Tedbits: 2012 Outlook, Part 1 - When Leverage Fails

tedbits's picture

The saga continues as we head into 2012.  That saga is the demise of Ponzi finance and an ASSET-backed economic model in the developed world.  We do not know whether the currency and financial system extinction event will occur this year or ten years from now.  The questions we hope to answer in this 2012 economic analysis regard only the unfolding of short to intermediate-term ups and downs in economies, financial systems and societies.  We will be covering different sectors of the 2012 economy (stocks, bonds, precious metals, commodities, real estate, etc.) over the next several editions of TedBits; this is part one -- a global-macro Austrian overview, the BIG PICTURE so to speak. Don’t miss future issues; subscriptions to TedBits are FREE at www.traderview.com/subscribe/

What we do know is that the demise of the DEVELOPED world’s currencies, financial systems and economies are set in stone, just as one’s fate is sealed when they slip below the EVENT horizon of a cosmic BLACK hole.  This time the black hole is INCOME destruction from centrally-planned economies, runaway welfare states, crony capitalism, regulation, taxation and endless MONEY printing out of thin air… a toxic cocktail of wealth destruction.

A DEPRESSION has been written into law in the United States by the Socialist-progressive, legislative supermajorities of 2008 to 2010 in the form of (1) Permanent government expansion (20-25%) via the misnamed STIMULUS Bill, Obama Care (which is no more than NATIONALIZING, further politicizing and tax goodies for sale to the highest bidder/campaign contributor) along with the health care industry, and finally Dodd Frank  (more financial regulation for sale and political allocation of credit). 

100 million dollar rules    

These bills are wrapping themselves like PYTHONS around the largest economy in the world.  And (2), SQUEEZING the life out of the economy via 80,000 pages of new regulations a year (sold to the highest bidder from K Street, aka lobbyist row and the biggest campaign contributors), poorly written and in haste by unelected bureaucrats  who have no experience in the industries and businesses they are regulating. 

Finish reading this article here.

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NewWorldOrange's picture

you’ve been hit by a

| TRUCK!!!!!! ‘|”"”;..,___.
|_…_…______===|= _|__|…, ] |
“(@ )’(@ )”"”"*|(@)(@ )*****(@)

congrats. you’re dead.

NewWorldOrange's picture


Fix It Again Timmy's picture

Governments are designed to rob and are incapable of providing solutions - to anything....................

Sequitur's picture

Horrible post.

First, OP writes, "Obama Care (which is no more than NATIONALIZING, further politicizing and tax goodies for sale to the highest bidder/campaign contributor) along with the health care industry . . . ." How can you not look to before 2008, when the single largest healthcare pork bill arose, namely, the supermassive giveaway given to big Pharma by George Bush and the GOP in 2006: Medicare Part D. This piece of shit was negotiated by Billy Tauzin, who rammed the bill through, left office, then Tauzin left to lead big Pharma (who supported Obamacare when even more pork was fed to these pigs). Even disgraced GOP ringleader Tom Delay said the GOP lied to everyone -- including the GOP -- about Medicare Part D's costs, which will be many trillions and is the signature piece of legislation bankrupting Medicare.

And to not comment on Bush's approval of an entire cast of shit characters, including "see no fraud" Alan Greenspan, TARP king Henry "Hank" Paulson, the Bush tax cuts which the GOP also rammed through while launching two unfunded wars, and massive, massive budget deficits. What a fucking joke you say nothing about these keystones.

But I'm no bag handler for the Dems. To wit, how can you also not include the single worst financial legislation in the last 50 years: Bill Clinton's signing into law the repeal of Glass-Steagall. True, the GOP pushed it, but spineless Clinton signed it in 1999 and then took major "credit" for it (Clinton recanted only after 2008 and the blowups of Lehman, Bear, and AIG). Worse, Clinton had the gaul to give the Glass-Steagall repeal signing pen to Sandy Weill, former chairman and CEO of the biggest shit bank on planet Earth: CitiGroup.

Unquestionably, Obama was dealt a horrendous deck when he took office. Yet Obama busted again and again. It all comes full circle when Obama had zero spine in dealing with the banks, and instead puts tax-avoider Timothy Geithner in Treasury. Worse, Obama's shitbag economic team relied heavily on former Citigroup scumbag henchmen Robert Rubin and Larry Summers, who proceeded to give Obama the worst advice ever, blowing multi-trillion debt holes to prop up CitiGroup and Goldman and AIG, driving the USA to the brink of default. The horrendous JOBS Act (read: legalized IPO fraud) and the mortgage settlement are but two recent exemplars of Obama's financial illiteracy.

To conclude: the original post is laughably bad, and not even close to ZeroHedge standards.

I am Jobe's picture

waffle Irons can be retirned to WMT in 2012 if used and in return get soem GMO food brouhgt to you by Monsanto. we bring great things to life thru WMT .  Christmas looks like Posums and Scraps in 2012 and beyond.

