MSM sock puppets point at the cheap debt ridden veneer and claim this is what capitalism looks like?
Tell me where I can find this "capitalism" where I can invest my little piece of capital into actual productive enterprises who are judged in market based fundamentals and priced based on demonstratable reality? Who are subject to real life conditions and the push pull of a free market, and not central planning diktats, the blood sucking nanny state taxes, the guarded territory of special interests, or ground into dust by the whims of petti self important bureaucrats
Do you really think that fantasy called marxism that was and is funded by the biggest capitalists in history is the answer? They created it. Yank on any marxist thread, and eventually it leads back to a Schiff, Ford, GE, a Rockefeller, a Soros, a Carnagie foundation. Under a marxist system, no individual has any authority, rights, property, or wealth. All power rests with the State. And THEY control the State. Its the ultimate cartel.
What we are experiencing is not capitalism, it is the bastrd son of marxism and big money known as fascism. thesis, antithesis, synthesis. wow, almost like someone planned it.
That's just it, we live in a world of deceit.
Communism and Capitalism have NEVER existed at scale. So why is everyone saturated with terms as real as Santa Claus and the tooth fairy?
Because the **reality** is that every nation is essentially an oligarchical dictatorship.
No, oligarchical dictatorships are not all the same. Stalin's version and Mao's version were quite different than America's version... we are a "soft" financial oligarchical dictatorship while they were "hard" boot on the neck oligarch dictatorships.
However, "soft" is "hardening" quickly as the tyrants wage war on the Constitution and Bill of Rights, set up re-education camp programs, buy 100s of millions of domestically aimed hollow point ammo (can't use it internationally, folks - illegal), loot segregated accounts and saturate society with Henry Ford's "inextinguishable debt" which he claimed existed to give the oligarch financier's "world control."
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. The one aim of these financiers is world control by the creation of inextinguishable debt.” Henry Ford
Ford was right.
"another four month - Fed induced sugar high can do any good at this point?"
Stupid is as stupid does -- it's what the FED will always do
Sun Tzu said one has to understand the enemy to have a chance at winning.
The Fed isn't stupid. For those that don't know, the Fed is controlled by the people who sit on its Board of Directors - like any private corporation. Jamie Dimon is one of those people.
Let's see how "stupid" the Fed has been and how much its stupidity "cost" Jamie Dimon and JP Morgan.
1. JP Morgan designated TBTF. Fed controller wins, society loses
2. JP Morgan bailed out with tax payer money. Fed controller wins, society loses.
3. JP Morgan gets to lie about their book assets in order to lie about their profits. Fed controller wins, society loses.
4. JP Morgan gets to bribe Jefferson County officials and criminally generate an extra billion in profits from tax payers. Fed controller wins, society loses.
5. JP Morgan gets to use Jon Corzine to loot $1.6 billion from segregated MF Global customer accounts and gets to keep the loot. JP Morgan wins, society loses.
6. Jamie Dimon gets record bonuses and pay. Fed controller wins, society loses.
7. The Federal Reserve lies about their Section 2A mandate and never gets called on it (there is no dual mandate - it is singuler... LOK IT UP AND READ IT YOURSELF!). Fed controller wins, society loses.
8. The Federal Reserve criminally blew the world's largest credit bubble, BREAKING SECTION 2A BLACK LETTER LAW, and the current bust is a direct result fo their criminal actions. Fed controller wins, society loses.
9. JP Morgan is bigger than ever and controls more customer assets than ever. Fed controller wins, society loses.
10. JP Morgan's derivatives take precedence over customer deposits. Fed controller wins, society loses.
I'm sure people can add more, but let's stop at 10 wins for the Fed controllers to 0 wins for the people.
You think the people who run the Federal Reserve are stupid as they rip your nation's f*ing face off and eat right in front of you?
I don't want to call that idea out as being beyond belief ignorant and stupid, because I know we all fall for our "conditioning" to one degree or another, but I do ask you to evaluate the actual data in earnest before making claims that may assuage your emotional dread of realizing Bernanke is a front man for stone cold killer, looters and society destroyers.
I assure you - Ben Bernanke isn't stupid. He's playing possum while the Fed's true controllers rip your countries f*ing face off and spit it back at you, all while snarling because they think you will never figure it out.
Figure.
It.
Out.
Then warn others.
you got it.
Bring back Bill "I hate my job" Harrison, who could not wait to give Dimon his job.
I'm proud to say I don't know who any of those people are.
Au contraire, Bruce - a surprising number of 'LifeBoats' have already taken to the 'water'. Hint: many have WingLets and are registered to PhantomCorporations in Nevada... and they're definitely not being launched for the 'passengers' sake...
To build, first you must destroy.
---Shiva
who's the dude in center square who's been eating the Bluefin Tuna?
and good that you outed that prick Kotok who some at ZH lionize.
Recapitalization, Quatntitative Easing, TWIST, and etc. When an individual does it , it is called counterfitting. The closest thing to accuracy when a government does it is hidden taxation. The problem for the powers that be right now is they are starting to steal from each other because that is all that is left. The plankton is gone the small and large fish have been eaten up. All that is left in the water are whales and giant squids. The last whale gets the harpoon.
The FED can buy as many shares of all the companies in the world that they choose to.
Anyhow I think the FED has the power to manipulate the stock markets as much as they decide. The markets have exhibited strange action at the end of last year until recently. I think their computers can handle it. But, there is no way to know what their intentions are. Whether to let the markets fall or when they will take them higher.
Experts will always give advice in their favor. That is one tactic that has created the wealth enough to classify them as experts.
"These are the faces of ABC’s experts."
Excellent Bruce...more of this needs to be done...accountability and responsibility.
I look forward to the same "expert panel" being reassembled and asked how they got it exactly backwards ;-)
I want Swonk.
I did her, she's not that great. Squeals like a pig though
The same as last time. Nobody saw it coming so how could they see it coming.
Oh, but that wouldn't be POLITE. Whens the last time polite got us anywhere good?
Need more like Mark Haines used to be like. He would laugh at someone to their face.
True.
It's the living in a fish bowl syndrome I think.
They went to the same colleges, they now go to the same restaurants, same parties, they even inter-marry...lol...where they compliment each with inanities such as "That's a great question!"
WTF!?!?
No, usually, it's a question having absolutely nothing to do with the subject at hand and is asked (I should say scripted) to take the subject off topic.
Every time I hear this overused expression "that's a great question" I get a mental picture of the professor who first posited this linguistic device to his students beating off behind a two way mirror watching them take their finals.
Prolly just me tho ;-)
things you'll never hear in the financial media...but should:
"hey, phucker. where's the five dollars you owe me."
"i think you're a jerk."
"she said what in bed?"
"no, you can't have my wife. and keep your hands off my daughter too!"
"if i ask you to make a prediction do you really think i care about the answer?"
and most importantly:
DISCLAIMER: "we are not here to talk at ALL about the important issues impacting anything. if by dint of the nature and timing of events we are forced to we apologize and will work diligently to stop that and revert back to "financial analysis using a twinkie as our model." Now have a nice day and go phuck yourself."
Milton William 'Bill' Cooper told the truth, the whole truth and nothing but the truth and was assassinated for telling the truth. You can find his pod casts @ Hour of the Time.
This will enlighten the darkest corners of the world:
William Cooper There IS a God Full Length - YouTube
Shills=Fucking Dicless Assholes!