DeadFred's picture

Correction: These bills are wrapping themselves like pythons around small businesses more than large corporations. IMHO this is intentional not an unexpected consequence. Big corporations pay the lobbies and give the campaign contributions. The resulting rules put a stake through their competitors hearts.

Jim in MN's picture

Whoa, Ty finally cross pollinates at ZH!!! Awesome!

Tedbits is The Bomb and will certainly allow for even more learning and doing over here.  I also recommend folks dig up the Fingers of Instability series (as mentioned in a previous comment).  Invaluable stuff.

GCT's picture

Ted good article thanks for publishing it.  Setarcos your brutal thats for sure and correct.  I am not sure about your statement about Ford.  My thoughts on that are Ford could not start up anymore because the government and its regulating agencies would not allow for it to happen.  When using a more accurate language sir would it not be better to get the general message across and then delve into the more accurate terms as the other parts follow?  I agree it is fascism sir but when talking to sheeple like me or worse someone that is totally not getting it, isms immediately turn most people off.  I am not one of them but I have tried to explain fascism to some firends and co-workers and you get the deer in the headlight stare or they get upset with you.

I actually hate all the politically correct terms as that only is used to shut you up.  My gut tells me there is something seriously wrong going on in our country.  It started in 2008 for me and had nothing to do with the elections but finance and I was and still am determined to make wise decisions as best as I can in these times. I still believe Obama is a socialist and that is a perception on my part as is yours.  We can call it whatever we like. 

my puppy for prez's picture

no mention of the MIC in the list of evils....why?

Setarcos's picture

When will the Cold War brain-washing wear off in the US?

When will the O'Bomber - and all those he is front man for - cease being called a 'socialist/liberal/commie'?  Sheer nonsense, because he and his ilk are fascists in the Mussolini mould, minus the nationalism which Hitler warped into "National Socialism" ... as compared with the mixed-economy socialism of post-War countries like Sweden and France, which have fairly recently, increasingly embraced the predominantly Anglo-Saxon neocon version of fascism, i.e. the bundles (fasces) of state, corporate and military interests.

I am not saying that such as the Scandanavian versions of socialism worked for very long, but I am saying that it is ridiculous to call such as the O'Bomber, the Bliar, Cameroon and Sarky 'socialists', let alone 'liberals'.  And as for 'commies'!  Even the essentially fascist Soviets never claimed to be Communists.  At best they - and their Chinese, etc. counterparts - deluded themselves into believing that they were paving the way for a future communist utopia.

As for you Usans who parrot Cold War slogans!?  Please get real ... also about the stupid idea that Keynes still has some influence, because he never had a great deal of influence and the little he had was dead by the end of the 1970s ... as proven by the rise and rise of the Chicago School, exemplified when Reagan and Thatcher became heads of government.

Tedbits otherwise useful bits of information are rendered useless and divisive by meaningless resort to defunct propaganda slogans, which were always empty anyway.

And as for the "Austrian view"?  Well that's even less tried than Keynes' views were, e.g. at least some of Keynes ideas gave rise to the Marshall Plan and not repeating the same mistake of demanding reparations from Germany post WW1.  Hence the rapid recovery of the world economy, which VERY much depended on government intervention.

But that's all water under the bridge and TODAY we are faced with the terminal results of the form of fascism that first became starkly obvious - for anyone paying attention - during the 1980s.

BTW quote, "A DEPRESSION has been written into law in the United States by the Socialist-progressive, legislative supermajorities of 2008 to 2010 ..."

Nope a depression was 'written into law'(sic) by what happened during the 1980s, i.e. the beginning of the implementation of Milton Fiedman's 'views' ... broadly an attempt to revive Adam Smith, or rather create, actually, an economic world of "free enterprize" which has never existed.  Smith would be rotating in his grave if  he knew what has been done in his name via "neo-classicism", "economic rationalism", etc. via Ayn Rand, who inspired Friedman, Greenspan, Thatcher and many others, including Ron Paul as a matter of fact ... interesting bed-fellows don't you think!?  Of course one common thread is "deregulation" and that peaked during the 1980s with the repeal of the Glass-Steagal Act.  It is not a paradox that since then a plethora of lesser regulations has snowballed ... think on it, because it opened a Pandora's Box in the banking sector.

CompassionateFascist's picture

Liar. Clinton signed repeal of Glass-Steagal. What we have now is a lethal mixture of state socialism and crony capitalism, all financed by pyramiding debt and monetization of debt. Pure Keynes.

Setarcos's picture

"Liar" eh!  Strong language from someone who has never actually read Keynes, obviously.  What the hell is "Pure Keynes"?  His ideas were complex and sometimes contradictory.

Of course I knew that Clinton repeled Glass-Steagal, but if you imagine that Clinton was/is a socialist - in terms I clearly exampled - then you are beyond any attempt to reach common ground on what is wrong, for want of using sensible terminology and having sufficient knowledge.

Of course it is "state socialism" - if you must call it that, instead of fascism (which it is) albeit without the military parades and mass rallies ... but think back to the hysteria of the O'Bomber campaign and, not long after, the Tea Party rallies.

Of course it is "crony capitalism" - if you must call it that, though anything resembling the ideal theory of capitalism is dead.  A more accurate term for what we have is "financialism", e.g. almost total domination by the banks, especially the BIS, World Bank, the IMF and central banks ... the days are long gone when someone like Henry Ford could more or less start from scratch and accumulate capital, e.g. money and property, without HAVING to borrow money at compound interest.

But I am a "LIAR" eh?  No!  I am just trying to use less emotive and more accurate language.

BTW - relative to Keynes - can I assume that you know the difference between fiscal and monetary policies.  Keynes was a "fiscalist", not a "monetarist".  Thus he advocated taxing during the good times and saving the surplus to moderate bad times - a bit of "pure Keynes" for you - as compared with monetarists relying on maniplulating the economy via interest rates (collected by private banks ... "trickle up" anyone?) and cutting taxes during good times, so that there is nothing in the public purse when bad times hit, so governments borrow from banks, of course.

He never advocated deficit spending on anything like the scale prevalent since the 1980s ... which has culminated in global debts which can NEVER be paid off.  It's not exactly rocket science why Greece illustrates where we are all at basically.  Please try to understand that the banks are NOT socialist/liberal/commie enterprizes.  Hint: they and their bought politicians have a nasty habit of ruining/going to war against socialistic countries like Chile and Libya most recently ... yes Qadafi was a socialist of rhe Arab, Ba'ath variety, who delivered free education, free health care and much more from surplus oil revenues.  Oh and he wanted his own central bank and a gold-backed dinar.

These are NOT lies.  Sorry(not) that facts are inconvenient for you.

ReactionToClosedMinds's picture

this weekend being Easter & Passover ... I'll be diplomatic.   Believe what you want ... Keynes and all ... communists/bolsheviks are not what they were (tell that to Solzhynitsen ...there were no Gulags either...) , etc.

Go read J Schumpeter .. then come back and try to make your 'waste-of-time' arguments


illyia's picture

Nice to see you over here Ty Andros. I enjoyed (if that is the right word) your Fingers of Instability articles over on Financial Sense some years ago. It will be interesting to see how ZHers respond to your indepth work.

It is a rowdy crowd but a sincere one.

DoChenRollingBearing's picture

Yes!  + 1

I have been reading Ty Andros for years!  Keep 'em coming Ty and Tyler!

Korbin Dallas's picture

This little tome (http://mises.org/daily/2654) published in 2007 uses the Code of Federal Regulations (CFR) as a regulation growth indicator.  Having implemented just 1 single CFR subsection a number of years ago, I can tell you, the less the better.

In case you don't know, enacted laws regulating business end up becoming a pure and simple cost, allowing business and IP to be driven overseas bu the very "leaders" who short-sightedly put together the CFR in the first place.

Additionally, in case you didn't know, administrative law never sees the light of day where the public is concerned.  Instead it's a shadowy enterprise where there is no debate or discourse, you just pay or shut down your operation.

CompassionateFascist's picture

And I can tell you precisely who writes these fatal "laws" and "regulations": tens of thousands of Monica Lewinskys and Chandra Levys. You only hear about these apparatchicks when their nose gets caught in someone's zipper, or they're found dead in a public park.

r00t61's picture

You think interns write legislation?

How quaint.

These days, the lobbyists write the legislation, and pass it directly to the congresscritters.

LetThemEatRand's picture

That's what cracks me up about all these simple-minded commentators who blame a few years of "socialist" policies for our problems.  The industries that are regulated as complained about in this article have been writing the regulations since the 1970's.  The rich have gotten richer, while the middle class has shrunk.  Please don't throw them in the briar patch with all of those regulations!

apberusdisvet's picture

An excellent primer for the clueless to understand how we got to this point, although the clueless would never get past the first sentence.  And that my friends is the real problem.

Bringin It's picture

Really it's the first two, together. 

The saga continues as we head into 2012.  That saga is the demise of Ponzi finance and an ASSET-backed economic model in the developed world.

A one-two punch.  Great opening. 

Straying from the flock's picture

I agree.  The normalcy bias has kept us in lockstep for the bankers to guide us at their whim.  We have been led by a carrot promising us a recovery.  The carrot is starting not to work anymore.  Time for the stick.

eddiebe's picture

Thanks Ted, I like!

ebworthen's picture

The hegemony of the Kleptoligarchy marches forward.

Politics is the distraction.

To the lifeboats!

Schmuck Raker's picture

...oh, crap.

Someone sold the lifeboats!!

MrBoompi's picture

The problems started in 2008?  Who are you?  Mitt's campaign director?  OK I'll play along so you can explain how Romney and the GOP will fix everything.  I won't be holding my breath.

LowProfile's picture

Other than that though, you have to admit it was pretty good.

Sudden Debt's picture

And that was the positive side!